BILL ANALYSIS �
AB 1625
Page 1
Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1625 (Allen) - As Amended: April 9, 2012
Policy Committee: AgricultureVote:9
- 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the Transition to Organics Program and Fund to
assist farmers who are transitioning from conventional farming
practices to certified organics practices. Specifically, this
bill:
1)Creates the Transition to Organics Fund, defines it as a
non-state fund, and permits deposits into the state treasury
or in a state depository bank approved by the State Treasurer.
2)Prohibits the expenditure of money in this fund for any
purposes other than those provided by this legislation.
3)Requires the fund to consist of money from industry and
citizen sources and prohibits deposits from the General Fund.
4)Requires the fund to be administered by the Secretary of the
California Department of Food and Agriculture (CDFA) and
permits the adoption of regulation to carry out this program.
5)Provides financial assistance to transitioning farmers for a
reimbursement of up to 25% of the costs associated with
obtaining organic certification, not to exceed $250.
6)Requires CDFA to keep records of contributions and
disbursements of the fund, and make them publicly available.
FISCAL EFFECT
The Transition to Organics Fund would optimally contain
approximately $100,000 per year that would be used to provide at
AB 1625
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least 300 transitioning farmers with a $250 stipend and allow
enough money for administering the fund. Costs for CDFA
administering the fund are estimated to be $41,000 in the first
year and $16,500 on-going.
COMMENTS
1)Rationale . According to the author, transition from
conventional to organic farming creates many challenges. It
often takes several years to become certified as an organic
farmer. Organic or transitioning farmers cannot use synthetic
fertilizers and can only use approved pesticides, and such
products are often more expensive and less familiar to the
farmer. During this time the farmer must comply with organic
growing requirements but cannot sell products as organic. The
author contends that these financial challenges discourage
many farmers from converting to organic practices. The intent
of this legislation is to provide financial assistance to
farmers who are transitioning to organic farming practices.
2)Policy Question . Conceivably, this bill may encourage
conventional farmers to shift to organic production methods
and therefore benefit the organic industry as a whole.
However, considering that it typically takes three years for
farmers to transition to organic farming and typically
thousands of dollars, it is doubtful that a maximum
reimbursement of $250 will, by itself, encourage a significant
amount of farmers to transition to organic farming.
3)The California Organic Products Act of 2003 was enacted to
protect the public from false and misleading organic labeling
claims. The Act provided for enforcement, procedures, a 14-
member advisory board, prohibited materials, inspections,
penalties, certification process and organizations, fees, and
regulations.
The act requires that any farmer or grower producing organic
products register with the agricultural commissioner in the
county of principal operation prior to the first sale of the
product. In addition, the grower is required to pay a fee
based on gross sales by the registrant of the total product
sold as organic in the calendar year that precedes the date of
registration or, if no sales were made in the preceding year,
then based on the expected sales during the 12-calendar months
following the date of registration. The minimum annual fee is
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$25 for gross sales under $5,000 and the maximum annual fee is
$3,000 for gross sales over $25 million.
4)Related Legislation . In 2009, AB 1401 (Ma), a substantially
similar bill, was vetoed. In his veto message the governor
noted, "While I support the author's goal to assist
individuals converting to organic farming, I cannot support
establishing an assistance program and expanding the workload
of the California Department of Food and Agriculture when
there is no guarantee of a funding mechanism."
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081