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WATER USAGE TOPS WEST COAST ISSUES
Editor's Note: The West Coast is often one of the most overlooked geographic areas in agriculture, which is ironic as it is home to some of the most productive and diverse agriculture crops in the world. Agri Marketing worked with a few media representatives on the West Coast who are actively involved in rural and urban issues to bring to light what is on the minds of West Coast producers. The following are the media representatives that we spoke to:

Susan Allen, co-owner of Allen Media Inc. d.b.a. Northwest Ag Information Network, which services the daily news needs of farmers and ranchers throughout Idaho, Oregon, Washington and Northern California;

Roy Leidahl, associate editor of Capital Press, a weekly agriculture newspaper targeting more than 38,000 Western producers; and

Len Richardson, editor of California Farmer magazine, a monthly Farm Progress Companies publication that discusses the issues of today's California producer.

AM: What are some of the critical issues facing West Coast producers and ranchers that marketers need to be aware of?

Susan Allen
Allen: The major issues facing today's producers do not revolve around production but rather around environmental battles. Readily available to our farmers are the finest equipment, technology and a steady supply of the world's best crop input and protection products. We have all the tools necessary to produce the safest and highest-quality food in the world. Complications arise when activist groups armed with high-paid attorneys file suits over water rights, endangered species, animal waste odors, field burning, etc.

Today's farmers don't have the resources to both farm and battle well-organized activist groups. Agribusiness marketers have an opportunity to gain farmers' loyalty by becoming involved with local, regional and national fights. If you want product loyalty, show the growers that your company is actively involved in the fight to preserve land for farming. Remember, the more land that gets taken away from the growers, the smaller the market for ag supply companies.

Roy Leidahl
Leidahl: Water: It's not a new issue, but access to water is a much bigger issue in the West than in many other areas of the country. The underlying issues are major, and nature is at the center of it. Spring rains boosted California water supplies surprisingly high and helped in the Pacific Northwest, but snowpacks are less than normal, while early summer temperatures have been running abnormally high. The Endangered Species Act seems to be the base for an ever-growing list of ways to limit farmers' and ranchers' access to water. Water users need to keep finding ways to efficiently and affordably make better use of the water they have.

Trade: Producers of fruits and vegetables have been battered by imports, and the move toward additional free trade agreements promises more of the same. Producers need help with ways to add and retain value for what they grow to compete for exports and to compete in the United States against imports.

Fallout from consolidation in food distribution: Crop and livestock producers have fewer prospective buyers who have big market power. Producers need help with systems that will enable them to compete for the consolidated industry's business.

New independence: The food industry's consolidation and the need to pull more value back to the farm have driven or attracted more producers to new marketing approaches such as on-farm processing, on-farm sales, direct marketing to consumers and farmers' market sales. Producers are making new alliances, getting into alternative crops and looking for ideas. Their thought processes are changing.

Farm Bill: The legislation supports more conservation activities and pumps money into commodities. Because of the diversity in Western agriculture, the Farm Bill affects farmers and ranchers differently depending on their specific business.

GMO issues: Last fall's Oregon proposal to require labels on foods that contain genetically modified organisms failed, but proponents persist. They had targeted Oregon first with an eye on moving next into California. This is a divisive issue.

Environmentalism: Especially in Oregon, distrust seems to run deep between even moderate environmentalist groups and conventional ag groups. Related tension in some ways runs between full-time conventional producers and part-time farmers who are trying new production and marketing approaches.

Len Richardson
Richardson: There is a whole list of issues - water, rural-urban interface, land use, labor, air quality, food safety, invasive species, loss of research and extension, and the growing power of retailers who flex their power through brand ownership. The most important thing for marketers to be aware of is that these issues tend to overlap and, as such, must be managed as a system and not in isolation.

For example, the air quality issue overlaps with cropping practices, time of harvest, technology and animal waste management. This kind of overlapping changes the bottom line from just profit to farming the triple bottom line - economic feasibility, environmental safety and social acceptability.

AM: West Coast ag is in the spotlight of water usage issues between rural and urban audiences. What is happening now with those water usage issues?

Allen:
Unlike many farming regions, the Northwest is somewhat unique in that our rural communities have become the playgrounds for urbanites from Seattle and Portland. "Save the Salmon" has become the mantra for tourists who visit the region. Once again, special interest groups have done an excellent job of using metro media to present their side of the issue. Regardless of the fact that we have had record numbers of returning salmon to the Columbia and Snake Rivers, the issue of dam removal to save the salmon still gets its share of attention.

The water rights and water usage issue most debated is who really controls the water. Just like property rights, every time a federal action or court ruling comes down - the Klamath Basin water shutoff in 2001 and the most recent ruling by the U.S. Tenth Circuit Court of Appeals in the New Mexico case - many property owners, growers, agribusiness types, etc. believe it is one step closer to the federal government, and not individual right holders, controlling water use. Some have said this Tenth Circuit ruling is the equivalent to a direct threat to Western water law (first in time, first in right).

Leidahl: The battle goes on between users and in courts. In California, the Imperial Irrigation District's refusal to sign a deal to deliver water to coastal residential users drew national attention. Some Central Valley rice farmers agreed to sell water rather than raise a crop this year, but heavy April rains led to debates about how to store and move that water. California and Pacific Northwest agriculture is watching key areas, such as the Klamath Basin on the Oregon-California border, the Snake-Columbia River system, the Central Valley Project in California and the Imperial Irrigation District. But the distribution of water is also a local issue within individual valleys and irrigation districts across the West. Even players in the major arenas are watching the New Mexico battle in the choice of water for land, residents and the silvery minnow. Again, water gets tied up with Endangered Species Act issues.

Richardson: To start with, it is not just between rural and urban but also state and federal as well as institutions such as water districts, environmental organizations and regulators. While not fully recognized, water marketing and water transfers are taking place at the same time individual water rights are being defended.

A good example is the on-again-off-again deal between California and Southern California water districts to reduce California's overdependence on the drought-stricken Colorado River, which is shared by six other Western states. The cornerstone of the deal remains unchanged. Farmers in the Imperial Valley in the southeastern corner of California would sell up to 200,000 acre-feet of water per year to San Diego for up to 75 years. At first, the Metropolitan Water District (MWD) in the Los Angeles area claimed it was willing to go forward with the deal but has since balked, despite intense pressure from the Governor's office. The Governor said he would let water purchased by MWD from Northern California rice growers run into the ocean and be lost because there was no storage room. The Bush administration disagreed, and the Governor said the water could be stored in the Shasta Dam.

MWD's newest proposal addresses the concern that transferring Imperial's farm water to San Diego would endanger Salton Sea life, triggering costly environmental sanctions from which the Imperial Irrigation District wants to be protected. The MWD calls for a $6 fee on every acre-foot (about 325,000 gallons) of Colorado River used in California. Thus, about $880 million would be generated over 35 years to pay for environmental costs associated with the Salton Sea. In other words, the cost would be borne by Imperial Valley farmers. The chess game continues.

What lessons can be drawn from all of this? While farmers and others own historical water rights and should defend them, conservation and stewardship practices can solve problems and may not cost as much as lengthy lawsuits. Second, water conservation is primarily the duty of the water rights holder - water transfers or other means cannot be used to circumvent that duty. Finally, urban and environmental clout checkmates farmer minority interest almost every time, suggesting partnerships and alliances are necessary to survive. And the California constitution says the water belongs to the people, so beware of large gathering places like Los Angeles.

AM: What is the general opinion of country-of-origin-labeling (COOL) in your markets?

Allen:
Fruit and vegetable growers and several livestock commodity groups will tell you they support COOL as written in the 2002 Farm Bill. However, retailers and many livestock packing and processing groups prefer voluntary COOL labeling. Many believe the current COOL guidelines are too cost restrictive and need to be modified. Who will be asked to cover the added costs of country-of-origin labeling? The retailer? The packer? The producer? My guess is the member of the supply chain with the least amount of clout will be forced to absorb the added costs - the producer. Let's just hope that COOL will be perceived by the consumer as added value and, thus, will support a premium price that offsets increased costs.

Leidahl: Opinion is split but probably leans toward positive. It draws strong support from many crop and livestock producers who feel damaged by imports and who think Americans will buy American. But underlying that is concern about the COOL echoes if export customers react negatively. Producers who have developed export-oriented businesses worry that COOL could be bad for their exports.

Richardson: Naturally, there are vocal exceptions, but most of our growers are favorable to COOL. The reason: agriculture is global, and to compete on a global scale you accept traceability and are fully accountable. The ideas of globalization and transparency are compatible.

AM: What are some of the biggest agricultural changes coming to your area of the country that marketers need to be ready for?

Allen:
In the fruit and vegetable category, we are seeing a "Walmartization" of the supply chain. Only a handful of buyers are controlling the demand side of the free enterprise equation, thus putting individual growers at a disadvantage. The "super retailer" now dictates the quantities, quality and timing of product to market and have the clout to say "no" to any grower or group of growers that doesn't meet all of their demands. The disbanding of the Washington State Apple Commission, which represented 70 percent of apples sold in the United States, only added to the loss of grower influence on the market.

In the small grains and beef industries, there is a focus on value-added so the producer can keep more of the commodity dollar. Pacific Northwest wheat commissions, for example, are trying to map out grain sheds - production areas wherein the wheat is of similar end-use quality for particular products. The hope is to develop a competitive edge, if not get a premium, for consistent, high-quality wheat. Beef producers are using a similar tactic and turning to branded beef programs, such as Oregon Trail Beef, in hopes of selling at a premium price point.

Leidahl: Market localization: Crop and animal producers, working closely with or as part of marketing organizations, are working to add value and brand their products to keep more value and bypass the big food distribution systems.

Marketing entities: The Washington Apple Commission's loss of a First Amendment court battle is one high-profile item in a big shift for marketing systems. State officials and commodity commission leaders are struggling to defend their marketing and promotion programs. Where commissions abandon or greatly reduce their promotional efforts, individual producers and marketers or new groups take on the marketing roles.

Big and small farms: Large, conventional family farms have kept growing, and a few commercial operations have claimed big market shares. Meanwhile, small farms operated by part-timers proliferate. Those who want to earn a living must find ways to stay competitive with the most efficient, while those who farm for pleasure spend additional income to farm or ranch.

Richardson: Increased scrutiny of ag's historical rights will continue to create pressure - unstoppable pressure - on water rights, air quality and land use practices. Ag "exemptions" at all levels will be under increasing pressure and spread beyond the West. Other variables include structural change and size, farming the triple bottom line - economic feasibility, environmental safety and social acceptability - and stewardship as a strategy.

AM: Is there anything new and different you are doing to serve your listeners/readers?

Allen:
Diversified programming is opening more windows of opportunity for the network. Programming like "Vine to Wine" and "Food Forethought Commentary" has given us access to stronger, more influential radio stations in the marketplace. A foothold in the metro markets gives us a platform to speak on behalf of the region's farmers and ranchers. We feel this is important since the Pacific Northwest is a hotbed for environmental activist groups. Somebody needs to bring the farmer's story to "Paul and Paula Public."

Richardson: To serve our readers, we are focusing editorial more on issues that are common to all readers. This is because issues are common denominators for all commodities and growers - the common ground. We are also working to connect the food chain by getting input from processors, retailers and consumers regarding the same subject. AM


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