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April 1999, Volume 5, Number 2

California: Citrus Freeze Effects

The December 20-28, 1998 freeze caused an estimated $700 million in damage
to California crops, primarily navel oranges in the San Joaquin Valley.
Fresno, Kern, Kings, Madera, Merced, Monterey and Tulare counties were declared
state and federal disaster areas, which made some workers usually not eligible
for unemployment insurance benefits eligible for up to 26 weeks of benefits. A
December 1990 freeze caused $800 million in damages, and about 12,200 workers
lost an estimated $83 million in wages.

Navel oranges were damaged the most, with $512 million lost, followed by
$175 million in losses for Valencia oranges; $81 million in lemons; and $41
million in avocados.

As of early February, the California Employment Development Department had
received 5,981 disaster-related claims for unemployment benefits. Total
employment in the winter San Joaquin Valley citrus industry is estimated to be
12,000 to 15,000, with 60 percent in the fields and 40 percent in the packing
houses. EDD estimated that 7,286 farm workers would lose $32 million in
earnings, and that 6,600 additional packing house workers may lose their jobs.
The sharpest drop in farm employment as measured by EDD was in Tulare county,
where farm production and services employment fell from 30,000 in January 1998
to 24,500 in January 1999.

Many reports quoted the UFW's Citrus Freeze Worker Committee's estimate
that 28,500 citrus workers were left jobless by the freeze, including:
Porterville, 4,500; Orange Cove, Lindsay, and Exeter/Farmersville, 3,000 each;
Orosi, Terra Bella and Woodlake, 2,000 each; and Cutler Dinuba Strathmore,
Ivanhoe, Tonyville, and Woodville, 1,000 to 1,800 each. The UFW played a major
role in organizing appeals for federal and state aid for farm workers who lost
their jobs or were not hired due to the freeze.

Almost half of the losses were in Tulare county, the center of navel orange
production, with 43 orange-packing sheds. The Sacramento Bee profiled the city
of Lindsay on January 17, 1999, a city of 9,000 residents in which about half
of the 3,600 jobs are related to citrus. About 360 people apply for welfare
assistance in a normal month; in the first half of January, 630 applied, and
many wanted to avoid the 30-day wait for aid. Interviews with laid-off citrus
workers indicated that many had limited English and few skills to find other
jobs.

Orange Cove, a city of 7,700 with eight packing houses, had a 30 percent
unemployment rate before the freeze. Victor Lopez, who has been mayor of
Orange Cove since 1986, said in January 1999 that 49 percent of residents were
receiving public assistance and 34 percent were jobless. Orange Cove, Parlier
and Huron in Fresno County, and the Tule River Indian Reservation in Tulare
County were designated as federal enterprise cities, thus becoming eligible for
$250,000 in federal tax breaks and other assistance. Many of the facilities
built in Orange Cove are named for Mayor Lopez, including the Victor P. Lopez
Rural Development Job Training Center, built with a $1.8 million grant from the
Economic Development Administration. The city plans a shopping center and
prison to expand its economic base.

Relief. Governor Gray Davis redirected $1.5 million in unused
federal flood relief funds to permit laid-off citrus workers to be hired to
repair streets, parks, school grounds and riverbanks damaged in 1997 flooding;
later, an additional $3.5 million was made available, and the Assembly approved
another $1.8 million to hire 500 more workers in April 1999. MSFW assistance
programs hired 648 workers by April 1999; most program recipients are permitted
to earn a maximum $12,000 or work for 1,080 hours on relief funds.

As relief poured into the valley, there were fears that unauthorized
workers would be deemed ineligible for government benefits and that legal
immigrants would avoid requesting assistance so that their applications to INS
to unify families would not be denied on the grounds that the family members
they sponsor could become public charges. The INS said that it would look at
receipt of emergency food stamps after a freeze differently than continuous
receipt of welfare, but advocates failed to win an assurance that the INS would
not take such assistance into account in future immigration decisions.

In an unusual change of policy in March 1999, the governor of California
signed into law on April 12 Senate Bill 1303, a change to the UI code that will
permit unemployed citrus workers to take part-time jobs and earn up to $200 a
week and keep their jobless benefits until August 7, 1999. The average UI
benefit payment in California is $140 a week--UI benefits range from $40 to
$230 a week. Under current rules, jobless workers can earn up to $25 a week,
or 25 percent of their UI benefits, and keep their full UI benefits.

Legal farm workers displaced or not hired after December 20, 1998 because
of the freeze can apply for federal grants for temporary housing, mortgage or
rental assistance, free food programs, extended unemployment benefits, crisis
counseling and help in paying electric bills. USDA's Farm Service Agency has
$2.4 billion available to growers who lost more than 35 percent of their 1998
crop, or who had losses in any three of the five years between 1994 and
1998.

Unintended Consequences. Damage to the citrus crop was not as bad
as first feared, and the 1999-00 crop is expected to be larger than usual
because the 1998-99 freeze did not "work" the trees as hard as usual.

Picking resumed in January, but as farmers and packing houses recalled
workers to return to pick navel oranges they complained that generous aid made
some farm workers reluctant to return to their regular jobs. Several farmers,
who reported harvesting 20 to 50 percent of their usual crop, reported that
they had trouble finding harvesters. However, most did not raise piece rates,
and some workers complained that they had a harder time achieving their usual
earnings at pre-freeze piece rates of $11.50 to $12.50 a bin for picking navel
oranges, with relatively little variation for hills etc. Many packing houses
reduced benefits for workers, for example, eliminating health insurance
coverage for dependents.

In the Ventura area, the piece rate for picking navel oranges is $14 for a
standard 49,603-cubic inch bin, with adjustments of $1 to $1.50 for taller
trees, hills or other obstacles. Lemon harvesters typically receive a minimum
$18 a bin.

Many citrus packers accused their competitors of selling freeze-damaged
fruit. Retail demand clearly dropped after the freeze, limiting the higher
prices that usually accompany smaller crops; pre-freeze retail prices of $0.50
a pound doubled to $1 a pound, but have since receded. California was shipping
about one million cartons of navel oranges a week in March 1999, about half
normal levels. The smaller Valencia orange crop, which is harvested in summer,
suffered more damage, and may result in the loss of 800 to 2,800 jobs in the
summer of 1999.

California citrus growers asked the US Department of Agriculture to delay
for two months hearings on whether to permit imports of lemons, oranges and
grapefruit from Argentina. Growers argued that imports could include pests,
and that, with freeze losses, they did not want imports lowering prices for
salvageable fruit. Nonetheless, USDA seems poised to free up imports.

Not all groups presumed to have been hurt by the freeze sought aid. For
example, Hmong families were notably absent from emergency aid centers.

Economy. The National Journal on February 27, 1999 surveyed the
effects of immigration in the San Joaquin Valley, entitling its story "Inviting
Workers, Importing Poverty." Carol Whiteside of the Great Valley Center is
quoted: "The Central Valley will either end up as a contributor to the state's
economic development, or it will wind up as California's Appalachia." Roberto
Suro in his 1998 book, Strangers Among Us: The Promise and the Peril of
Latino Immigration
, wrote that "The Latino poor are here, and they are not
going to go away. Unless new avenues of upward mobility open up for Latino
immigrants and their children, America's underclass will quickly double, and
over the course of a generation, it will double again."

Agriculture in the Central Valley is growing. The number of irrigated
acres of farm land increased by one million between 1992 and 1997 despite
urbanization, including 315,000 more acres of perennial fruit trees and grape
vines.

Unemployment rates in the rural and agricultural areas of California
continue to be among the highest in the US. In February 1999, five of the six
highest unemployment rates in the US were in California, led by Visalia-Tulare,
Merced, McAllen (Texas), Yuba City, Fresno, and Salinas--all had unemployment
rates above 16 percent. Most of the economic development plans in the San
Joaquin Valley have as a major goal to reduce unemployment, or to "diversify
our economy while maintaining our agricultural base." Fresno ranked 122 of 125
metropolitan areas in a survey of personal savings and investment, reflecting
low retirement savings and high unemployment. Bakersfield, Stockton-Lodi and
Modesto were also among the bottom 10 areas.

Despite these high unemployment rates, complaints of labor shortages
persist, even for unskilled workers. Some believe that the San Joaquin Valley
labor market has evolved in such a manner that workers and employers anticipate
periodic layoffs and dependence on public (UI or welfare) and private (food
banks) support. Thus, when employers attempt "early" recalls to work, some
workers may be reluctant to return.

Del Monte Foods, the largest US processor of canned fruits and vegetables,
expanded its Hanford Contadina tomato processing plant after closing plants and
eliminating 1,000 jobs in Stockton and San Jose. In Hanford, Del Monte will
add 335 seasonal jobs that last from July through September and offer entry
wages of $7.52 an hour, i.e., 12 weeks at 40 hours a week would mean earnings
of $3,610. The Hanford plant currently employs 936 workers, with about half
working year round. Hanford's mayor said that the expansion is "exactly what
we need."

Some have said that the major governmental effort to create jobs in the San
Joaquin Valley is building prisons, even though many of the jobs created do not
go to unemployed local residents. The Corrections Corporation of America is
planning a $64 million, 1,024-bed prison in 8,000-resident Mendota to house INS
detainees, and promising 300 jobs and a $10 million annual payroll. However,
when state prisons opened in Avenal and Corcoran, only 30 and 14 percent,
respectively, of the jobs went to local residents. CCA requires new employees
to have a high-school diploma.

The California Department of Finance released new projections that suggest
that the state and the San Joaquin Valley will grow slower than expected. The
state's population is projected to be 46 million in 2020, down from a 1993
projection of 49 million, and the eight-county San Joaquin Valley is projected
to have five million residents in 2020, down from an earlier projection of six
million.

A review of the demography and economy of Fresno county concluded that "The
county has become poorer, not richer, as it expands." During the 1990s, there
was net domestic migration out of Fresno County; a net 17,600 residents left
the county between 1992 and 1997, including large numbers of young and
well-educated residents as well as southeast Asians who arrived as refugees
(Fresno county provides up to $1,500 a family for welfare recipients who leave
the county for jobs elsewhere). About 27,400 adults in Fresno county were
obtaining cash welfare payments early in 1999.

The Central California Futures Institute's forecast for 2010 concludes that
Fresno county has "irreversible high unemployment, shallow income growth and a
renewed wave of population growth." Joseph J. Penbera says that "relatively
low-wage job growth" will lead to an economic development crisis. Fresno's
median income in 1998 was $13,564, 68 percent of the state's median
income.

There were 15,130 babies born in Fresno county in 1998; 20 percent of the
county's almost 800,000 residents are under 10 and one-third are under 20. The
county's median age is 30, well under the 37 median age of California and the
US. The 78,300-student Fresno Unified School District is the fourth largest in
California.

The Great Valley Center and the American Institute of Architects have
co-sponsored a $100,000 prize for the best idea to plan for the up to 10
million residents expected in the Central Valley by 2040. The contest,
"Housing the Next 10 Million: Envisioning California's Great Central Valley,"
closes in May 1999. The 450-mile long, 42,000 square Central Valley includes
18 counties and 96 cities; the population in 1990 was about five
million.

There are about 30,000 to 40,000 Indians among the 3.2 million residents of
the San Joaquin Valley. Sikhs from the Punjab region of India reportedly own
about 20 percent of the raisin acreage and operate 80 percent of Fresno's
convenience stores and 70 percent of its Subway sandwich franchises.

The city of Dinuba in Tulare county was ordered to pay $12.5-million after
its SWAT team killed an unarmed 64-year-old farm worker while serving a search
warrant. Dinuba, with 15,000 residents, was ordered to pay almost three times
more than the $3.8 million awarded to Rodney King for the police beating he
suffered in Los Angeles Dick Kirschten, "Inviting Workers, Importing Poverty," National Journal,
February 27, 1999. Jim Wasserman and Cyndee Fontana, "As more babies, not more
taxpayers, account for a population boom, Fresno County must try to
avoid...Growing trouble," Fresno Bee, February 21, 1999. Harriet Chiang,
"Latino group wins Supreme Court ruling," San Francisco Chronicle, January 21,
1999. Jim Steinberg, "Orange Cove's Victor Lopez fights for his
freeze-stricken town with a scrappy intensity," Fresno Bee, January 18, 1999.
M.S. Enkoji, "Many jobless workers struggle," Sacramento Bee, January 17,
1999.