Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act requires the Secretary of Food and Agriculture to convene the Scientific Advisory Panel on Environmental Farming, as prescribed, for the purpose of providing advice to the secretary on the implementation of the Healthy Soils Program and the State Water Efficiency and Enhancement Program and assistance to federal, state, and local government agencies on issues relating to the impact of agricultural practices on air, water, and wildlife habitat, as specified.

This bill would authorize the panel to consult with any relevant advisory bodies established by the department, including, but not limited to, the California Organic Products Advisory Committee.

The act requires the department, in consultation with the panel, to establish and oversee a Healthy Soils Program to seek to optimize climate benefits while supporting the economic viability of California agriculture by providing incentives, including loans, grants, research, and technical assistance, and educational materials and outreach to farmers whose management practices contribute to healthy soils and result in net long-term on-farm greenhouse gas benefits. Existing law authorizes the Healthy Soils Program to also include the funding of on-farm demonstration projects that further the goals of the program.

This bill would require the department to provide grants of up to 5 years for on-farm demonstration projects, upon appropriation by the Legislature, as provided. The bill would require the department to authorize Healthy Soils Program grant recipients to request advance payments of their remaining awards, as specified, for incentive payments made pursuant to the program.

The act establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance, as defined, to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program. Existing law requires the secretary to make available not less than 5% of the funds appropriated to the department for those programs, but not more than 20% for providing technical assistance, as specified, and for supporting annual information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified.

This bill would expand the definition of technical assistance to include, among other things, training, conservation agriculture planning, and grant writing. The bill would delete the provision establishing the Climate Smart Agriculture Technical Assistance Grant Program and would instead require the secretary to make available not less than 5%, but not more than 20%, of the funds appropriated to the department for the above-described programs, for providing technical assistance directly through a technical assistance grant program, or indirectly through a block grant program that includes funding for technical assistance. The bill would require the department to provide funds to technical assistance providers to: (1) support farmers and ranchers in the application process for grants from those programs and the implementation of funded projects; (2) provide general planning and training for climate-smart and sustainable agriculture; and (3) lease, purchase, or repair farming, ranching, and food processing equipment that can be centrally housed with the technical assistance provider and shared regionally with producers.

This bill would require the department to authorize a percentage of funding to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance, as provided, and would require the department to support information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified. The bill would require the department to allow equipment sharing, as specified, to be funded as part of the grant awards.

Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act requires the Secretary of Food and Agriculture to convene the Scientific Advisory Panel on Environmental Farming, as prescribed, for the purpose of providing advice to the secretary on the implementation of the Healthy Soils Program and the State Water Efficiency and Enhancement Program and assistance to federal, state, and local government agencies on issues relating to the impact of agricultural practices on air, water, and wildlife habitat, as specified.

This bill would authorize the panel to consult with any relevant advisory bodies established by the department, including, but not limited to, the California Organic Products Advisory Committee.

The act requires the department, in consultation with the panel, to establish and oversee a Healthy Soils Program to seek to optimize climate benefits while supporting the economic viability of California agriculture by providing incentives, including loans, grants, research, and technical assistance, and educational materials and outreach to farmers whose management practices contribute to healthy soils and result in net long-term on-farm greenhouse gas benefits. Existing law authorizes the Healthy Soils Program to also include the funding of on-farm demonstration projects that further the goals of the program.

This bill would require the department to provide grants of up to 5 years for on-farm demonstration projects, upon appropriation by the Legislature, as provided. The bill would require the department to authorize Healthy Soils Program grant recipients to request advance payments of their remaining awards, as specified, for incentive payments made pursuant to the program.

The act establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance, as defined, to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program. Existing law requires the secretary to make available not less than 5% of the funds appropriated to the department for those programs, but not more than 20% for providing technical assistance, as specified, and for supporting annual information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified.

This bill would expand the definition of technical assistance to include, among other things, training, conservation agriculture planning, and grant writing. The bill would delete the provision establishing the Climate Smart Agriculture Technical Assistance Grant Program and would instead require the secretary to make available not less than 5%, but not more than 20%, of the funds appropriated to the department for the above-described programs, for providing technical assistance directly through a technical assistance grant program, or indirectly through a block grant program that includes funding for technical assistance. The bill would require the department to provide funds to technical assistance providers to: (1) support farmers and ranchers in the application process for grants from those programs and the implementation of funded projects; (2) provide general planning and training for climate-smart and sustainable agriculture; and (3) lease, purchase, or repair farming, ranching, and food processing equipment that can be centrally housed with the technical assistance provider and shared regionally with producers.

This bill would require the department to authorize a percentage of grant funding to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance, as provided, and would require the department to support information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified. The bill would require the department to allow equipment sharing, as specified, to be funded as part of the grant awards.

Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act requires the Secretary of Food and Agriculture to convene the Scientific Advisory Panel on Environmental Farming, as prescribed, for the purpose of providing advice to the secretary on the implementation of the Healthy Soils Program and the State Water Efficiency and Enhancement Program and assistance to federal, state, and local government agencies on issues relating to the impact of agricultural practices on air, water, and wildlife habitat, as specified.

This bill would require authorize the panel to consult with any relevant advisory bodies established by the department, including, but not limited to, the California Organic Products Advisory Committee in relation to certified organic producers and the Healthy Soils Program, as specified. Committee.

The act requires the department, in consultation with the panel, to establish and oversee a Healthy Soils Program to seek to optimize climate benefits while supporting the economic viability of California agriculture by providing incentives, including loans, grants, research, and technical assistance, and educational materials and outreach to farmers whose management practices contribute to healthy soils and result in net long-term on-farm greenhouse gas benefits. Existing law authorizes the Healthy Soils Program to also include the funding of on-farm demonstration projects that further the goals of the program.

This bill would require the department to provide grants of up to 5 years for on-farm demonstration projects. projects, upon appropriation by the Legislature, as provided. The bill would require the department to establish an advance payment rate of up to 50%, authorize Healthy Soils Program grant recipients to request advance payments of their remaining awards, as specified, for incentive payments made pursuant to the program, and would authorize the department to consider regional variation in input costs when setting incentive payment rates. program.

The act establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance assistance, as defined, to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program. Existing law requires the secretary to make available not less than 5% of the funds appropriated to the department for those programs, but not more than 20% for providing technical assistance, as specified, and for supporting annual information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified.

This bill would require the department to authorize a percentage of grant funding to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance, as provided, and would require the department to support information sharing among technical assistance providers, the department, and other relevant stakeholders, as specified. The bill would require the department to allow equipment sharing, as specified, to be funded as part of the grant awards under the Climate Smart Agriculture Technical Assistance Grant Program. awards.

Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act requires the Secretary of Food and Agriculture to convene the Scientific Advisory Panel on Environmental Farming, as prescribed, for the purpose of providing advice to the secretary on the implementation of the Healthy Soils Program and the State Water Efficiency and Enhancement Program and assistance to federal, state, and local government agencies on issues relating to the impact of agricultural practices on air, water, and wildlife habitat, as specified.

This bill would require the panel to consult with the California Organic Products Advisory Committee in relation to certified organic producers and the Healthy Soils Program, as specified.

The act requires the department, in consultation with the panel, to establish and oversee a Healthy Soils Program to seek to optimize climate benefits while supporting the economic viability of California agriculture by providing incentives, including loans, grants, research, and technical assistance, and educational materials and outreach to farmers whose management practices contribute to healthy soils and result in net long-term on-farm greenhouse gas benefits. Existing law authorizes the Healthy Soils Program to also include the funding of on-farm demonstration projects that further the goals of the program.

This bill would require the department to provide grants of up to 5 years for on-farm demonstration projects. The bill would require the department to establish an advance payment rate of up to 50%, as specified, for incentive payments made pursuant to the program, and would authorize the department to consider regional variation in input costs when setting incentive payment rates.

The act establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program.

This bill would require the department to allow equipment sharing, as specified, to be funded as part of the grant awards under the Climate Smart Agriculture Technical Assistance Grant Program.

This bill would require the department, on or before January 1, 2027, to establish a common application for all of the Climate Smart Agriculture incentive programs, as provided.

GOVERNOR'S VETO

GV Bill Id:AB 2734

Author:(Connolly)

As Enrolled Ver:August 29, 2024

2/3 vote

SUMMARY

This bill makes various updates to the California Department of Food and Agriculture's (CDFA) Healthy Soils Program (HSP.)

Senate Amendments

Make technical and conforming changes.

These amendments are in alignment with the policy goal of the Assembly Committee on Agriculture.

Governor’s Veto Message

I am returning Assembly Bill 2734 without my signature. This bill would update the California Department of Food and Agriculture's (CDFA) Healthy Soils Program (HSP) by authorizing the Scientific Advisory Panel to consult with any relevant advisory bodies. The bill would also allow Healthy Soils grant recipients to request an advance on their grant for incentive payments and require CDFA to provide grants of up to five years for on-farm demonstration projects. While I support the author's goal to update the HSP to increase program accessibility for farmers, the provisions requiring CDFA to provide grants of up to five years would result in millions of dollars of General Fund cost pressures and should be considered in the annual budget process. In partnership with the Legislature this year, my Administration has enacted a balanced budget that avoids deep program cuts to vital services and protected investments in education, health care, climate, public safety, housing, and social service programs that millions of Californians rely on. It is important to remain disciplined when considering bills with significant fiscal implications that are not included in the budget, such as this measure. For this reason, I cannot sign this bill.

COMMENTS

CDFA's climate smart agriculture programs include HSP, Alternative Manure Management (AMMP), and State Water Efficiency and Enhancement (SWEEP). The objectives of HSP are to increase statewide implementation of conservation management practices that improve soil health, sequester carbon, and reduce greenhouse gases. According to information released by CDFA in January 2024, HSP has awarded more than $105 million to fund more than 1,500 projects over its lifetime. Of the $170 million allocated to HSP in the fiscal year (FY) 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $15 million and shifted $50 million from the General Fund to GGRF.

AMMP provides financial assistance for the implementation of non-digester manure management practices in California. Of the $80 million allocated to AMMP in the FY 2021-22 and 2022-23 budgets, the Governor's proposed FY 2024-25 budget shifts $24 million from the General Fund to the Greenhouse Gas Reduction Fund (GGRF).

SWEEP provides financial assistance to implement irrigation systems that reduce greenhouse gas emissions and save water on agricultural operations. Of the $160 million allocated to SWEEP in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $40 million, and the Governor's proposed FY 2024-25 budget shifts $21 million of the remaining funds from the General Fund to GGRF.

CDFA's climate smart agriculture technical assistance program provides one-on-one application and implementation assistance to farmers and ranchers applying for funding from the department's climate smart agriculture programs. Of the $39 million allocated to this program in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $22 million.

According to the Author

This bill directs CDFA to offer grants for on-farm demonstration projects lasting up to five years, requires consultation with COPAC, along with other relevant advisory bodies, to address barriers organic producers face when applying to HSP, directs CDFA to provide advance payments and implements a common application process for all climate smart agriculture grant programs.

Arguments in Support

Some farmers feel marginalized and unable to fully participate in HSP due to the program's structure and requirements. Specifically, CCOF contends that organic farmers are disincentivized from participating in HSP because HSP only funds farmers to implement new practices, which organic farmers would have implemented as a requirement of organic certification. CCOF notes that small-scale producers struggle with paperwork burdens and complicated application processes, and that farmers would benefit from more tools like the equipment-sharing program this bill is proposing, which can save small farmers thousands of dollars. CCOF notes that the upfront costs of implementing HSP practices and cost disparities across different regions force farmers to face financial challenges.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Committee on Appropriations:

1. This bill would result in a cost pressure to provide the requisite grant funding. The magnitude (and funding source) is not specified in the bill, but would minimally be in the millions of dollars.
2. CDFA indicates that it would incur annual ongoing costs of $200,000 to implement the provisions of the bill (General Fund or special fund).

VOTES

ASM AGRICULTURE: 10-0-0

YES: Soria, Alanis, Aguiar-Curry, Connolly, Irwin, Jones-Sawyer, Sanchez, Ta, Villapudua, Wood

ASM APPROPRIATIONS: 11-1-3

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Sanchez

ABS, ABST OR NV: Dixon, Jim Patterson, Ta

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas, Sanchez

SENATE FLOOR: 38-0-2

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Dahle, Grove

ASSEMBLY FLOOR: 75-0-4

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Ortega, Sanchez

UPDATED

VERSION: August 29, 2024

CONSULTANT: Nicole Willis / AGRI. / (916) 319-2084 FN: 0005114

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2734

Author:(Connolly)

As Amended Ver:June 24, 2024

Majority vote

SUMMARY

This bill makes various updates to the California Department of Food and Agriculture's (CDFA) Healthy Soils Program (HSP.)

Senate Amendments

Make technical and conforming changes.

These amendments are in alignment with the policy goal of the Assembly Committee on Agriculture.

COMMENTS

CDFA's climate smart agriculture programs include HSP, Alternative Manure Management (AMMP), and State Water Efficiency and Enhancement (SWEEP). The objectives of HSP are to increase statewide implementation of conservation management practices that improve soil health, sequester carbon, and reduce greenhouse gases. According to information released by CDFA in January 2024, HSP has awarded more than $105 million to fund more than 1,500 projects over its lifetime. Of the $170 million allocated to HSP in the fiscal year (FY) 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $15 million and shifted $50 million from the General Fund to the Greenhouse Gas Reduction Fund (GGRF).

AMMP provides financial assistance for the implementation of non-digester manure management practices in California. Of the $80 million allocated to AMMP in the FY 2021-22 and 2022-23 budgets, the Governor’s proposed FY 2024-25 budget shifts $24 million from the General Fund to the Greenhouse Gas Reduction Fund (GGRF).

SWEEP provides financial assistance to implement irrigation systems that reduce greenhouse gas emissions and save water on agricultural operations. Of the $160 million allocated to SWEEP in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $40 million, and the Governor's proposed FY 2024-25 budget shifts $21 million of the remaining funds from the General Fund to GGRF.

CDFA's climate smart agriculture technical assistance program provides one-on-one application and implementation assistance to farmers and ranchers applying for funding from the department’s climate smart agriculture programs. Of the $39 million allocated to this program in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $22 million.

According to the Author

This bill directs CDFA to offer grants for on-farm demonstration projects lasting up to five years, requires consultation with COPAC, along with other relevant advisory bodies, to address barriers organic producers face when applying to HSP, directs CDFA to provide advance payments and implements a common application process for all climate smart agriculture grant programs.

Arguments in Support

Some farmers feel marginalized and unable to fully participate in HSP due to the program's structure and requirements. Specifically, CCOF contends that organic farmers are disincentivized from participating in HSP because HSP only funds farmers to implement new practices, which organic farmers would have implemented as a requirement of organic certification. CCOF notes that small-scale producers struggle with paperwork burdens and complicated application processes, and that farmers would benefit from more tools like the equipment-sharing program this bill is proposing, which can save small farmers thousands of dollars. CCOF notes that the upfront costs of implementing HSP practices and cost disparities across different regions force farmers to face financial challenges.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Committee on Appropriations:

1. This bill would result in a cost pressure to provide the requisite grant funding. The magnitude (and funding source) is not specified in the bill, but would minimally be in the millions of dollars.
2. CDFA indicates that it would incur annual ongoing costs of $200,000 to implement the provisions of the bill (General Fund or special fund).

VOTES:

ASM AGRICULTURE: 10-0-0

YES: Soria, Alanis, Aguiar-Curry, Connolly, Irwin, Jones-Sawyer, Sanchez, Ta, Villapudua, Wood

ASM APPROPRIATIONS: 11-1-3

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Sanchez

ABS, ABST OR NV: Dixon, Jim Patterson, Ta

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas, Sanchez

SENATE FLOOR: 38-0-2

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Dahle, Grove

UPDATED

VERSION: June 24, 2024

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0004229

 THIRD READING  

Bill No: AB 2734

Author: Connolly (D), et al.

Amended: 6/24/24 in Senate

Vote: 21

SENATE AGRICULTURE COMMITTEE: 4-0, 6/18/24

AYES: Hurtado, Alvarado-Gil, Cortese, Padilla

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 72-0, 5/21/24 - See last page for vote

SUBJECT: Agriculture: Cannella Environmental Farming Act of 1995

SOURCE: California Certified Organic Farmers

DIGEST:

This bill updates the California Department of Food and Agriculture’s (CDFA) Healthy Soils Program by authorizing the Scientific Advisory Panel under CDFA to consult with any relevant advisory bodies established by the department, including, but not limited to, the California Organic Products Advisory Committee regarding the Healthy Soils Program. This bill requires CDFA to provide grants of up to 5 years for on-farm demonstration projects upon appropriation by the Legislature. This bill allows Healthy Soils grant recipients to request an advance on their grant for incentive payments. This bill allows the agriculture technical assistance grant program to, among other things, fund equipment sharing. The bill would expand the definition of “technical assistance” to include conservation agriculture planning and grant writing.

ANALYSIS:

Existing law:

1. Establishes the Cannella Environmental Farming Act of 1995 for the purposes of creating an environmental farming program to look at and support environmental laws that are based on the best scientific evidence gathered from public and private resources (Food and Agricultural Code Section 561).
2. Establishes the Office of Environmental Farming and Innovation (OFEI) for the purpose of supporting agricultural production and incentivizing practices that result in a net benefit for the environment through innovation, efficient management, and science (Food and Agricultural Code Section 566).
3. Establishes the Healthy Soils Program which stems from the California Healthy Soils Initiative, a collaboration of state agencies and departments to promote the development of healthy soils on California's farmlands and ranchlands (Food and Agricultural Code Section 569).
4. Establishes the Scientific Advisory Panel under OFEI to advise the secretary on the implementation of the Healthy Soils Program established pursuant to Section 569, and the State Water Efficiency and Enhancement Program established by the department (Food and Agricultural Code Section 569).
5. Establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program.

This bill:

1. Authorizes the Scientific Advisory Panel to consult with any relevant advisory bodies established by CDFA, including, but not limited to, the California Organic Products Advisory Committee, in relation to the Healthy Soils Program.
2. Requires CDFA to provide grants of up to 5 years for on-farm demonstration projects, upon appropriation by the Legislature. Allows CDFA to use 8% of the funds for administrative costs.
3. Requires CDFA to authorize Healthy Soils Program grant recipients to request advance payments of their remaining awards for incentive payments made pursuant to the program.
4. Expands the definition of “technical assistance” for purposes of this section, to include, among other things, training, conservation agriculture planning, grant writing, matching funds coordination, translation and interpretation, project implementation support, facilitating environmental compliance, grant management assistance, project completion verification, outcome monitoring, and case study development.
5. Requires the secretary to make available not less than 5% of the funds appropriated to CDFA for the programs, but not more than 20%, for technical assistance directly through a technical assistance grant program, or indirectly through a block grant program that includes funding for technical assistance. CDFA shall award funds to technical assistance providers for all of the following purposes:
   1. To support farmers and ranchers in the application process for grants from the programs and implementation of funded projects, prioritizing technical assistance to farms and ranches that are 500 acres or fewer. Technical assistance funding may be used to provide assistance over multiple incentive funding cycles.
   2. To provide general planning and training for climate-smart and sustainable agriculture, defined as agricultural practices that support reducing greenhouse gas emissions, sequestering carbon, conserving water and other resources, managing nutrients and pests, and supporting biodiversity.
   3. To lease, purchase, or repair farming, ranching, and food processing equipment that can be centrally housed with the technical assistance provider and shared regionally with producers.
6. Allows a percentage of the grant funding, to be determined by the secretary, to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance. This shall include staff onboarding, training, and continuing education in climate-smart and conservation agriculture practices and planning.
7. Supports information sharing among technical assistance providers, the department, and other relevant stakeholders for the continuous improvement of programmatic guidelines, application processes, and relevant climate change and agricultural research.
8. Allows equipment sharing to be funded as part of the grant awards.

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

According to the Senate Committee on Appropriations:

• This bill would result in a cost pressure to provide the requisite grant funding. The magnitude (and funding source) is not specified in the bill, but would minimally be in the millions of dollars.
• CDFA indicates that it would incur annual ongoing costs of $200,000 to implement the provisions of the bill (General Fund or special fund).

SUPPORT: (Verified 8/15/24)

California Certified Organic Farmers (CCOF) (source)

Agricultural Institute of Marin

Alchemist CDC

California Food and Farming Network

Center for Food Safety; the

Ceres Community Project

Fibershed

Fresh Approach

Marin Food Policy Council

Pesticide Action Network

Roots of Change

Sacramento Food Policy Council

Second Harvest of Silicon Valley

Sierra Harvest

Sustainable Rossmoor

The Praxis Project

Veggielution

OPPOSITION: (Verified 8/15/24)

None received

ARGUMENTS IN SUPPORT:

According to the author:

“AB 2734 proposes several amendments to the Healthy Soils Program (HSP) to ensure all farmers can access it, promoting climate-smart practices across California.”

The California Certified Organic Farmers (CCOF), sponsors of the legislation, state the bill addresses farmer concerns and improves the program by directing CDFA to offer grants for on-farm demonstration projects lasting up to five years, authorize consultation with the California Organics Advisory Committee to better align organic and climate-smart programs, authorize grant recipients to request advance payments, and expand technical assistance for farmers. CCOF writes, “These new guidelines will allow all farmers to participate in HSP and adopt conservation practices that increase carbon sequestration and reduce greenhouse gas emissions.”

ASSEMBLY FLOOR: 72-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas, Sanchez

Prepared by: Reichel Everhart / AGRI. / (916) 651-1508

8/19/24 12:35:57

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2734 (Connolly) - Agriculture: Cannella Environmental Farming Act of 1995

Bill Summary:

AB 2734 would (1) update the California Department of Food and Agriculture’s (CDFA) Healthy Soils Program (HSP) by authorizing the Scientific Advisory Panel under CDFA to consult with specified advisory bodies, (2) require CDFA to provide grants of up to five years for on-farm demonstration projects upon appropriation by the Legislature, (3) allow Healthy Soils grant recipients to request an advance on their grant for incentive payments, (4) allow the agriculture technical assistance grant program to, among other things, fund equipment sharing, and (5) expand the definition of “technical assistance” to include conservation agriculture planning and grant writing.

Fiscal Impact:

• This bill would result in a cost pressure to provide the requisite grand funding. The magnitude (and funding source) is not specified in the bill, but would minimally be in the millions of dollars.
• CDFA indicates that it would incur annual ongoing costs of $200,000 to implement the provisions of the bill (General Fund or special fund).

Background:

HSP stems from the California Healthy Soils Initiative, a collaboration of state agencies and departments to promote the development of healthy soils on the State’s farmlands and ranchlands. HSP has two components: (1) the HSP Incentives Program, and (2) the HSP Demonstration Projects. The HSP Incentives Program provides financial assistance for implementation of conservation management practices that improve soil health, sequester carbon, and reduce GHG emissions. The HSP Demonstration Projects showcase California farmers and ranchers’ implementation of HSP practices. Soil management practices that are eligible for funding include cover cropping, no-till, reduced-till, mulching, compost application, and conservation plantings.

HSP does not receive ongoing funding from the State; rather, it has historically received one-time funding from the General Fund, Greenhouse Gas Reduction Fund, and Proposition 68. CDFA data indicate that HSP has awarded more than $105 million to fund more than 1,500 projects over its lifetime. Of the $170 million allocated to HSP in 2021-22 and 2022-23, the 2023-24 budget cut $15 million and shifted $50 million from the General Fund to Greenhouse Gas Reduction Fund.

CDFA’s climate smart agriculture technical assistance program provides one-on-one application and implementation assistance to farmers and ranchers applying for funding from the department’s climate smart agriculture programs. Of the $39 million allocated to this program in 2021-22 and 2022-23, the 2023-24 budget cut $22 million.

Proposed Law:

This bill would do the following:

• Authorize the Scientific Advisory Panel to consult with any relevant advisory bodies established by CDFA, including, but not limited to, the California Organic Products Advisory Committee, in relation to HSP.
• Require CDFA to provide grants of up to five years for on-farm demonstration projects, upon appropriation by the Legislature. CDFA would be allowed to use eight percent of the funds for administrative costs.
• Require CDFA to authorize HSP grant recipients to request advance payments of their remaining awards for incentive payments made pursuant to the program.
• Expand the definition of “technical assistance” to include, among other things, training, conservation agriculture planning, grant writing, matching funds coordination, translation and interpretation, project implementation support, facilitating environmental compliance, grant management assistance, project completion verification, outcome monitoring, and case study development.
• Require CDFA to make available not less than five percent of the funds appropriated to CDFA for the programs, but not more than 20 percent, for technical assistance directly through a technical assistance grant program, or indirectly through a block grant program that includes funding for technical assistance. CDFA shall award funds to technical assistance providers for all of the following purposes:
  • To support farmers and ranchers in the application process for grants from the programs and implementation of funded projects, prioritizing technical assistance to farms and ranches that are 500 acres or fewer. Technical assistance funding may be used to provide assistance over multiple incentive funding cycles.
  • To provide general planning and training for climate-smart and sustainable agriculture, defined as agricultural practices that support reducing greenhouse gas emissions, sequestering carbon, conserving water and other resources, managing nutrients and pests, and supporting biodiversity.
  • To lease, purchase, or repair farming, ranching, and food processing equipment that can be centrally housed with the technical assistance provider and shared regionally with producers.
• Allow a percentage of the grant funding, to be determined by the Secretary, to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance. This shall include staff onboarding, training, and continuing education in climate-smart and conservation agriculture practices and planning.
• Support information sharing among technical assistance providers, the department, and other relevant stakeholders for the continuous improvement of programmatic guidelines, application processes, and relevant climate change and agricultural research.
• Allow equipment sharing to be funded as part of the grant awards.

Related Legislation:

AB 406 (Connelly) would have expanded the Healthy Soils Program (HSP) to include the funding of organic farming projects and provide grant to incentivize organic production, including transition to organic projects as specified. The bill was held under submission on the Suspense File of the Assembly Appropriations Committee.

Staff Comments:

CDFA notes that it has never had permanent baseline funding for its Office of Environmental Farming and Innovation, and making administrative funding from one-time appropriations is a challenging endeavor, especially without longer encumbrance and liquidation timelines that would extend beyond the five-year grant window specified in the bill. CDFA specifically notes the importance that liquidation deadlines be expanded to 6-7 years to accommodate both the grant term and the spin up and close out of each grant cycle, which is significantly longer than the default for CDFA’s existing HSP appropriations.

-- END --

SENATE COMMITTEE ON AGRICULTURE

Senator Melissa Hurtado, Chair

2023 - 2024 Regular

Bill No: AB 2734 Hearing Date: 6/18/24

Subject: Agriculture: Cannella Environmental Farming Act of 1995

SUMMARY

:

This bill would update the California Department of Food and Agriculture’s (CDFA) Healthy Soils Program by authorizing the Scientific Advisory Panel under CDFA to consult with any relevant advisory bodies established by the department, including, but not limited to, the California Organic Products Advisory Committee regarding the Healthy Soils Program. The bill would require CDFA to provide grants of up to 5 years for on-farm demonstration projects upon appropriation by the Legislature. The bill allows Healthy Soils grant recipients to request an advance on their grant for incentive payments. The bill would allow the agriculture technical assistance grant program to, among other things, fund equipment sharing. The bill would expand the definition of “technical assistance” to include conservation agriculture planning and grant writing.

BACKGROUND AND EXISTING LAW

:

1. Establishes the Cannella Environmental Farming Act of 1995 for the purposes of creating an environmental farming program to look at and support environmental laws that are based on the best scientific evidence gathered from public and private resources (Food and Agricultural Code Section 561).
2. Establishes the Office of Environmental Farming and Innovation (OFEI) for the purpose of supporting agricultural production and incentivizing practices that result in a net benefit for the environment through innovation, efficient management, and science (Food and Agricultural Code Section 566).
3. Establishes the Healthy Soils Program which stems from the California Healthy Soils Initiative, a collaboration of state agencies and departments to promote the development of healthy soils on California's farmlands and ranchlands (Food and Agricultural Code Section 569).
4. Establishes the Scientific Advisory Panel under OFEI to advise the secretary on the implementation of the Healthy Soils Program established pursuant to Section 569, and the State Water Efficiency and Enhancement Program established by the department (Food and Agricultural Code Section 569).
5. Establishes the Climate Smart Agriculture Technical Assistance Grant Program to provide funds to technical assistance providers to provide technical assistance to applicants of the Healthy Soils Program, the Alternative Manure Management Program, and the State Water Efficiency and Enhancement Program.

PROPOSED LAW

:

This bill:

1. Authorizes the Scientific Advisory Panel to consult with any relevant advisory bodies established by CDFA, including, but not limited to, the California Organic Products Advisory Committee, in relation to the Healthy Soils Program.
2. Requires CDFA to provide grants of up to 5 years for on-farm demonstration projects, upon appropriation by the Legislature. Allows CDFA to use 8% of the funds for administrative costs.
3. Requires CDFA to authorize Healthy Soils Program grant recipients to request advance payments of their remaining awards for incentive payments made pursuant to the program.
4. Expands the definition of “technical assistance” for purposes of this section, to include, among other things, training, conservation agriculture planning, grant writing, matching funds coordination, translation and interpretation, project implementation support, facilitating environmental compliance, grant management assistance, project completion verification, outcome monitoring, and case study development.
5. Requires the secretary to make available not less than 5% of the funds appropriated to CDFA for the programs, but not more than 20%, for technical assistance directly through a technical assistance grant program, or indirectly through a block grant program that includes funding for technical assistance. CDFA shall award funds to technical assistance providers for all of the following purposes:
   1. To support farmers and ranchers in the application process for grants from the programs and implementation of funded projects, prioritizing technical assistance to farms and ranches that are 500 acres or fewer. Technical assistance funding may be used to provide assistance over multiple incentive funding cycles.
   2. To provide general planning and training for climate-smart and sustainable agriculture, defined as agricultural practices that support reducing greenhouse gas emissions, sequestering carbon, conserving water and other resources, managing nutrients and pests, and supporting biodiversity.
   3. To lease, purchase, or repair farming, ranching, and food processing equipment that can be centrally housed with the technical assistance provider and shared regionally with producers.
6. Allows a percentage of the grant funding, to be determined by the secretary, to support training and capacity building within technical assistance provider organizations and coordination between organizations to improve assistance. This shall include staff onboarding, training, and continuing education in climate-smart and conservation agriculture practices and planning.
7. Supports information sharing among technical assistance providers, the department, and other relevant stakeholders for the continuous improvement of programmatic guidelines, application processes, and relevant climate change and agricultural research.
8. Allows equipment sharing to be funded as part of the grant awards.

ARGUMENTS IN SUPPORT:

According to the author, “AB 2734 proposes several amendments to the Healthy Soils Program (HSP) to ensure all farmers can access it, promoting climate-smart practices across California.”

The California Certified Organic Farmers (CCOF), sponsors of the legislation, state the bill addresses farmer concerns and improves the program by directing CDFA to offer grants for on-farm demonstration projects lasting up to five years; authorize consultation with the California Organics Advisory Committee to better align organic and climate-smart programs; authorize grant recipients to request advance payments, and expand technical assistance for farmers. CCOF writes, “These new guidelines will allow all farmers to participate in HSP and adopt conservation practices that increase carbon sequestration and reduce greenhouse gas emissions.”

ARGUMENTS IN OPPOSITION:

None received.

RELATED LEGISLATION

:

AB 406 (Connelly): This bill would have expanded the Healthy Soils Program (HSP) to include the funding of organic farming projects and provide grant to incentivize organic production, including transition to organic projects as specified. (held on Suspense in Senate Appropriations Committee 1/31/2024).

PRIOR ACTIONS

:

SUPPORT

:

California Certified Organic Farmers (CCOF) (Sponsor)

Agricultural Institute of Marin
Alchemist CDC
California Food and Farming Network
Center for Food Safety; the
Ceres Community Project
Fibershed
Fresh Approach
Marin Food Policy Council
Pesticide Action Network
Roots of Change
Sacramento Food Policy Council
Second Harvest of Silicon Valley
Sierra Harvest
Sustainable Rossmoor
The Praxis Project
Veggielution

OPPOSITION

:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2734

Author:(Connolly)

As Amended Ver:May 16, 2024

Majority vote

SUMMARY

This bill makes various updates to the California Department of Food and Agriculture's (CDFA) Healthy Soils Program (HSP.)

Major Provisions

1. Authorizes CDFA's Scientific Advisory Panel on Environmental Farming to consult with relevant advisory bodies, including the California Organic Products Advisory Committee (COPAC).
2. Requires CDFA, as part of HSP, to provide grants of up to five years for on-farm demonstration projects, as specified and authorizes CDFA to consider regional variation in input costs when setting incentive payment rates.
3. Requires CDFA to authorize HSP grant recipients to request an advance payment for HSP incentive payments, as specified.
4. Allows CDFA's climate smart agriculture technical assistance grant program to, among other things, fund equipment sharing.
5. Expands the definition of "technical assistance" to include, among other things, training, conservation agriculture planning, and grant writing.

COMMENTS

CDFA's climate smart agriculture programs include HSP, Alternative Manure Management (AMMP), and State Water Efficiency and Enhancement (SWEEP). The objectives of HSP are to increase statewide implementation of conservation management practices that improve soil health, sequester carbon, and reduce greenhouse gases. According to information released by CDFA in January 2024, HSP has awarded more than $105 million to fund more than 1,500 projects over its lifetime. Of the $170 million allocated to HSP in the fiscal year (FY) 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $15 million and shifted $50 million from the General Fund to GGRF.

AMMP provides financial assistance for the implementation of non-digester manure management practices in California. Of the $80 million allocated to AMMP in the FY 2021-22 and 2022-23 budgets, the Governor’s proposed FY 2024-25 budget shifts $24 million from the General Fund to the Greenhouse Gas Reduction Fund (GGRF).

SWEEP provides financial assistance to implement irrigation systems that reduce greenhouse gas emissions and save water on agricultural operations. Of the $160 million allocated to SWEEP in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $40 million, and the Governor's proposed FY 2024-25 budget shifts $21 million of the remaining funds from the General Fund to GGRF.

CDFA's climate smart agriculture technical assistance program provides one-on-one application and implementation assistance to farmers and ranchers applying for funding from the department’s climate smart agriculture programs. Of the $39 million allocated to this program in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $22 million.

According to the Author

This bill directs CDFA to offer grants for on-farm demonstration projects lasting up to five years, requires consultation with COPAC, along with other relevant advisory bodies, to address barriers organic producers face when applying to HSP, directs CDFA to provide advance payments and implements a common application process for all climate smart agriculture grant programs.

Arguments in Support

Some farmers feel marginalized and unable to fully participate in HSP due to the program's structure and requirements. Specifically, CCOF contends that organic farmers are disincentivized from participating in HSP because HSP only funds farmers to implement new practices, which organic farmers would have implemented as a requirement of organic certification. CCOF notes that small-scale producers struggle with paperwork burdens and complicated application processes, and that farmers would benefit from more tools like the equipment-sharing program this bill is proposing, which can save small farmers thousands of dollars. CCOF notes that the upfront costs of implementing HSP practices and cost disparities across different regions force farmers to face financial challenges.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, CDFA estimates ongoing annual costs of approximately $200,000 to hire one senior environmental scientist to oversee the longer terms of on-farm demonstration projects as well as any equipment sharing projects funded by CDFA grant dollars (General Fund or special fund such as the Greenhouse Gas Reduction Fund GGRF.

According to the Legislative Analyst's Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

VOTES

ASM AGRICULTURE: 10-0-0

YES: Soria, Alanis, Aguiar-Curry, Connolly, Irwin, Jones-Sawyer, Sanchez, Ta, Villapudua, Wood

ASM APPROPRIATIONS: 11-1-3

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Sanchez

ABS, ABST OR NV: Dixon, Jim Patterson, Ta

UPDATED

VERSION: May 16, 2024

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0003294

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2734

Author:(Connolly) – As Introduced Ver:February 15, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill makes various updates to the California Department of Food and Agriculture’s (CDFA) Healthy Soils Program (HSP.)

Specifically, this bill:

1. Requires CDFA’s Scientific Advisory Panel on Environmental Farming to consult with the California Organic Products Advisory Committee (COPAC) on all of the following:
   
   1. The number of certified organic producers that receive an HSP grant.
   2. The education, outreach, and technical assistance needs of certified organic producers applying for HSP grants.
   3. Advising the Air Resources Board on the funding guidelines for agencies that administer California climate investments to support certified organic producers in receiving HSP grants, including removing the requirement for certified organic producers to implement new practices to qualify for HSP grants.
      
2. Requires CDFA, as part of HSP, to provide grants of up to five years for on-farm demonstration projects, and authorizes CDFA to consider regional variation in input costs when setting incentive payment rates.
   
3. Requires CDFA to establish an advance payment rate of up to 50%, as specified, for HSP incentive payments.
   
4. Allows CDFA’s climate smart agriculture technical assistance grant program to fund equipment sharing.
   
5. Requires CDFA, on or before January 1, 2027, to establish a common application for all the climate smart agriculture incentive programs, including the Alternative Manure Management Program (AMMP), HSP, and the State Water Efficiency and Enhancement Program (SWEEP.)

FISCAL EFFECT:

CDFA’s Office of Information Technology Services estimates significant costs, potentially in the low millions of dollars, to establish a common application for all of CDFA’s climate smart agriculture incentive programs (General Fund.) In addition, CDFA estimates ongoing annual costs of approximately $200,000 to hire one senior environmental scientist to oversee the longer terms of on-farm demonstration projects as well as any equipment sharing projects funded by CDFA grant dollars (General Fund or special fund such as the Greenhouse Gas Reduction Fund (GGRF)).

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1) Purpose. According to the author:

AB 2734 seeks to update the California Department of Food and Agriculture’s (CDFA) Healthy Soils Program based on farmer input. Farmers have applied to the Healthy Soils Program for nearly a decade to implement climate-smart conservation practices on their farms. The Healthy Soils Program is critical because it is essential for reducing greenhouse gas emissions…We are asking for program changes to enhance the participation of small-scale and organic producers.

2) Background. CDFA’s climate smart agriculture programs include HSP, AMMP, and SWEEP. The objectives of HSP are to increase statewide implementation of conservation management practices that improve soil health, sequester carbon, and reduce greenhouse gases. According to information released by CDFA in January 2024, HSP has awarded more than $105 million to fund more than 1,500 projects over its lifetime. Of the $170 million allocated to HSP in the fiscal year (FY) 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $15 million and shifted $50 million from the General Fund to GGRF.

AMMP provides financial assistance for the implementation of non-digester manure management practices in California. Of the $80 million allocated to AMMP in the FY 2021-22 and 2022-23 budgets, the Governor’s proposed FY 2024-25 budget shifts $24 million from the General Fund to GGRF.

SWEEP provides financial assistance to implement irrigation systems that reduce greenhouse gas emissions and save water on agricultural operations. Of the $160 million allocated to SWEEP in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $40 million, and the Governor’s proposed FY 2024-25 budget shifts $21 million of the remaining funds from the General Fund to GGRF.

CDFA’s climate smart agriculture technical assistance program provides one-on-one application and implementation assistance to farmers and ranchers applying for funding from the department’s climate smart agriculture programs. Of the $39 million allocated to this program in the FY 2021-22 and 2022-23 budgets, the FY 2023-24 budget cut $22 million.

According to the California Certified Organic Farmers (CCOF), some farmers feel marginalized and unable to fully participate in HSP due to the program's structure and requirements. Specifically, CCOF contends that organic farmers are disincentivized from participating in HSP because HSP only funds farmers to implement new practices, which organic farmers would have implemented as a requirement of organic certification. CCOF notes that small-scale producers struggle with paperwork burdens and complicated application processes, and that farmers would benefit from more tools like the equipment-sharing program this bill is proposing, which can save small farmers thousands of dollars. CCOF notes that the upfront costs of implementing HSP practices and cost disparities across different regions force farmers to face financial challenges; therefore, the bill allows CDFA to consider regional cost variation when setting incentive payments.

To address some of the other barriers highlighted by CCOF, this bill directs CDFA to offer grants for on-farm demonstration projects lasting up to five years, requires consultation with COPAC to address barriers organic producers face when applying to HSP, directs CDFA to provide advance payments of up to 50%, and implements a common application process for all climate smart agriculture grant programs.

3) Related Legislation. AB 406 (Connolly) of the current legislative session modifies HSP to support and incentivize organic production and the implementation of multiple healthy soils practices. AB 406 remains on this committee’s suspense file.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 10, 2024

ASSEMBLY COMMITTEE ON AGRICULTURE

Esmeralda Soria, Chair

ABPCA Bill Id:AB 2734

Author:(Connolly) – As Introduced Ver:February 15, 2024

SUBJECT: Agriculture: Cannella Environmental Farming Act of 1995

SUMMARY: Requires the California Department of Food and Agriculture’s (CDFA) Scientific Advisory Panel on Environmental Farming (SAPEF) to consult with CDFA’s California Organic Products Advisory Committee (COPAC) on issues related to Certified Organic Products and the Healthy Soils Program (HSP), among other issues. Specifically, this bill:

1. Requires SAPEF to consult with COPAC on all of the following:
   
   1. The number of producers certified organic that receive an HSP grant.
   2. The education, outreach, and technical assistance needs of certified organic producers applying for HSP grants.
   3. Advising the State Air Resources Board on the funding guidelines for agencies that administer California climate investments to support certified organic producers in receiving HSP grants, including, but not limited to, removing the requirement for certified organic producers to implement new practices to qualify for HSP grants.
      
2. Requires CDFA to provide grants of up to five years for on-farm demonstration projects.
   
3. Allows CDFA to consider regional variation in input costs when setting incentive payment rates.
   
4. Requires CDFA to establish an advance payment rate of up to 50 percent, as specified, for incentive payments made pursuant to HSP.
   
5. Allows equipment sharing to be funded by the Climate Smart Agriculture Technical Assistance Grant Program.
   
   1. States that allowable equipment sharing costs include developing and expanding equipment sharing programs, including, but not limited to, the purchase and repair of tools, equipment, and infrastructure, and associated administrative, training, and outreach costs.
      
6. Requires, on or before January 1, 2027, CDFA to establish a common application for all of the Climate Smart Agriculture Incentive (CSAI) programs, including the Alternative Manure Management Program (AMMP), HSP, and the State Water Efficiency and Enhancement Program (SWEEP).
   
   1. Requires the application to have the ability to save and share data between all of the CSAI programs.

EXISTING LAW:

1. Requires CDFA to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat.
2. Requires the Secretary of CDFA to convene the SAPEF for the purpose of providing advice to the secretary on the implementation of HSP and SWEEP, as specified.
3. Requires CDFA, in consultation with the SAPEF, to establish and oversee an HSP to seek to optimize climate benefits while supporting the economic viability of California agriculture by providing incentives, including loans, grants, research, and technical assistance, as specified.
4. Authorizes the HSP to also include the funding of on-farm demonstration projects that further the goals of the program.
5. Establishes the Climate Smart Ag Grant Program to provide funds to technical assistance providers to provide technical assistance to applicants of the HSP, AMMP, and SWEEP.

FISCAL EFFECT: Unknown.

COMMENTS: SAPEF is charged with reviewing and documenting agriculture's positive impacts to the environment and will examine issues such as ecosystem services and how they relate to agriculture. So far this year SAPEF has looked at Climate Resilience Strategy for California Agriculture, Climate Smart Agriculture Technical Assistance Program Updates and Defining Regenerative Agriculture.

This bill seeks remedy some of the following issues with the HSP:

1. Input costs vary across the state but the reimbursement rate for the Healthy Soils Program incentive grants is a flat rate regardless of this regional variation. The result is that farmers in regions with higher input costs experience higher project costs than are covered by the grant program.
   
2. HSP provides reimbursement to farmers. This means that farmers must cover the upfront costs of completing the project, which can be an insurmountable barrier to small scale and socially disadvantaged producers who can farm on thinner margins and face systemic barriers to accessing capital.
   
3. Small-scale producers struggle with paperwork burdens and complicated application processes.
   
4. Organic farmers feel disincentivized from participating in HSP because it only funds farmers to implement new practices, which organic farmers already would have implemented as a requirement of organic certification.
   
5. Equipment sharing as part of HSP grant awards to reduce costs for small and underserved farmers. Small and underserved farmers find it difficult to purchase equipment after purchasing the land and the costs associated with being a farmer. Equipment sharing can help reduce and control the costs of farming.
   

According to the author, this bill will address many issues listed and will have a positive impact on small, underserved, and marginalized farmers because the bill is opening more opportunities. This bill hopes to change the HSP grant program to specifically address the following issues that disproportionately impact small scale, underserved, and marginalized farmers:

1. Increasing the advance payment rate to 50% so farmers do not need to rely on large loans and capital to apply for the incentive program. Small-scale, underserved, and marginalized producers often work on thinner margins with a reduced capacity to cover upfront costs.
   
2. Allowing for regional variation in reimbursement rates to ensure small-scale producers across the state have access to the Healthy Soils Program incentive grants even if they are located in areas with higher costs of production.
   
3. Creating a common application is particularly important for small scale producers. Unlike large scale producers that can hire consultants or employees to file paperwork, small-scale farmers often fill out paperwork themselves, which takes up valuable time during an already-busy day. Creating a common application for Climate Smart Agriculture grant programs means small scale producers only need to fill out paperwork a single time to then be eligible for multiple grant opportunities.
   
4. Equipment sharing provides direct assistance to small, underserved, and marginalized farmers because it saves them money by not having to outright purchase equipment. Farming equipment can cost thousands of dollars, which can be difficult for small, underserved, and marginalized farmers to afford, especially when starting a new farm.
   
5. Small and underserved farmers need technical assistance, and this bill bolsters technical assistance by providing grants for up to five years for on-farm demonstration projects. Demonstration grants directly impact small, underserved, and marginalized farmers because they provide the knowledge required to be successful in farming. Farmer-to-farmer networking in the demonstration projects has allowed shared learning across the farming community. Normally, small, underserved, and marginalized farmers would not have access to the information.

REGISTERED SUPPORT / OPPOSITION:

Support

Agricultural Institute of Marin

Agriculture and Land-based Training Association

California Certified Organic Farmers (CCOF)

California Climate & Agricultural Network (CALCAN)

California Food and Farming Network

Cardoza & Cardoza Farming Co.

Center for Food Safety; the

Ceres Community Project

Cleanearth4kids.org

Health Care without Harm

Pesticide Action Network

Roots of Change

Sustainable Agriculture Education

Sustainable Rossmoor

Wise Goat Organics

Opposition

None on file.

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084