BILL ANALYSIS �
AB 1625
Page 1
ASSEMBLY THIRD READING
AB 1625 (Allen)
As Amended April 9, 2012
Majority vote
AGRICULTURE 9-0 APPROPRIATIONS 12-4
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|Ayes:|Galgiani, Valadao, Bill |Ayes:|Fuentes, Blumenfield, |
| |Berryhill, Hill, Ma, | |Bradford, Charles |
| |Mendoza, Olsen, Perea, | |Calderon, Campos, Davis, |
| |Yamada | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly, Nielsen, Norby, |
| | | |Wagner |
| | | | |
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SUMMARY : Creates a fund and program, as specified, to financially
assist farmers, who have transitioned from conventional farming
practices to certified organic farming practices, with the first
year of certification costs. Specifically, this bill :
1)Cites this as the "Transition to Organic Act (Act) of 2012," and
requires it be interpreted in accordance with the National Organic
Program (NOP) and the California Organic Products Act of 2003
(COPA).
2)Provides the following definitions for purposes of this Act:
a) "Conventional farm" meaning any farm or portions of a farm
that is not certified under the rules of NOP and COPA, and has
submitted a pesticide use report in accordance with statute
prior to January 1, 2013; and,
b) "Person" means an individual, group of individuals,
corporation, association, organization, cooperative or other
entity.
3)Creates the Transition to Organics Fund (Fund) in the State
Treasury and permits moneys to be deposited in the Fund. The Fund
may be located in the State Treasury or in a state depository bank
approved by the State Treasury, and shall be appropriated by the
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Legislature.
4)Requires the Fund to consist of moneys from industry, and citizen
sources and prohibits deposits from the state General Fund.
5)Requires the Fund to be administered by the Secretary (Secretary)
of the California Department of Food and Agriculture (CDFA) and
permits the adoption of regulations to carry out this Act.
6)Requires expenditures by the Secretary from the Fund do only the
following:
a) Provide financial assistance to farmers that have
transitioned from conventional farms to certified organic
farms, for the first year of organic certification, pursuant to
the following procedures:
i) For the first year a farmer is certified to sell organic
products, on or after January 1, 2013, the Act permits them
to apply and receive up to a 25% reimbursement of the costs
to obtain organic certification, including inspection fees,
application fees and annual fees; and,
ii) Provides a maximum payment to any such transitioning
farm of $250 and a maximum payment to any one person per year
of $1,000. Reimbursement will be made on a first come, first
serve basis, contingent upon sufficient funds being available
in the Fund.
b) Provides that the Director of Finance is to annually
determine if sufficient moneys are available in the Fund to pay
the expenses incurred by the Secretary in the administration of
the Act.
7)Permits the Secretary to administer the Fund in coordination with
the procedures associated with the federal Organic Certification
Cost-Share Program.
8)Requires the Secretary to receive and accept moneys on behalf of
the Act from any combination of persons, state agencies, and
deposit said moneys to the Fund.
9)Requires persons applying for moneys, to be solely responsible for
the accuracy and truthfulness of information provided to CDFA,
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including but not limited to, a description of the qualifying
property, prior land use, and certification costs. Permits the
Secretary to levy a civil penalty, in accordance with existing
statute, upon persons who provide false information to CDFA.
10)Requires the Secretary to keep records of contributions and
disbursements of the Fund; these records are to be publicly
available, and available to the California Organic Products
Advisory Committee (Advisory Committee).
EXISTING STATE LAW established the state organic program in 1990 for
the purpose of protecting the consumers, producers, handlers,
processors and retailers by the establishment of standards under
which fresh agricultural products and foods may be labeled and sold
as "organic." It provides definitions, enforcement, program
procedures, an advisory board, inspections, penalties, a
certification process, fees, and regulations. Enforcement
activities are coordinated with the Advisory Committee, the United
States Department of Agriculture and the California County
Agricultural Commissioners. The scope of the Act was expanded in
1992 to include seed fiber, and horticultural products sold or
labeled as organic. In 2002, it was amended to conform to NOP and
renamed COPA.
Current statutes provide that the Secretary may, in lieu of
prosecution, levy a civil penalty per violation of up to $5,000, as
specified. Further, if it is found that the violation was not
intentional, the penalty shall not exceed $2,500 per violation;
statutes provide for due process.
EXISTING FEDERAL LAW provides for the establishment of regulations
of food for humans, food for pets, livestock feed and raw
agricultural products when using, on a principal display panel
(label), the word "Organic." The enabling NOP regulations were
finalized and adopted in December 2001 under the authorization of
the federal Organic Foods Product Act, which was created in 1990.
Regulations provide definitions, enforcement procedures,
registration fees for certification and procedures, requirements for
becoming a certifier, and listing of allowed and prohibited
substances that are annually updated. The federal Organic
Certification Cost-Share program provides up to 75% of the
certification cost, up to a maximum of $750.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
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the Fund would optimally contain approximately $100,000 per year
that would be used to provide at 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 : Transition from conventional to organic farming creates
many challenges; it takes at least three years to become certified
organic. 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 states that these
financial challenges discourage many farmers from converting to
organic practices. It is estimated that California has 22% of the
nation's certified organic growers.
Currently, CDFA has an agreement with NOP to administer the federal
Cost-Share program, which can provide to organic farmers, processors
and handlers who are eligible, up to 75% or a maximum of $750 of
their costs to be certified as organic per year. CDFA receives $1
million annually to operate the federal program. Last fiscal year
they sent cost-share applications to 3,276 organic registrants;
1,481 responded (45%) and 1,475 received reimbursements totaling
$925,027.68 for an average of $625 each. Six applicants did not
have operations within California and were redirected to the
appropriate state in which they were located. This bill proposes to
create a similar program to the federal cost-share program to
encourage farmers interested in transitioning to organic practices
and provide an economic incentive once they have reached
certification status.
The federal cost-share program has annual caps, but no lifetime
caps, for applicants to receive reimbursement. This subsidy can be
requested year after year as long as the funds continue to be
appropriated in the federal budget. As written, this bill will only
allow reimbursement of certification costs, up to 25%, for the first
year of certification, limiting the funding needs of the program.
Previous Legislation: AB 1401 (Ma) of 2009, vetoed by the Governor,
created the "Transition to Organics Fund" and the "Transition to
Organic Act," to assist farmers who are transitioning from
conventional farming practices to certified organic practices, and
provided specified definitions and related authority to operate the
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program. Governor Schwarzenegger's veto message stated: "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 : Jim Collin / AGRI. / (916) 319-2084
FN: 0003377