California Lettuce Growers Regulatory Compliance 1,400% Higher Per Acre Since 2006 When CA Climate Change Bill was Passed

The study wasn’t just released, but it is quite relevant today, and demonstrative of how destructive California’s excessive regulatory environment is.

Cal Poly Professors Hamilton and McCullough address the ever-increasing costs of regulation and how they are a constant concern for California growers.

“An initial study of regulatory costs in California agriculture was conducted in 2006, as means to compare California’s regulatory environment to other competing states,” they report.

However, also in 2006, the California Legislature passed Assembly Bill 32, Global Warming Solutions Act of 2006. Then-Governor Arnold Schwarzenneger signed AB 32 into law, which ordered the state to reduce carbon emissions to 1990 levels by the year 2020, imposing a host of new regulations on every imaginable business in the state.

“Industry groups in the Salinas Valley contacted Cal Poly to update the original study in 2018 as new state and federal laws imposed significantly higher regulatory burdens on growers, specifically with respect to food safety, water quality, labor wages, air quality and worker health and safety,” the authors said. “We used 2017 data as it was the most recently completed full production year.”

The original study in 2006 reported no costs for air quality regulation. By 2017, state laws required more extensive reporting under the AB 32, Global Warming Solutions Act, even for “clear air” areas such as Monterey County. As of May 2007, all agricultural diesel engine equipment, both stationary and mobile, must be registered with the MBARD (Monterey Air Board), and equipment emissions must be monitored (California Air Resources Board). In 2017, the grower reported spending $5.31 per acre on air quality compliance, the lowest of any category; most of the costs were in staff time to report equipment and emissions information as well as upgrading equipment filters.

In 2020, a new California Air Resources Board rule known as the Truck and Bus Regulation requires all heavy-duty diesel vehicles that operate in California to reduce toxic exhaust emissions. By January 2023, nearly all heavy-duty diesel trucks and buses operating in the state are required to have 2010 or newer model year engines to reduce particulate matter (PM) and nitrogen oxides (NOx) emissions. The ranch’s trucks were found to be non-compliant with the rule in 2024, and the ranch was fined $1,900. They were required to replace three trucks, which cost $60,000 each, and are expected to be in service for 10 years. Existing haul trucks had emissions filters upgraded at $25,000 each; the expected life span is six years. The lettuce grower has two staff members who each spend 40 hours annually reporting equipment and emissions information to the MBARD. The ranch’s irrigation pumps fall under the Agricultural Diesel Engine Registration, Rule 310, of the MBARD; which requires most stationary diesel-powered engines on agricultural operations to have a permit. The annual fees are $243 for the first engine and $173 for each additional engine. The total air quality compliance costs per acre in 2024 was $8.29, the lowest of all regulatory categories, but an increase of 56% over 2017 costs.

In the 2006 study, the cooperating lettuce grower reported regulatory costs totaling $109.15 per acre or 1.26% of total production costs. Lettuce production costs were $8,793 per acre. Workers’ compensation comprised over half of regulatory costs in the initial report; other compliance areas included water quality, food safety, worker education and training.

However, by 2017, the regulatory landscape had drastically changed, precipitated by a 2006 E. coli outbreak in spinach in the Salinas Valley (that occurred after the 2006 data was collected) that altered the landscape for food safety compliance. New environmental and worker wage and safety laws were also imposed in the ensuing years. The 2017 data showed that regulatory costs were $977.30 per acre, or 8.90% of total production costs. The grower’s total production costs were $10,977 per acre in 2017.

The results of the first comparison case study showed that production costs increased by 24.8% from 2006 to 2017, but the costs of regulatory compliance rose by 795%.

Increased compliance requirements in 2024 bring the grower’s total costs of regulation to $1,600.12 per acre, which is a 63.7% increase from 2017 and a 1366% increase since 2006.

• Food Safety
• Air Quality
• Water Quality
• Labor Health and Safety
• Labor Wages
• Workers’ compensation was the highest cost of regulatory compliance and had risen to $336 per acre.
• Labor wage regulations comprised another $189 per acre
• food safety compliance followed closely behind at $181 per acre
• Affordable Care Act requirements added $141 per acre
• pesticide regulatory compliance totaled over $35 per acre
• Other regulatory compliance costs totaled between $5.50 and $28 per acre

• Education and Training for Regulatory Compliance
• Air Quality Requirements
• Water Quality/Quantity Requirements
• Department of Pesticide Regulation
• Food Safety
• Workers Compensation
• Affordable Care Act
• Labor Health & Safety Requirements
• Assessments