International Business Lawyer, Business Attorney, Fukuda Law Firm, San Francisco, California

California Agricultural Laws

A myriad of laws affect farm owners in California today. Agricultural law comprises several areas of traditional law. These include contract law, real property law, environmental law (state and federal), labor law, tort law, nuisance, wills and estates and tax law. Agricultural laws encompass various statutory and common laws. The following addresses important environmental issues and laws which affect the California agricultural industry.

The Environment and California Farms
Agriculture has a major effect on the environment. California's lakes and rivers have been greatly altered for purposes of transporting water to farmlands as well as to urban areas and for other purposes such as flood control, recreation, navigation and hydroelectric power generation. California wetlands have been drained in order to create productive agricultural land. At the same time, farms have established several new plant and animal species in California, thereby permanently altering the ecosystems.

Because of these dramatic environmental changes, there are tensions among various interest groups. As a result, over the past several years, many laws and regulations have been passed to control the impact of agriculture on the environment.

Environmental Laws Affecting Agriculture
There have been two primary areas of environmental law and regulation. First, there are laws controlling agricultural impact. For example, there are issues such as groundwater contamination from animal waste, worker safety, environmental contamination, food safety problems caused by pesticides,; water problems due to excessive irrigation and poor drainage; air pollution from waste burning such as rice and air pollution caused by livestock. Secondly, laws address the preservation of ecosystems and animal species. These policies attempt to protect the environment that may be damaged by agriculture.

California agriculture has witnessed rapid evolution in technology and agricultural science. At the same time, there have been many political pressures and public controversies. For instance, science has revealed the effect of agricultural elements on human health and on the environment; there have been many advances in pest control; and new pollution-detection methods have caused changes in environmental regulations. Certainly, powerful environmental groups have generated new regulations affecting the farm industry.

California farms are regulated by a many governmental agencies. These include the U.S. Department of Agriculture, the U.S. Environmental Protection Agency and the U.S. Fish and Wildlife Service and state agencies such as the California Environmental Protection Agency, California Department of Food and Agriculture, California Department of Public Health, State Air Quality Control Board, and State Water Quality Control Board; and county and municipal agencies. These agencies which control various aspects of the environment operate under a variety of laws that are inconsistent and subject to continual modification. Certainly, policy reform is essential in order to protect California agriculture.

Policing of California Agriculture
The difficulties in monitoring groundwater contamination from animal waste runoff have led to excessively strict policing of agricultural activities. For instance, broader impacts occur when a pesticide is excluded or its use restricted when regulations are passed strictly based on environmental concerns of minor residues. When animal production is limited because of local concerns over the animal waste, extensive effects are experienced.

New technologies should be developed to accurately measure specific environmental problems such as groundwater contamination rather than condemning an entire industry such as dairying.     The scientific measurement of the health risk effects and environmental side effects related to pesticide use is uncertain. There are a variety of controversies regarding environmental regulation relative to agriculture.

Current Issues in California Agriculture
The Food Quality Protection Act is broad legislation which will have significant impact on California agriculture. Although the impact agricultural chemicals on consumers is a critical factor, the high costs of pesticide bans on producers and consumers should be addressed.

Farmers and ranchers need to understand the hydrology of any wetlands on their property. The Federal Agriculture Improvement and Reform Act (FAIRA) is focused on water which includes wetlands. The Clean Water Act (CWA) includes polices controlling water pollution from a point source and applies to dredging and filling of any navigable water of the US. A permit is required before any work is initiated. A wetland that appears from groundwater has been held to be waters of the United States. Dredge and fill includes digging a ditch; a permit is required and is strictly enforced.

The impact of removing the chemical Methyl bromide (Mbr) (a broad spectrum pesticide used in the control of pest insects, nematodes, weeds, pathogens and rodents) is dependent on available alternatives. There appears to be no single alternative that can target the range of pests and diseases that Mbr is capable of controlling, although there are alternatives for specific crops and pests. The agricultural industry is injured by the change from a broad to a narrow pesticide which will generate greater expenditures to create new pest control strategies, to monitor specific field conditions, and on the pesticides. The alternatives are less efficient compared to Mbr for commercial agricultural enterprises. Endangered Species Act

Federal and state legislation relating to endangered species has generated significant regulations affecting the business environment in California. The federal Endangered Species Act (ESA) has had adverse effects on California agriculture and the state economy. There is an increasing number of animal and plant species listed as endangered or threatened under federal law or California law.

There are at least 2 legal issues related to endangered species. First, the issue of takings is a complex question. In contrast to a land condemnation for a public project, takings under the ESA are uncertain and may be treated as a cost of doing business. Property owners contend that any restriction imposed by ESA involves a taking of private property by restricting its ability to generate its highest value or cash flow and that compensation should be provided.

The Act stipulates that agencies must make "reasonable and prudent" decisions when implementing the ESA and must consider the likely economic impact of such decisions. Legal positions of agricultural claims are under review and legislative efforts are under consideration.

Secondly, it must be determined how the ESA will apply the legislation relative to individual species. Recovery plans may be administered on a species-by-species basis which could cause duplicated effort and waste of resources. Alternatively, administration could be based on each ecosystem or habitat. Each ecosystem supports various species, some of which may be natural predators to the species in question. There will be economic consequences for the property owners.

Cultivated land might not be affected unless it is located in a buffer zone which might exclude certain practices under the recovery plan. In the event of water reallocations, the reallocation will have significant economic impact. In the event of pesticide restrictions, the impact will vary according to the selectivity of the regulations.

Agricultural activity may be restricted by ESA designation in unusual ways. For example, in the 1990s the US Fish and Wildlife Service (USFWS) proposed the ban of 2 pesticides because their usage to control squirrels and jackrabbits impacted the endangered San Joaquin fox. Although the fox does not generally consume the treated crops, it is a predator that consumes the affected target species. Since these pesticides accumulate in the liver of the dead pests, the fox species could have been be poisoned through consumption of the pests.

The desire to maintain the scenic and recreational amenities of agricultural areas may result in private benefits for conservation of agricultural activities and the environment. For instance, Northern California vineyards are sources of tourist revenue as well as income from wine production. Wineries benefit directly from the large number of visitors and its region benefits from the hotels and restaurants serving the visitors. These examples of agri-tourism occur when farm activities are visually appealing to visitors. Agri-tourism activities include urban ranches, self-pick berry and apple farms and animal petting zoos.

The negative impact of dairy operations counteract the benefits of having these facilities located close to population centers. In contrast, the positive externalities associated with the recreational and environmental amenities of some farming activities are magnified when these operations are located closer to urban areas. Although Napa Valley wine may be grown 200 miles further away from San Francisco, there would be fewer people visiting wine country. In general, farmers who are closer to population centers will be able to reap greater private benefit from provision of new agri-tourism opportunities.

Farmland - Environmental & Recreational Amenities
Many regulations attempt to mitigate the negative environmental impacts of agriculture in California. However, both the government and the citizens appreciate the role that agriculture plays in our environment. Several governmental programs reward participating farmers for their conservation activities. Moreover, agriculture provides valuable recreational amenities to consumers, both indirectly and directly.

Both the U.S. Department of Agriculture, through the Farm Service Agency and the National Resource Conservation Service offer programs such as the Conservation Reserve Program (CRP), Wetland Reserve Program, Grasslands Reserve Program, and the Environmental Quality Incentives Program (EQIP) to motivate farmers to engage in conservation activities. Similarly, taxes are utilized to discourage activities that have negative impacts and the government typically subsidizes only those activities with positive environmental impacts. Activities that offer benefits for parties other than those who control the resource may be rewarded. These subsidies are awarded in order to encourage farmers to engage in conservation activities. Through subsidizing desirable practices, governments increase private benefits to the farmers and encourage conservation and environmental sensitivity.

The Conservation Reserve Program is an important program. Under the CRP, farmers are paid to retire environmentally sensitive cropland from production. Agricultural land may be eligible if it is prone to erosion, generates serious water quality problems, constitutes important wildlife habitat, or provides other significant environmental benefits. Farmers may receive additional reimbursement for conservation expenses such as planting cover crops to reduce erosion on retired land.

Although the CRP was established in the 1985 Farm Bill, its precursor started in the 1950s when Congress established similar programs in the Soil Bank Act. These programs were initiated to avoid a re-occurrence of the Dust Bowl in the 1930’s. Renewed interest in the 1980s was generated by depressed agricultural commodity prices. The CRP not only achieved environmental protection, but it also allowed for payments to distressed farmers and reduced overproduction through removal of lands from agrriculture.

The CRP has been reauthorized in every subsequent farm bill, and has been growing at a moderate pace in recent years. USDA will pay out $1.6 billion to American farmers under the CRP between October 2003 and September 2004; these payments cover over 34 million acres in all fifty states. Participation in California is fairly modest, with 383 farms receiving $4.4 million in payments for just under 143,000 acres of set-aside land in 2003-2004. In contrast, Texas farmers will receive over $142 million for conservation of over 4 million acres of land. At the same time, the average payments received by participating farms in California ($11,380) are well over the national average of $4,354 per participating farm (United States Department of Agriculture, 2003).

The EQIP program is of much greater importance to California farmers. EQIP was enacted in the 1996 Farm Bill and was re-confirmed in the 2002 Farm Bill. EQIP offers $11.6 billion in assistance over ten years. EQIP grants farmers payments for specific environmental improvements on their properties. Farmers may receive cost share assistance for a maximum of 75% of the cost of environmental projects in the priority areas selected by each state. In California, $38.6 million was allocated during 2003. Roughly half of this money was designated for special programs such as water conservation in the Klamath basin, replacement of diesel engines, and statewide surface and groundwater conservation projects. The other half is allocate to regular appropriations which are distributed on a per-county basis. In 2003, Fresno, Merced, Riverside, Stanislaus, and Tulare counties were each scheduled to receive over $1,000,000 in EQIP funds.

These green payment programs will increase in the future as increased international trade discourages governments to continue traditional agricultural price support programs. Currently, WTO regulations favor agricultural conservation programs in lieu of price supports because of the reduced impact on agricultural markets. This trend will benefit California farmers because they tend to receive less benefit from price support programs than farmers in other parts of the country.

Agricultural support programs have traditionally received strong support from both urban and rural residents. Urban residents realize that agriculture plays an important role in maintaining rural lifestyles enjoyed both by Californians and visitors. Visitors to rural areas enjoy the scenery and connection to the rural lifestyle offered by farms and ranches.

Limitation on Eminent Domain by Congress
Private property owners recently gained additional protection against eminent domain from the U.S. House of Representatives.    The House approved the Private Property Rights Protection Act of 2005. The law prohibits the federal government from using eminent domain for private economic development, and also imposes the same prohibition on states if the state receives federal economic development funds.

The property rights bill countered a recent Supreme Court decision in Kelo v. the City of New London, Connecticut. which approved the use of eminent domain to take private property and transfer it to private entities for economic development.

States that violate the Private Property Rights Protection Act will not receive federal economic development funds for two years. The legislation acknowledges the right of parties injured by violation of the legislation to sue for damages.

The Migrant & Seasonal Agricultural Worker Protection Act Coverage

The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) protects migrant and seasonal agricultural workers in their relationship with farm labor contractors, agricultural employers, agricultural associations, and migrant housing providers. Under limited conditions, certain farm labor contractors, agricultural employers, agricultural associations, and providers of migrant housing are exempt from MSPA.

Basic Provisions & Requirements
The MSPA requires farm labor contractors, agricultural employers, and agricultural associations who recruit, solicit, hire, employ, furnish, transport, or house agricultural workers and providers of migrant housing, to meet certain requirements in their relationship with migrant and seasonal agricultural workers. For example: Farm labor contractor registration

Farm labor contractors and any employee who performs farm labor contracting is required to register with the Department of Labor before recruiting, soliciting, hiring, employing, furnishing, or transporting any migrant or seasonal agricultural worker. Agricultural employers and associations (and their employees) need not register as farm labor contractors. An agricultural employer or association using the services of a farm labor contractor must verify the registration status of the farm labor contractor. This process includes determining that the contractor is properly authorized for all activities he or she will undertake.

Employment relationship
The Department of Labor may determine that an agricultural employer or association that uses the services of a farm labor contractor is a joint employer of the agricultural workers furnished by the farm labor contractor. In joint employment situations, the agricultural employer or association is equally responsible with the farm labor contractor for compliance with employment-related MSPA obligations, such as the proper payment of wages.

Disclosure
Each migrant and seasonal day-haul worker must receive a written disclosure at the time of recruitment that specifies the terms and conditions of his or her employment. When offering employment, the employer must provide such disclosure to a seasonal worker upon request. The disclosure must be written in the worker's language. The employer must also post in a conspicuous place at the job site a poster setting forth the rights and protections that MSPA affords workers. A housing provider must post or present to each worker a statement of the terms and conditions of occupancy.

Information and Recordkeeping
Each farm labor contractor, agricultural employer, or association that employs any agricultural worker must maintain payroll records for each worker showing the basis on which wages were paid, the number of piecework units earned, the number of hours worked, the total pay for each pay period, the amounts and reasons for any deductions and the net pay.

The employer must provide all workers with itemized statements and must maintain the records for three years. If a farm labor contractor is performing the payroll function, the contractor must provide a copy of the pay records to the person to whom the workers are furnished (i.e., agricultural employer or association), and that person must keep the records for three years. It is illegal for a farm labor contractor, agricultural employer, or association may knowingly to provide false or misleading information to a worker about employment or the terms and conditions of employment.

Wages, Supplies, and Working Arrangements
Each person employing agricultural workers must pay all wages owed when due. Farm labor contractors, agricultural employers, and associations are prohibited from requiring workers to purchase goods or services solely from such contractor, employer, or association, or any person acting as an agent for such a person. In addition, no farm labor contractor, agricultural employer, or association may violate the terms of the working arrangement without adequate justification.

Safety and Health of Housing
Each person who owns or controls housing provided to migrant agricultural workers must ensure that the facility complies with the federal and state safety and health standards covering that housing. Migrant housing may not be occupied until it has been inspected and certified to meet these safety and health standards. The certification of occupancy must be posted at the site.

Transportation Safety
Each vehicle used to transport migrant or seasonal agricultural workers must be properly insured and operated by a properly licensed driver. Each vehicle must meet federal and state safety standards. Employer Protections

Enforcement
The Wage and Hour Division of the Employment Standards Administration enforces MSPA. During a MSPA investigation, Wage and Hour investigators may enter and inspect premises (including vehicles and housing), review and transcribe payroll and other records, and interview employers and employees.

Employee Rights
The MSPA provides migrant agricultural workers and day-haul seasonal agricultural workers the right to receive written notice of the terms and conditions of their employment when recruited; it provides seasonal workers the right to receive such notification upon the worker's request. The MSPA also requires employers of migrants and seasonal agricultural workers to adhere to the disclosed terms and conditions of employment. Certain exemptions and exclusions apply to these provisions.     The MSPA also gives migrant and seasonal agricultural workers the right to file a complaint with the Wage and Hour Division, file a private lawsuit under the Act (or cause a complaint or lawsuit to be filed), or testify or cooperate with an investigation or lawsuit in other ways without being intimidated, threatened, restrained, coerced, blacklisted, discharged, or discriminated against in any manner.

Penalties & Sanctions
Violations of MSPA may result in civil penalties, back wage assessments, and revocations of certificates of registration. Violations may result in civil or criminal actions instituted by the Department of Labor against any person found in violation of the Act. Civil penalties up to $1,000 may be assessed for each violation. Criminal conviction for first time violators may result in one year in prison and a $1,000 fine; repeat convictions may result in up to three years in prison and $10,000 in fines. In addition, individuals whose MSPA rights have been violated may seek civil money damages in federal court.

California Law on Agricultural Trespassing
In 2004, California passed new standards regarding trespassing on farms and ranches. This law make it trespass to enter upon lands or buildings owned by any other person without the license of the owner or legal occupant, where signs forbidding trespass are displayed, and whereon cattle, pigs, sheep, or any other animal is being raised or held for the purpose of food for human consumption; or to injure, gather, or carry away any animal being housed on any of those lands, without the license of the owner or legal occupant; or to damage, destroy, or remove, or cause to be removed, damaged or destroyed, any stakes, marks, fences, or signs intended to designate the boundaries and limits of any of those lands.

Acts of animal or biological terrorism are recognized as a significant threat to California's agriculture and consumers. Law enforcement officials are equipped to protect the resources and citizens of the state from such acts.

Summary
Agricultural activities affect the environment directly through the transformation into farmlands and indirectly through a spillover of residues which may create pollution and other detrimental impacts. A great deal of legislation has been passed to control the impact of agriculture on the environment. This legislation restricts the availability of land and water for agricultural uses.     Compliance with environmental laws controlling animal waste and pollutants is expensive. Legislation aimed at pollution control can combine the use of incentives and targeted policies. These policies may reduce the cost of compliance and will improve environmental quality without excessive expense. The challenge of pest problems and environmental regulation increase agricultural costs and challenge the agricultural community to develop technologies to control pests in an environmentally friendly and cost-effective manner. Concurrently, excessive control of pesticide use, may improve environmental quality but may cause deleterious human health and nutrition problems. Pesticide regulation involves tradeoffs among costs, the environment, and human health.

The costs of agricultural operations are affected by limited access to land and water resources in connection with the Endangered Species laws. In order to reduce the cost of compliance, it is important to appreciate the survival needs of wildlife and fish. In other words, management of the agricultural industry requires ecological knowledge and sensitivity.