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July 2004, Volume 10, Number 3


California, US Agriculture

The Giannini Foundation sponsored a conference on May 28, 2004 to discuss a new 12-chapter book, California Agriculture: Dimensions and Issues California has led the US in farm sales since 1950, but annual sales of $28 billion are only two percent of the state's $1.3 trillion economy (farm sales are expected to be $32 billion in 2004, still two percent of the state's $1.4 trillion GDP).

About 55 percent of the state's farm sales were commodities such as fruits and nuts, vegetables and melons, and horticultural specialties such as flowers, and the farm share of the retail dollar spent on such FVH commodities has been falling, in part because of fewer and larger processors, packers and retailers.

History. California was sparsely populated in 1850, when it became the 31st state of the US. As gold mining waned in the 1850s and 1860s, farming took center stage, and California soon became an exporter of wheat that was produced on large acreage farms in the most mechanized way possible. The completion of the transcontinental railroad in 1869 integrated the California economy into that of the US, and falling interest rates encouraged the shift to labor-intensive and irrigated fruit crops that could be dried or canned and shipped to eastern markets.

California farmers were quick learners, and took advantage of new fruit crops introduced by plant scientists such as Luther Burbank. Cotton, sugar beets and vegetables became important crops early in the 20th century, and livestock remained a third of farm sales in California, compared to half in most other states. Large-scale irrigation occurred in two waves- from 1900 to the 1920s as a result of private efforts, and in the 1950s and 1960s as a result of federal and state water projects.

California agriculture was a leader in mechanization, in part because many farmers had large acreages, capital and were well educated. Thus, wheat farmers in 19th century California soon learned that they could use large plows to turn over only a few inches of topsoil, and encouraged local inventors to develop plows that could cover far more acres in a day than in the rest of the US. Dry summers with little threat of rain allowed wheat to be harvested by combine sooner in California than in the Midwest.

Fitzgerald argues that US farms followed California's lead and became modernized in the 1920s because they adopted not only new machinery but also the financial, cultural and ideological apparatus of industrialism, and argues that factory practices served as a template for the creation across the country of industrial or corporate farms.

Large farms producing labor-intensive crops have long hired workers, and wages were a higher share of production expenses in California than elsewhere. Daily wages paid to hired workers were higher in California than elsewhere, but workers found work only seasonally; there was not the paternalism that made farmers responsible for their workers in the off season in California.

Contemporary. There is general agreement that California agriculture must increase its productivity and add value to its crops to compete in a globalized world with freer farm trade. The spread of IT has enabled farmers to differentiate their products and create unique markets, as when dried on the vine raisin grapes can be sold as raisins that never touched the ground. IT also provides far more information on each field, allowing precision farming and facilitating the tracing of a commodity from the retailer back to the field in which the crop was produced.

The spread of global food retailing chains is expected to further shrink the farm share of retail FVH spending, and to turn more farmers into contract growers. Contract farming is most advanced in poultry farming and is spreading into vegetables such as lettuce and carrots.

The University of California has been a leader in developing new plant varieties, and 90 percent of UC farm-related patent royalties are from plant varieties. However, as ag-related research moves into biotech, the so-called tragedy of the anti-commons has slowed breakthroughs. The tragedy of the commons refers to individuals acting in their own self interest to overgraze common pasture, while the tragedy of the anti-commons means that each small subpart of a larger biological process is patented, making it difficult for one person or institution to develop an entire process.

Commodities. The US exported farm commodities worth $56 billion in FY03, including $6.2 billion from California, $3.6 billion from Iowa, and $3.4 billion from Texas. The federal Market Access Program provides $200 million a year to promote the purchase of US commodities overseas; California normally receives a fifth of the MAP funds.

California has 124,000 acres of table grapes, most in Kern and Tulare counties and in the Coachella Valley. About a third of US table grapes are exported.

Broccoli is a cool-season vegetable grown almost exclusively along California's foggy coast in Monterey county; the state produced 938,000 tons in 2003, or 92 percent of US broccoli. Researchers are developing new types of broccoli that can grow in places with temperatures above the usual maximum 70 degrees, which may allow broccoli production to spread to the San Joaquin Valley.

Artisan and farmstead cheeses - handcrafted in relatively small batches by cheese makers who do their work on or near dairy farms - are increasingly in vogue, and drawing parallels to the wine industry. Like fermenting wine, cheese making is a combination of science and art, with cheese makers talking about the particular grasses consumed by grazing dairy cows and the unique microbiology and environment of their cheese-making plants. It takes 1.2 gallons of milk to make a pound of cheese. As in wine, France has been the historic yardstick by which artisan cheese is measured, and California cheeses are winning French competitions.

The US has three farms producing foie gras, a delicacy made from duck or goose liver, two in New York's Hudson Valley and one in California near Stockton. Bills pending in both states' legislatures would ban force feeding ducks and geese, which animal activists consider cruelty (workers slide a 12-inch pipe down the necks of the birds and pump a corn mixture directly into their digestive systems twice a day).

TAAF. The 2002 Trade Act included Trade Adjustment Assistance for Farmers, providing $90 million a year for five years (FY02-07) to assist producers of commodities whose prices fall below 80 percent of the average price in the preceding five years. If prices fall and USDA determines that imports contributed importantly to the declining price, growers of the commodities may receive half of the difference between the average actual price and 80 percent of the average price in the previous five years, up to a maximum $10,000 per producer per year.

An analysis of 1998-2002 price data found that three California commodities- garlic, olives, and raisins- experienced price drops large enough to qualify producers for TAAF. Garlic and onion growers applied for TAAF, but had their applications rejected by USDA, which found that garlic prices were above 80 percent of average, and that olive growers had not proved that imports caused the price decline. The USDA similarly rejected requests for TAAF from rice and orange growers, agreeing that prices had declined, but attributing the decline to rising US production, not imports.

Siebert, Jerry. Ed. 2004. California Agriculture: Dimensions and Issues. Giannini Foundation. Fitzgerald, Deborah Kay. 2003. Every farm a factory: the industrial ideal in American agriculture. Yale University Press.