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January 2019, Volume 25, Number 1

California: Mechanization, Cannabis

Drones and robots may transform agriculture. Drones can take photos of plants cheaply, and algorithms can process the data and adjust fertilizers and chemicals to the needs of each plant, dramatically raising yields. Similarly, sensors can provide information on each animal cheaply, allowing farmers to more precisely tailor feed and treatment.

Data on plants and animals needs to be processed and responses suggested by algorithm. Will universities develop the sensors that collect data and publish algorithms for use by farmers, or will private industry give away sensors, collect data, and provide recommended treatments to plants and animals, turning data into a profitable service?

One major focus of robotic research is weed control. Glyphosate?is a herbicide sold by Monsanto since 1974 as Roundup. Monsanto developed corn, soybean and other seeds that allowed farmers to spray Roundup on the entire field and kill only weeds. However, glyphosate-resistent weeds have developed, efforts to develop robots that quickly distinguish between desired plants and weeds and eliminate the weeds mechanically.

The cost of robots is declining, while the cost of herbicides is rising, helping to explain the interest in robotic weeders. The Robovator can remove weeds between rows of crops and between plants in the row, especially if the plants have been planted by a precision machine.

Apples are being planted on V-shaped trellises to maximize sunlight reaching the fruit and to make it easier for pickers and machines to harvest them. Vertical trees in the Sacramento River Delta yield 60 bins of gala apples an acre, while V-shaped trees galas average 75 bins an acre. Trees are planted north-south so that the east side of the V gets sunlight in the morning and the west in the afternoon, with the entire tree getting maximum sunlight at noon.

Artificial intelligence combs through vast amounts of data to identify patterns and to make predictions, as when Amazon makes suggestions of what to buy based on past purchases. There are 500 million small farms with less than five acres world wide, and phone apps based on AI aim to allow them take pictures that can be sent for diagnosis of pests and diseases.

Higher land prices in coastal California encourage growers to plant high-value crops that are often labor intensive. Garrett Farms near Watsonville has 180 acres of blackberries, which yield $40,000 an acre in revenue, and raspberries, which yield $50,000 an acre. High-value crops are needed for land that rents for $3,000 an acre and sells for $60,000 an acre.

Blackberries and raspberries, which can produce for six years, are harvested from May through September by a peak 400 workers who are paid piece rate wages.

Cannabis. California's Prop 64 in November 2016 legalized recreational marijuana beginning January 1, 2018. An estimated 13.5 million pounds of marijuana were produced in California in 2016, including 11 million pounds or over 80 percent that is produced illegally and sold outside the state.

Most marijuana is produced outdoors on plots of one-fourth acre or less. Outdoor farms produce an average 250 to 350 pounds a year, for a total of 8.1 million pounds or 60 percent of the state's total production. The farm price of marijuana was an average $1,400 a pound or a total $11 billion in 2016. Legalization has reduced grower prices to $500 or less a pound.

California had an estimated 50,000 commercial cannabis operations in 2016; at the end of 2018, there were fewer than 2,000 licensed growers, including 1,100 licensed growers in the Emerald Triangle of Humboldt, Mendocino and Trinity counties and another 1,100 in the Central Coast. Santa Barbara county had 800 licensed growers, including some who used license stacking to combine one-acre licenses into farms with five to 10 acres.

The Bureau of Cannabis Control says that more growers are requesting temporary licenses; 2,500 were issued near the end of 2018.

Recreational marijuana has not led to the predicted $1 billion in additional state tax revenues; California is expected to receive an additional $470 million in 2018-19 from legal sales of $2.5 billion, suggesting that legal marijuana sales in 2018 may be lower than the $3 billion in sales when only medical marijuana was legal. There are many reasons for lower-than-expected sales in 2018, including high state and city fees and the requirement that retail cannabis stores obtain licenses from both the state and local governments.

Few city governments have allowed recreational marijuana shops, only 89 of the state's 482 cities at the end of 2018.

Legal marijuana shops face high taxes that add over 30 percent to prices. For example, in the city of Los Angeles, legal shops charge a 15 percent state excise tax, a 10 percent Los Angeles city tax on marijuana, and 9.5 percent sales tax. Unlicensed delivery services do not pay these taxes. California had fewer than 550 licensed cannabis retailers at the end of 2018, less than the 600 in Oregon, which legalized recreational marijuana in 2014.

Some residents who live near greenhouses that were repurposed from growing flowers to cannabis are complaining of the smell, which some call fresh skunk. In response to complaints, some greenhouses are installing odor-control systems that were designed for garbage dumps. Some cannabis growers say that their rural neighbors should be accustomed to agricultural smells.

California's regulations and taxes are likely to favor a few well-capitalized cannabis operations that can afford to hire compliance officers and achieve economies of scale in production.