BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 599
          Author:   Evans (D)
          Amended:  4/10/13
          Vote:     21


           SENATE AGRICULTURE COMMITTEE  :  5-0, 4/16/13
          AYES:  Galgiani, Cannella, Berryhill, Lieu, Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 4/29/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg


           SUBJECT  :    Direct marketing:  certified farmers' markets

           SOURCE  :     Author


           DIGEST  :    This bill extends the sunset date to January 1, 2018  
          for the collection of certified farmers' market (CFM) operator  
          fees and enforcement provisions of direct marketing.

           ANALYSIS  :    

          Existing Law:

          1.Requires that every operator of a CFM remit to the Department  
            of Food and Agriculture (CDFA) a "stall fee" of not greater  
            than $0.60 to be collected from each certified producer per  
            marketing day.  Sunsets these provisions on January 1, 2014. 

          2.Establishes the federal Farmer-to-Consumer Direct Marketing  
            Act (Direct Marketing Act) of 1976 to promote the development  
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            and expansion of direct marketing of agricultural commodities  
            from farmers to consumers.

          3.Establishes the Fruit, Nut, and Vegetable Standards Law, under  
            CDFA, to enact regulations exempting certified farmers'  
            markets from certain packing, sizing, and labeling  
            requirements. 

          4.Requires farmers to be certified and annually inspected by  
            their local county agricultural commissioner (commissioner) to  
            verify that all products are grown on the farmer's property. 

          This bill extends the repeal date for the collection of CFM  
          operator fees, and the enforcement article of direct marketing,  
          from January 1, 2014 to January 1, 2018.

           Background
           
          The CFM program enables farmers to sell their produce directly  
          to consumers under the Direct Marketing Act.  Sellers are  
          permitted to market only produce that they grow.  This alternate  
          method of marketing for farmers without the required labeling,  
          packing, or size requirements has grown tremendously throughout  
          California.  Today there are approximately 700 farmers' markets  
          and 2,200 certified producers participating in California  
          farmers' markets, roughly half of which are year-round.  The  
          majority of the seasonal markets operate from April to October  
          of each year.

          Originally, the CFM program was funded from the General Fund.   
          However, in the early 1990's, General Fund support was  
          eliminated.  Following a period of insufficient funding through  
          a certification charge for participating farmers, the  
          Legislature authorized an operator's fee in 1999.  CDFA collects  
          the fee from the CFM operator based on a $.60 per stall times  
          the number of market events in which a producer participates.   
          If an operator fails to pay the fee, an interest charge on the  
          unpaid balance is assessed.

          The Secretary of CDFA and commissioner are authorized to levy  
          civil penalties against certified farmers' markets that violate  
          the Direct Marketing Act.

          Although data is not readily available in regard to the average  

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          sales per certified producer at a CFM, CDFA estimates that the  
          average producer earns approximately $350 to $700 per market  
          instance, which translates to approximately $40,250 to $80,500  
          in annual gross sales.  Certified producers currently remit the  
          equivalent of approximately .09% to .17% of their annual gross  
          sales to CDFA.  


           Related Legislation
           
          SB 513 (Cannella, Chapter 337, Statutes of 2011), extends from  
          January 1, 2012 to January 1, 2014 the collection of certified  
          farmers' market fees and related penalty and enforcement  
          provisions.

          AB 2676 (Agriculture, Chapter 440, Statutes of 2006), extended  
          from January 1, 2007 to January 1, 2012 the collection of  
          certified farmers' market fees and related penalty and  
          enforcement provisions.

          AB 1726 (Agriculture, Chapter 444, Statutes of 2004), extended  
          from January 1, 2005 to January 1, 2007, the collection of  
          certified farmers' market fees and related penalty and  
          enforcement provisions; imposed a late penalty charge on  
          operators who fail to pay the required fee.

          AB 593 (Strom-Martin, Chapter 833, Statutes of 1999), codifies  
          regulations exempting direct marketers from specified packing  
          and labeling standards, amends fee structures, and authorizes  
          farmers' markets to establish rules and procedures.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee by extending  
          the current sunset, this measure would generate about $221,000  
          annually (special funds), paid to the CDFA.  The funding  
          supports approximately one position at CDFA that provides  
          coordination and oversight with county agricultural  
          commissioners.  County Agricultural Commissioners  
          (commissioners) certify markets and producers pursuant to local  
          ordinances.

           SUPPORT  :   (Verified  4/30/13)

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          Community Alliance with Family Farmers

           ARGUMENTS IN SUPPORT  :    According to the author, "Certified  
          farmers' markets increase consumer's access to fresh local  
          produce and specialty products.  The program, in existence since  
          1977, is scheduled to sunset on January 1, 2014."


          JL:ej  4/30/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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