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 also requires the department to establish the Healthy Soils Program and a technical assistance grant program, as specified.

Existing law, the Farmer Equity Act of 2017, requires the department to ensure the inclusion of socially disadvantaged farmers and ranchers, as defined, in the development, adoption, implementation, and enforcement of food and agriculture laws, regulations, and policies and programs, as specified.

This bill would require the department, upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program as part of the Farmer Equity Act of 2017 to provide financial and technical assistance to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and, if funding is available, for limited resource farmers and ranchers or eligible entities that serve socially disadvantaged or limited resource farmers and ranchers, as specified. The bill would specify the entities eligible for financial assistance under the program and would require that applications for financial assistance to develop and expand equipment sharing programs include certain information. The bill would repeal these provisions on January 1, 2029.

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 also requires the department to establish the Healthy Soils Program and a technical assistance grant program, as specified. Existing law continuously appropriates the moneys deposited into the Climate Smart Agriculture Account to the department for purposes of the Cannella Environmental Farming Act of 1995.

This bill would require the department, upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program as part of the Cannella Environmental Farming Act of 1995 Farmer Equity Act of 2017 to provide grants financial and technical assistance to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and, if funding is available, for limited resource farmers and ranchers or eligible entities that serve socially disadvantaged or limited resource farmers and ranchers, as specified. The bill would specify the entities eligible to receive grants for financial assistance under the program and would require an applicant for a grant to provide the department with that applications for financial assistance to develop and expand equipment sharing programs include certain information, including a description of the farm equipment lending program. information. The bill would repeal these provisions on January 1, 2029.

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 also requires the department to establish the Healthy Soils Program and a technical assistance grant program, as specified. Existing law continuously appropriates the moneys deposited into the Climate Smart Agriculture Account to the department for purposes of the Cannella Environmental Farming Act of 1995.

This bill would require the department, upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program as part of the Cannella Environmental Farming Act of 1995 to provide grants and technical assistance to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and, if funding is available, for limited resource farmers and ranchers, ranchers or eligible entities that serve socially disadvantaged or limited resource farmers and ranchers, as specified. The bill would specify the entities eligible to receive grants under the program and would require an applicant for a grant to provide the department with certain information, including a description of the farm equipment lending program. The bill would repeal these provisions on January 1, 2029.

This bill would require the department, upon appropriation by the Legislature, Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program. The bill would require the department, in administering the program, Program as part of the Cannella Environmental Farming Act of 1995 to provide grants and technical assistance and grants in order to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and, if funding is available, for limited resource farmers and ranchers. ranchers, as specified. The bill would specify the entities eligible to receive grants under the program and would require an applicant for a grant to provide the department with certain information, including a description of the farm equipment lending program. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Department of Conservation administers various programs relating to agriculture agriculture, including the California Farmland Conservancy Program. Existing law authorizes the program to offer financial assistance, including grants or contracts, for projects and activities on agricultural lands that support agricultural conservation and sustainable land management, including, among other projects and activities, including for the acquisition of agricultural conservation easements or fee title to protect the lands agricultural use or capacity, and capacity and for technical assistance to develop projects, prepare applications, and implement projects.

This bill would establish require the department, upon appropriation by the Legislature, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Program in the department. Pilot Program. The bill would require the department, in administering the program, to provide technical assistance and grants in order to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and and, if funding is available, for limited resource farmers and ranchers. The bill would specify the entities eligible to receive grants under the program and would require an applicant for a grant to provide the department with certain information information, including a description of the farm equipment lending program. The bill would require the department to prioritize grants to eligible entities that primarily serve specified farmers and ranchers. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Department of Conservation administers various programs relating to agriculture including the California Farmland Conservancy Program in the Department of Conservation, and Program. Existing law authorizes the program to offer financial assistance, including grants or contracts, for projects and activities on agricultural lands that support agricultural conservation and sustainable land management, including, among other projects and activities, the acquisition of agricultural conservation easements or fee title to protect the lands agricultural use or capacity, and technical assistance to develop projects, prepare applications, and implement projects. Existing law creates the California Farmland Conservancy Program Fund and continuously appropriates moneys in the fund from federal grants and gifts and donations for purposes of the California Farmland Conservancy Program.

This bill would authorize the California Farmland Conservancy Program to additionally offer financial assistance for regional farm tool lending programs. By expanding the purposes for which continuously appropriated moneys may be used, the bill would make an appropriation. establish the Regional Farmer Equipment and Cooperative Resources Assistance Program in the department. The bill would require the department, in administering the program, to provide technical assistance and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers. The bill would specify the entities eligible to receive grants under the program and would require an applicant for a grant to provide the department with certain information including a description of the farm equipment lending program. The bill would require the department to prioritize grants to eligible entities that primarily serve specified farmers and ranchers.

Existing law establishes the California Farmland Conservancy Program in the Department of Conservation, and authorizes the program to offer financial assistance, including grants or contracts, for projects and activities on agricultural lands that support agricultural conservation and sustainable land management, including, among other projects and activities, the acquisition of agricultural conservation easements or fee title to protect the lands agricultural use or capacity, and technical assistance to develop projects, prepare applications, and implement projects. Existing law creates the California Farmland Conservancy Program Fund and continuously appropriates moneys in the fund from federal grants and gifts and donations for purposes of the California Farmland Conservancy Program.

This bill would authorize the California Farmland Conservancy Program to additionally offer financial assistance for regional farm tool lending programs. By expanding the purposes for which continuously appropriated moneys may be used, the bill would make an appropriation.

GOVERNOR'S VETO

GV Bill Id:AB 552

Author:(Bennett)

As Enrolled Ver:September 18, 2023

2/3 vote

SUMMARY

This bill require the California Department of Food and Agriculture (CDFA), upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program (RFECRA Program), as specified.

Senate Amendments

1. Make CDFA the administrator of the RFECRA Program instead of the Department of Conservation.
2. Changes the program funding from grants to financial assistance.
3. Clarifies that RFECRA entities have relevant cooperative development expertise and be able to provide meaningful benefits to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
4. Makes technical and clarifying changes.

Governor's Veto Message

To the Members of the California State Assembly I am returning Assembly Bill 552 without my signature. This bill directs the California Department of Food and Agriculture, upon appropriation, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program and provide resource-limited farmers and ranchers with financial and technical assistance to share equipment. While I support the author's goal to assist small-scale farmers and ranchers, this bill would create a new, unfunded grant program that should be considered as a part of the annual budget process. In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing. With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure

COMMENTS

After the purchase of land, farm equipment is the largest capital investment for small farmers. Access to tools and equipment can be a limiting factor on both new and established farms. Equipment costs can vary widely based on the specific kind of farm equipment. Some cost examples reportedly include the following: 1) No-till drill: up to $22,000, 2) Compost spreader: up to $30,000, 3) Wood chipper: up to $50,000, 4) Packing machine: up to $30,000, and 5) Cold storage: in excess of $100,000. Available data suggest that nearly 75% of farmers in the State operate on less than $100,000 in gross sales, making high-value equipment difficult to purchase.

Equipment sharing programs allow farmers to borrow or lease high-value equipment. Studies have noted the benefits of equipment sharing programs for agriculture. Lowering the costs to acquire, use, and maintain equipment through equipment and tool sharing programs can improve farm profitability and viability. In addition, these programs also can increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers.

According to the Author

Equipment sharing programs allow farmers to borrow or lease high-value equipment from regional agricultural centers such as fairgrounds, universities, cooperative extension offices, farmer cooperatives, and resource conservation districts (RCD). These programs aim to alleviate the financial burden for farmers, increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers. There is evidence of successful state-government-run equipment sharing programs in states like the Southern Maryland Agricultural Development Commission equipment sharing and rental program and several of New Hampshire's County Conservation Districts have equipment rental programs to allow farmers to borrow specialized equipment at a low cost for soil health and nutrient management practices.

Arguments in Support

This bill will support small farm equipment lending programs across the state by funding both existing and new programs to purchase equipment, infrastructure, maintenance, and training, as well as some personnel costs. Furthermore, this program would support essential training for farmers on new and innovative small-farm equipment, equipment maintenance, as well as cooperative development on how to participate and design farmer cooperatives.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee, this bill would result in a cost pressure to provide funding and administrative support for the Pilot Program. The magnitude is unknown, but likely in the millions of dollars (General Fund, special funds and/or bond funds). The bill currently does not indicate a funding source nor amount. Consequently, CDFA is unable to determine its resulting workload. CDFA notes that, generally, the resources required to administer the Pilot Program would be commensurate to its size and duration. However, CDFA indicates that it would require, at a minimum, $400,000 per year over the life the Program.

VOTES

ASM AGRICULTURE: 8-0-3

YES: Mathis, Aguiar-Curry, Alanis, Connolly, Irwin, Soria, Villapudua, Wood

ABS, ABST OR NV: Flora, Jones-Sawyer, Robert Rivas

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 80-0-0

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince 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, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

SENATE FLOOR: 34-3-3

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

NO: Jones, Nguyen, Seyarto

ABS, ABST OR NV: Caballero, Grove, Niello

ASSEMBLY FLOOR: 71-0-9

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

ABS, ABST OR NV: Bauer-Kahan, Chen, Flora, Vince Fong, Gallagher, Hoover, Mathis, Jim Patterson, Joe Patterson

UPDATED

VERSION: September 18, 2023

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0002475

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 552

Author:(Bennett)

As Amended Ver:September 8, 2023

Majority vote

SUMMARY

This bill require the California Department of Food and Agriculture (CDFA), upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program (RFECRA Program), as specified.

Senate Amendments

1. Make CDFA the administrator of the RFECRA Program instead of the Department of Conservation.
2. Changes the program funding from grants to financial assistance.
3. Clarifies that RFECRA entities have relevant cooperative development expertise and be able to provide meaningful benefits to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
4. Makes technical and clarifying changes.

COMMENTS

After the purchase of land, farm equipment is the largest capital investment for small farmers. Access to tools and equipment can be a limiting factor on both new and established farms. Equipment costs can vary widely based on the specific kind of farm equipment. Some cost examples reportedly include the following: 1) No-till drill: up to $22,000, 2) Compost spreader: up to $30,000, 3) Wood chipper: up to $50,000, 4) Packing machine: up to $30,000, and 5) Cold storage: in excess of $100,000. Available data suggest that nearly 75% of farmers in the State operate on less than $100,000 in gross sales, making high-value equipment difficult to purchase.

Equipment sharing programs allow farmers to borrow or lease high-value equipment. Studies have noted the benefits of equipment sharing programs for agriculture. Lowering the costs to acquire, use, and maintain equipment through equipment and tool sharing programs can improve farm profitability and viability. In addition, these programs also can increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers.

According to the Author

Equipment sharing programs allow farmers to borrow or lease high-value equipment from regional agricultural centers such as fairgrounds, universities, cooperative extension offices, farmer cooperatives, and resource conservation districts (RCD). These programs aim to alleviate the financial burden for farmers, increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers. There is evidence of successful state-government-run equipment sharing programs in states like the Southern Maryland Agricultural Development Commission equipment sharing and rental program and several of New Hampshire's County Conservation Districts have equipment rental programs to allow farmers to borrow specialized equipment at a low cost for soil health and nutrient management practices.

Arguments in Support

This bill will support small farm equipment lending programs across the state by funding both existing and new programs to purchase equipment, infrastructure, maintenance, and training, as well as some personnel costs. Furthermore, this program would support essential training for farmers on new and innovative small-farm equipment, equipment maintenance, as well as cooperative development on how to participate and design farmer cooperatives.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee, this bill would result in a cost pressure to provide funding and administrative support for the Pilot Program. The magnitude is unknown, but likely in the millions of dollars (General Fund, special funds and/or bond funds). The bill currently does not indicate a funding source nor amount. Consequently, CDFA is unable to determine its resulting workload. CDFA notes that, generally, the resources required to administer the Pilot Program would be commensurate to its size and duration. However, CDFA indicates that it would require, at a minimum, $400,000 per year over the life the Program.

VOTES:

ASM AGRICULTURE: 8-0-3

YES: Mathis, Aguiar-Curry, Alanis, Connolly, Irwin, Soria, Villapudua, Wood

ABS, ABST OR NV: Flora, Jones-Sawyer, Robert Rivas

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 80-0-0

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince 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, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

UPDATED

VERSION: September 8, 2023

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0002422

 THIRD READING  

Bill No: AB 552

Author: Bennett (D), et al.

Amended: 9/8/23 in Senate

Vote: 21

SENATE AGRICULTURE COMMITTEE: 3-0, 7/3/23

AYES: Hurtado, Alvarado-Gil, Padilla

NO VOTE RECORDED: Grove

SENATE NATURAL RES. & WATER COMMITTEE: 7-3, 7/10/23

AYES: Min, Allen, Eggman, Laird, Limón, Padilla, Stern

NOES: Seyarto, Dahle, Grove

NO VOTE RECORDED: Hurtado

SENATE APPROPRIATIONS COMMITTEE: 5-2, 9/1/23

AYES: Portantino, Ashby, Bradford, Wahab, Wiener

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Farmer Equity Act of 2017: Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program

SOURCE: California Climate and Agriculture Network

Community Alliance with Family Farmers

DIGEST:

1. This bill establishes the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program. This bill requires the California Department of Food and Agriculture (CDFA) under the Farmer Equity Act of 2017, to provide financial and technical assistance to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and, if funding is still available, for limited resource farmers and ranchers. This bill specifies the entities eligible for financial assistance under the program and requires applications to include information such as how the entity will maintain farm equipment sharing programs after the funding from this program expires. This bill sunsets the pilot program on January 1, 2029.

Senate Floor Amendments of 9/8/23:

1. Place the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program (Program) under the Farmer Equity Act of 2017;
2. Clarify eligible applicants may receive financial and technical assistance;
3. Specify what equipment sharing programs may use funding for;
4. Clarify which entities may receive direct funding; and
5. Specify applications for assistance must include a plan to operate after the period of financial assistance expires.

ANALYSIS:

Existing law:

1. Establishes the CDFA (Food and Agricultural Code Sections 101 and 102).
2. Establishes the Farmer Equity Act of 2017, which requires the CDFA to ensure the inclusion of socially disadvantaged farmers and ranchers in the development, adoption, implementation, and enforcement of food and agriculture laws, regulations, and policies and programs, as specified (Food and Agricultural Code Section 510).
3. Establishes the California Farmland Conservancy Program as a statewide grant program to support local efforts to establish agricultural conservation easements and land improvement projects for the purpose of preserving important agricultural land resources and enhancing sustainable agricultural issues (Public Resources Code Sections 10200 – 10264).
4. Establishes the Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program which provides funding through local air districts for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations (Chapter 249, Statutes of 2017 and Chapter 254, Statutes of 2017).

This bill:

1. Establishes the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program under the CDFA to provide financial and technical assistance to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers, and, if funding is still available, limited resource farmers and ranchers.
2. States eligible entities for financial assistance under this program shall include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving socially disadvantaged farmers or ranchers, or limited resource farmers or ranchers, or both.
3. States eligible activities include, but are not limited to, financial assistance to:
   1. Develop and expand equipment sharing including, but not limited to soil health practices, water conservation, and wildfire resilience.
   2. Purchase tools, equipment, and infrastructure to enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers and for limited resource farmers and ranchers.
4. States that technical assistance and support include, but are not limited to:
   1. Training on the use and maintenance of tools, equipment, and infrastructure.
   2. Outreach to ensure direct and meaningful benefits to socially disadvantaged farmers or ranchers and limited resource farmers or ranchers.
   3. Small farm tool demonstrations.
5. States in order to be eligible for financial under this program, an applicant shall provide:
   1. A description of the tools, equipment, and infrastructure the applicant will purchase.
   2. A description of the lending program, including safeguards for the long-term benefits of any tools, equipment, or infrastructure purchased, expected benefits of the lending program, and the types of farmers the applicant aims to serve, including specific outreach to be provided to socially disadvantaged farmers or ranchers and limited resource farmers or ranchers.
   3. A description of how the lending program will be maintained after the grant expires.
   4. Documentation for the lending program’s tools, equipment, and infrastructure that will be primarily used on farms or ranches with 500 acres or less.
   5. The type of technical assistance to be provided during the grant period.
6. States the department shall provide financial assistance to eligible entities primarily serving socially disadvantaged farmers or ranchers first, then to eligible entities that primarily serve limited resource farmers or ranchers.
7. Defines the following:
   1. “Limited resource farmer or rancher” to have the same definition as in Section 760.107 of Title 7 of the Code of Federal Regulations.
      1. Section 760.107 of Title 7 of the Code of Federal Regulations defines “limited resource farmer or rancher” to mean a producer who is both:
         1. A producer whose direct or indirect gross farm sales do not exceed $100,000 in both of the two calendar years that precede the calendar year that corresponds to the relevant program year, adjusted upwards for any general inflation since fiscal year 2004, inflation as measured using the Prices Paid by Farmer Index compiled by the National Agricultural Statistics Service (NASS), and
         2. A producer whose total household income is at or below the national poverty level for a family of four, or less than 50 percent of the county median household income for the same two calendar years referenced in paragraph (b)(2)(i) of this section, as determined annually using Commerce Department data.
   2. “Socially disadvantaged farmer or rancher” to have the same meaning as defined in Section 512 of the California Food and Agricultural Code.
      1. The California Food and Agricultural Code Section 512 defines “Socially disadvantaged farmer or rancher” to mean a farmer or rancher who is a member of a socially disadvantaged group.
      2. “Socially disadvantaged group” means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups include all of the following:
         1. African Americans.
         2. Native Indians.
         3. Alaskan Natives.
         4. Hispanics.
         5. Asian Americans.
         6. Native Hawaiians and Pacific Islanders.

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

According to the Senate Appropriations Committee, this bill would result in a cost pressure to provide funding and administrative support for the Pilot Program. The magnitude is unknown, but likely in the millions of dollars (General Fund, special funds and/or bond funds). This bill currently does not indicate a funding source nor amount. Consequently, CDFA is unable to determine its resulting workload. The department notes that, generally, the resources required to administer the Pilot Program would be commensurate to its size and duration. However, CDFA indicates that it would require, at a minimum, $400,000 per year over the life the Program.

SUPPORT: (Verified 9/11/23)

California Climate and Agriculture Network (co-source)

Community Alliance with Family Farmers (co-source)

Agricultural Institute of Marin

Agriculture and Land-based Training Association

Air's Wild Acres

Alchemist CDC

American Farmland Trust

Asrys Bridge

Barbell Farm

Beeworthy Farms

Belong Farm

California Association of Resource Conservation Districts

California Center for Cooperative Development

California Certified Organic Farmers

California Conservation Agriculture Systems Innovation Center

California Farmlink

California Food and Farming Network

California Native Seed Supply Collaborative

California Nurses for Environmental Health and Justice

California Plowshares

California State Grange

Californians Against Waste

Carbon Cycle Institute

Center for Food Safety

Center for Land-Based Learning

Central California Environmental Justice Network

Ceres Community Project

Chiatri De Laguna Farm

Contra Costa Resources Conservation District

Fibershed

Flourish Local

Foodshed Coop

Foodwise

Fresh Approach

Funders for Regenerative Agriculture

Gemperle Orchards

Greenbelt Alliance

Kuni Bea Farms

Loca Vivant Kitchen

Los Angeles Food Policy Council

Lost Coast Ranch

Marin County Resource Conservation District

Marin Resource Conservation District

Monterey Bay Farms

National Young Farmers Coalition

NextGen California

Occidental Arts and Ecology Center

Ojai Valley Fire Safe Council

Pesticide Action Network

Pesticide Action Network North America

Pie Ranch

Resource Conservation District of Greater San Diego County

Roots of Change

Sacramento Food Policy Council

San Diego Food System Alliance

Santa Barbara County Food Action Network

SEE-LA

Sierra Harvest

Solectrac

Sonoma County Farm Trails

Sustaina

The Climate Center

The Collins Farm

The Mixing Bowl LLC

The Praxis Project

Toluma Farms

Tomkat Ranch

Trinity County Resource Conservation District

Veggielution

Zero Foodprint

OPPOSITION: (Verified 9/11/23)

None received

ARGUMENTS IN SUPPORT: According to the author, “After the purchase of land, farm equipment is the largest capital investment for small farmers. These folks often have less cash-on-hand to invest in the equipment they need. My bill facilitates a heavy equipment tool sharing program where farmers can temporarily borrow the equipment they need. It is important that we protect our small agricultural operations because they are stewards of biological diversity, healthy soils, and many other conservation practices.”

A coalition letter of support that includes the sponsors of this bill stated equipment sharing programs allow farmers to borrow or lease high-value equipment used infrequently and by sharing equipment and facilities can serve multiple growers across a region.

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince 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, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

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

9/11/23 12:50:00

**** END ****

 THIRD READING  

Bill No: AB 552

Author: Bennett (D), et al.

Amended: 8/14/23 in Senate

Vote: 21

SENATE AGRICULTURE COMMITTEE: 3-0, 7/3/23

AYES: Hurtado, Alvarado-Gil, Padilla

NO VOTE RECORDED: Grove

SENATE NATURAL RES. & WATER COMMITTEE: 7-3, 7/10/23

AYES: Min, Allen, Eggman, Laird, Limón, Padilla, Stern

NOES: Seyarto, Dahle, Grove

NO VOTE RECORDED: Hurtado

SENATE APPROPRIATIONS COMMITTEE: 5-2, 9/1/23

AYES: Portantino, Ashby, Bradford, Wahab, Wiener

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Agriculture: Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program

SOURCE: California Climate & Agriculture Network

Community Alliance With Family Farmers

DIGEST:

This bill establishes the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program. The bill requires the California Department of Food and Agriculture (CDFA) to provide technical assistance and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and, if funding is still available, for limited resource farmers and ranchers. The bill sunsets the pilot program on January 1, 2029.

ANALYSIS:

Existing law:

1. Establishes the California Department of Food and Agriculture (CDFA) (Food and Agricultural Code Sections 101 and 102).
2. Establishes the Cannella Environmental Farming Act of 1995 under CDFA which, among other things, creates an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat (Food and Agricultural Code Sections 560-568).
3. Establishes the California Farmland Conservancy Program as a statewide grant program to support local efforts to establish agricultural conservation easements and land improvement projects for the purpose of preserving important agricultural land resources and enhancing sustainable agricultural issues (Public Resources Code Sections 10200 – 10264).
4. Establishes the Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program which provides funding through local air districts for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations (AB109, Chapter 249, Statutes of 2017 and AB 134, Chapter 254, Statutes of 2017).

This bill:

1. Establishes the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program under CDFA to provide technical assistance, including application assistance, and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers, and, if funding is still available, limited resource farmers and ranchers.
2. States eligible entities for grants under this program shall include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving socially disadvantaged farmers or ranchers, or limited resource farmers or ranchers, or both.
3. States eligible activities include, but are not limited to, grants to:
   1. Develop and expand equipment sharing including, but not limited to, soil health practices, water conservation, and wildfire resilience.
   2. Purchase tools, equipment, and infrastructure to enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers, and limited resource farmers and ranchers.
4. States that grants for technical assistance and support include, but are not limited to:
   1. Application assistance.
   2. Cooperative development.
   3. Training on the use and maintenance of tools, equipment, and infrastructure.
   4. Outreach to ensure direct and meaningful benefits to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
5. States in order to be eligible for a grant under this program, an applicant shall provide:
   1. A description of the tools, equipment, and infrastructure the applicant will purchase.
   2. A description of the lending program, including safeguards for the long-term benefits of any tools, equipment, or infrastructure purchased, expected benefits of the lending program, and the types of farmers the applicant aims to serve, including specific outreach to be provided to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
   3. A description of how the lending program will be maintained after the grant expires.
   4. Documentation for the lending program’s tools, equipment, and infrastructure that will be primarily used on farms or ranches with 500 acres or less.
   5. The type of technical assistance to be provided during the grant period.
6. States in providing grants pursuant to the program, the department shall provide grants to eligible entities primarily serving socially disadvantaged farmers or ranchers first, then to eligible entities that primarily serve limited resource farmers or ranchers.
7. Defines the following:
   1. “Limited resource farmer or rancher” to have the same definition as in Section 760.107 of Title 7 of the Code of Federal Regulations.
      1. Section 760.107 of Title 7 of the Code of Federal Regulations defines “limited resource farmer or rancher” to mean a producer who is both:
         1. A producer whose direct or indirect gross farm sales do not exceed $100,000 in both of the two calendar years that precede the calendar year that corresponds to the relevant program year, adjusted upwards for any general inflation since fiscal year 2004, inflation as measured using the Prices Paid by Farmer Index compiled by the National Agricultural Statistics Service (NASS), and
         2. A producer whose total household income is at or below the national poverty level for a family of four, or less than 50 percent of the county median household income for the same two calendar years referenced in paragraph (b)(2)(i) of this section, as determined annually using Commerce Department data.
   2. “Socially disadvantaged farmer or rancher” to have the same meaning as defined in Section 512 of the California Food and Agricultural Code.
      1. The California Food and Agricultural Code Section 512 defines “Socially disadvantaged farmer or rancher” to mean a farmer or rancher who is a member of a socially disadvantaged group.
      2. “Socially disadvantaged group” means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups include all of the following:
         1. African Americans.
         2. Native Indians.
         3. Alaskan Natives.
         4. Hispanics.
         5. Asian Americans.
         6. Native Hawaiians and Pacific Islanders.

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 funding and administrative support for the Pilot Program. The magnitude is unknown, but likely in the millions of dollars (General Fund, special funds and/or bond funds). The bill currently does not indicate a funding source nor amount. Consequently, CDFA is unable to determine its resulting workload. The department notes that, generally, the resources required to administer the Pilot Program would be commensurate to its size and duration. However, CDFA indicates that it would require, at a minimum, $400,000 per year over the life the Program.”

SUPPORT: (Verified 9/1/23)

California Climate & Agriculture Network (co-source)

Community Alliance With Family Farmers (co-source)

Agricultural Institute of Marin

Agriculture and Land-based Training Association

Air's Wild Acres

Alchemist CDC

American Farmland Trust

Asrys Bridge

Barbell Farm

Belong Farm

California Association of Resource Conservation Districts

California Center for Cooperative Development

California Certified Organic Farmers

California Conservation Agriculture Systems Innovation Center

California Farmlink

California Food and Farming Network

California Native Seed Supply Collaborative

California Nurses for Environmental Health and Justice

California Plowshares

California State Grange

Californians Against Waste

Carbon Cycle Institute

Center for Food Safety

Center for Land-based Learning

Central California Environmental Justice Network

Ceres Community Project

Chiatri De Laguna Farm

Contra Costa Resources Conservation District

Fibershed

Flourish Local

Foodshed Coop

FoodWise

Fresh Approach

Funders for Regenerative Agriculture

Gemperle Orchards

Greenbelt Alliance

Kuni Bea Farms

Los Angeles Food Policy Council

Lost Coast Ranch

Marin County Resource Conservation District

Monterey Bay Farms

National Young Farmers Coalition

Nextgen California

Occidental Arts and Ecology Center

Ojai Valley Fire Safe Council

Pesticide Action Network

Pesticide Action Network North America

Pie Ranch

Resource Conservation District of Greater San Diego County

Roots of Change

Sacramento Food Policy Council

San Diego Food System Alliance

Santa Barbara County Food Action Network

SEE-LA

Sierra Harvest

Solectrac

Sonoma County Farm Trails

Sustaina

The Climate Center

The Collins Farm

The Mixing Bowl LLC

The Praxis Project

Toluma Farms

Tomkat Ranch

Trinity County Resource Conservation District

Veggielution

Zero Foodprint

OPPOSITION: (Verified 9/1/23)

None received

ARGUMENTS IN SUPPORT: According to the author:

“After the purchase of land, farm equipment is the largest capital investment for small farmers. These folks often have less cash-on-hand to invest in the equipment they need. My bill facilitates a heavy equipment tool sharing program where farmers can temporarily borrow the equipment they need. It is important that we protect our small agricultural operations because they are stewards of biological diversity, healthy soils, and many other conservation practices.”

A coalition letter of support that includes the sponsors of the bill stated equipment sharing programs allow farmers to borrow or lease high-value equipment used infrequently and by sharing equipment and facilities can serve multiple growers across a region.

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince 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, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

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

9/2/23 12:38:39

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 552 (Bennett) - Cannella Environmental Farming Act of 1995: Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program

Bill Summary:

AB 552 would require the California Department of Food and Agriculture (CDFA), upon appropriation by the Legislature and in collaboration with certain entities, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program, as specified.

Fiscal Impact:

This bill would result in a cost pressure to provide funding and administrative support for the Pilot Program. The magnitude is unknown, but likely in the millions of dollars (General Fund, special funds and/or bond funds). The bill currently does not indicate a funding source nor amount. Consequently, CDFA is unable to determine its resulting workload. The department notes that, generally, the resources required to administer the Pilot Program would be commensurate to its size and duration. However, CDFA indicates that it would require, at a minimum, $400,000 per year over the life the Program.

Background:

After the purchase of land, farm equipment is the largest capital investment for small farmers. Access to tools and equipment can be a limiting factor on both new and established farms. Equipment costs can vary widely based on the specific kind of farm equipment. Some cost examples reportedly include the following: (1) No-till drill: up to $22,000, (2) Compost spreader: up to $30,000, (3) Wood chipper: up to $50,000, (4) Packing machine: up to $30,000, and (5) Cold storage: in excess of $100,000. Available data suggest that nearly 75 percent of farmers in the State operate on less than $100,000 in gross sales, making high-value equipment difficult to purchase.

Equipment sharing programs allow farmers to borrow or lease high-value equipment. Studies have noted the benefits of equipment sharing programs for agriculture. Lowering the costs to acquire, use, and maintain equipment through equipment and tool sharing programs can improve farm profitability and viability. In addition, these programs also can increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers.

Proposed Law:

This bill, upon appropriation by the Legislature and through January 1, 2029, among other things would do the following:

• Require CDFA, in collaboration with the Department of Conservation, the BIPOC Producer Advisory Committee, and the Small-Scale Producer Advisory Committee, to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program as part of the Cannella Environmental Farming Act of 1995 to provide grants and technical assistance to support regional farm equipment sharing and enhance cooperative benefits first for socially disadvantaged farmers and ranchers and, if funding is available, for limited resource farmers and ranchers or eligible entities that serve socially disadvantaged or limited resource farmers and ranchers, as specified.
• Require an applicant for a grant to provide CDFA with specified information, including a description of the farm equipment lending program.

Staff Comments:

In September 2017, the California Air Resources Board (CARB) received $135 million to reduce emissions from the agricultural sector from AB 134 (Committee on Budget, Chapter 254, Statutes of 2017) and AB 109 (Ting, Chapter 249, Statutes of 2017). The bills provide funding for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations. CARB staff worked with local air districts and stakeholders to develop the proposed Funding Agricultural Replacement Measures for Emission Reductions (FARMER) Program Guidelines, which set the minimum requirements for the program and ensure that the projects funded will provide the intended emission reductions. Local air districts receive funds based on a formula and award them to farmers and agricultural projects. Two additional project categories were added in April 2022. One new category is for zero-emission agricultural equipment. The other category is the Used Agricultural Equipment for Small Producers Pilot Project in the San Joaquin Valley, which allows small producers that may not have the means to purchase new equipment to replace their more-polluting equipment with cleaner equipment. As of September 2022, $685 million has been allocated for the FARMER program and $348 million has been awarded, funding 8,057 projects.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Dave Min, Chair

2023 - 2024 Regular

Bill No: AB 552 Hearing Date: July 10, 2023

Subject: Agriculture: Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program

BACKGROUND AND EXISTING LAW

Existing law:

1. Establishes the Department of Conservation (DOC) in the California Natural Resources Agency (CNRA) under the control of the director. Public Resources Code (PRC) §601.
2. Establishes, or provides authority to establish, programs at DOC (or at other agencies in partnership with DOC) to conserve agricultural lands and prevent their conversion to other uses, including the California Farmland Conservancy Program and the Sustainable Agricultural Lands Conservation Program under the Affordable Housing and Sustainable Communities Program. PRC §§10200 et seq. and PRC §§75200 et seq., respectively.
3. Establishes the California Department of Food and Agriculture (CDFA) under the control of the secretary. Food and Agriculture Code (FAC) §§101 and 102.
4. Establishes the Cannella Environmental Farming Act of 1995 which:
   1. Directs 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. Directs CDFA to establish and oversee a Healthy Soils Program.
   3. Directs the CDFA secretary to convene a Scientific Advisory Panel on Environmental Farming to advise the secretary on the implementation of the Healthy Soils Program and the State Water Efficiency and Enhancement Program, among others.
   4. Directs CDFA to establish a technical assistance grant program to provide funds to technical assistance providers to provide technical assistance to applicants for the Healthy Soils Program and the State Water Efficiency and Enhancement Program. FAC §§560 et seq.
5. Establishes the Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program, which provides funding to reduce criteria, toxic, and greenhouse gas (GHG) emissions from the agricultural sector through the replacement of agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations. Budget Act of 2017 (AB109, Chapter 249, Statutes of 2017 and AB 134, Chapter 254, Statutes of 2017).

Background

Access to tools and equipment can be a limiting factor on both new and established farms. Equipment costs are typically the second largest draw of capital for farmers, after land acquisition. Equipment costs can vary widely based on the specific kind of farm equipment. Some examples include:

• No-till drill: $7,000 to $22,000
• Compost spreader: $2,000 to $30,000
• Wood chipper: $6,000 to $50,000
• Front loader: $30,000
• Trailer: $3,600 to $5,000
• Cold storage: $15,000 to $100,000+
• Packing machine: $10,000 to $30,000

These costs can be inaccessible for small, underserved, and beginning farmers with limited cash flow for major purchases. They can also be a challenge for more established farmers. For example, according to materials provided by the sponsors, in California, nearly 75 percent of farmers operate on less than $100,000 in gross sales, making high-value equipment out of financial reach for these growers.

Equipment sharing programs allow farmers to borrow or lease high-value equipment. Studies have noted the benefits of equipment sharing programs for agriculture. Bringing down the costs to acquire, use, and maintain equipment through equipment and tool sharing programs can improve farm profitability and viability. These programs also can increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers.

Equipment-sharing initiatives come in a range of forms, formal and informal, small and large, sharing anywhere from a single piece of equipment to a comprehensive suite of tools. This includes:

• Tool lending networks, in which farmers lend each other equipment they individually own on an informal basis.
• Direct co-ownership where farmers purchase tools together. These arrangements tend to come from close relationships, like family, neighbors, and friends.
• Shared equipment businesses where farmers form a separate legal entity (like an LLC) to own a set of tools. This can have advantages over direct co-ownership in that the LLC limits the liability of those participating, and facilitates transitioning members in and out of the organization.
• Equipment co-operatives, which is a type of corporation, designed to be owned and governed by its members. Machinery cooperatives are common and significant parts of the agricultural economy in countries like Sweden, Germany, and Canada.
• State or federal programs in which government agencies work within regional farm communities. For example, the Southern Maryland Agricultural Development Commission (SMADC) is a state-commissioned agency that seeks to support the agricultural economy of Southern Maryland through a tool-sharing initiative in the five counties it serves. SMADC works with Soil Conservation Districts and one Farm Bureau office to provide low-cost equipment rentals.
• Nonprofit programs in which local nonprofits host or organize tool sharing programs, often with a focus on either ecology or agriculture. For example, Future Harvest, a membership nonprofit in Maryland created the Tool and Equipment Sharing and Rental Platform to facilitate farmer lending, renting, or custom hire, with the aim of increasing access to the tools of the trade.

In Sweden, machine rings (equipment sharing groups) started at the beginning of the 1990s and now number 20 local associations with about 5,000 members (about 6 percent of Swedish farmers), while Germany has about five times that amount of equipment sharing activity. Canadian farmers in Ontario and Saskatchewan have formed numerous machinery cooperatives. There is evidence of successful state-government-run equipment sharing programs in states like Maryland and New Hampshire, as well as numerous nonprofit-run programs. In general, however, the US is comparatively far behind, with farmers primarily concerned with two questions:

• What if I cannot use it when I need it?
• What happens when it breaks?

According to “A Guide to Sharing Farm Equipment: A Tool-Sharing Toolkit for Farmers, Cooperators, and Organizers of Shared Equipment Pools,” produced by The Sustainable Agriculture Research and Education Program (SARE), these questions have been successfully addressed by the different types of equipment sharing models listed above both nationally and internationally.

PROPOSED LAW

This bill would, upon appropriation and through January 1, 2029, direct DOC to establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program. Further, the bill would:

1. Direct DOC to provide grants and technical assistance to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers.
2. Define “eligible entities” to include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving socially disadvantaged farmers or ranchers or limited resource farmers or ranchers, or both.
3. Define “eligible activities” to include:
   1. Grants to develop and expand equipment sharing, including the purchase of tools, equipment, and infrastructure to support conservation practices, as specified, and to enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers.
   2. Grants to provide technical assistance and support, including for application assistance, cooperative development, training on the use and maintenance of tools, equipment, and infrastructure, and outreach to ensure direct and meaningful benefits to socially disadvantaged farmers or ranchers and limited resource farmers or ranchers.
4. Require an applicant to provide certain information in the grant application, including a description of how the lending program will be maintained after the period of the grant expires.
5. Require DOC to first provide grants to eligible entities that primarily serve socially disadvantaged farmers or ranchers and then, if there is any funding remaining, to provide grants to eligible entities that primarily serve limited resource farmers or ranchers.
6. Authorize DOC to expand or amend an existing grant program to meet the requirements of this bill.
7. Define terms, including “limited resource farmer or rancher” and “socially disadvantaged farmer or rancher.”

ARGUMENTS IN SUPPORT

According to the author, “After the purchase of land, farm equipment is the largest capital investment for small farmers. These folks often have less cash-on-hand to invest in the equipment they need. My bill facilitates a heavy equipment tool sharing program where farmers can temporarily borrow the equipment they need. It is important that we protect our small agricultural operations because they are stewards of biological diversity, healthy soils, and many other conservation practices.”

ARGUMENTS IN OPPOSITION

None received.

COMMENTS

Referral. This bill was referred to the Senate Agriculture Committee first and this Committee second. The Senate Agriculture Committee passed the bill 3-0 on July 3, 2023. Elements of the bill under the Senate Agriculture Committee’s jurisdiction were discussed there and are included here for context and completeness only.

This bill would establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program at DOC through January 1, 2029. The program would support farm equipment lending programs across the state by funding both existing and new programs to purchase tools, equipment, and infrastructure, as well as training on the use and maintenance of these items, which could include demonstrations. Furthermore, this program would support the design and development of equipment sharing cooperatives. The program would target farms or ranches that are 500 acres or less and would prioritize support for socially disadvantaged farmers and ranchers first, and then limited resource farmers or ranchers.

In this context, “socially disadvantaged farmer or rancher” means a farmer or rancher from a socially disadvantaged group, which means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities, as specified.

In this context, “a limited resource farmer or rancher” means a producer who is both:

• A producer whose direct or indirect gross farm sales do not exceed $100,000 in both of the two calendar years, as specified.
• A producer whose total household income is at or below the national poverty level for a family of four, or less than 50 percent of the county median household income for the same two calendar years, as specified.

The sponsors note that “equipment sharing programs tied with essential technical resources and assistance from equipment maintenance, innovation, and farmer cooperatives models can support farmers to develop greater community-based sharing economies and increase community bonds between farmers. Offering training programs on equipment and cooperative models through these equipment sharing hubs can help small and undeserved farmers organize to share other essential resources such as knowledge and build farmer relationships.”

Why DOC? The state divides agricultural issues primarily between two agencies: CDFA and DOC. CDFA works directly with farmers and ranchers, seeks to protect and promote the state’s agriculture, and is one state agency, among others, that regulates the industry. The Office of Environmental Farming and Innovation under CDFA works with CDFA’s Science Advisory Panel to support agricultural production and incentivize practices that result in a net benefit for the environment through innovation, efficient management, and science. For example, the Office administers the Healthy Soils Program, the State Water Efficiency and Enhancement Grant Program, dairy digester and alternative manure management programs, and a pollinator habitat program, among others.

DOC supports efforts to conserve agricultural lands in California, protecting them from development and conversion to other uses. DOC offers technical and financial assistance and works with local governments, resource conservation districts, land trusts, and other organizations to support this mission. This includes multiple programs that offer grant funding for agricultural conservation plans and easements, like the Sustainable Agricultural Lands Conservation Program, the California Farmland Conservancy Program, and the Agricultural Land Mitigation Program. DOC also maps the state’s agricultural lands under the Farmland Mapping and Monitoring Program to track losses of agricultural lands to other uses over time and provides technical assistance to local governments in their implementation of the Williamson Act, a program that offers property tax reductions to landowners who agree to maintain their land for agricultural uses.

A key question for the Committee is whether DOC or CDFA should house this program? According to the author, “DOC has strong existing relationships with resource conservation districts, which are likely recipients of the grants. The program in AB 552 also allows for tool sharing for things such as wildfire mitigation, which is more under DOC’s purview.” Staff notes that CDFA also has strong existing relationships with resource conservation districts, in particular through its technical assistant grant program, which hires technical assistance providers like resource conservation districts to serve the Healthy Soils and State Water Efficiency and Enhancement Grant Programs. CDFA also has close relationships with the other listed eligible grantees, including county agricultural commissioners, the University of California Cooperative Extension, and different types of farmers and ranchers. DOC is less directly connected to some of these grantees.

Further, staff notes that the bills proposes two general purposes for the tool sharing, including (1) to support conservation practices, including, but not limited to, soil health practices, water conservation, and wildfire resilience and (2) to enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers. Certainly DOC has experience related to wildfire resilience though the Regional Forest and Fire Capacity Program. CDFA, however, has experience with all of the other listed purposes.

Finally, staff notes that CDFA is already piloting an equipment sharing program under the Healthy Soils Program. In particular, applicants may requests up to $30,000 to purchase equipment for shared use and to assist in implementing heathy soils practices. The purpose of this allowance is to assist and encourage healthy soil practices on farms where access to such equipment prohibits adoption. The funds can be used as cost share up to 50 percent of the total cost of each equipment. Applicants must provide a detailed plan covering maintenance, equitable sharing, and storage during the grant agreement term and up to the useable life of the equipment.

Committee amendment. To avoid duplicating efforts across agencies, the Committee may wish to consider amending the bill to move the proposed program to CDFA, but require CDFA to collaborate with DOC and others during implementation. See amendments.

SUGGESTED AMENDMENTS

Strike Section 1 of the bill and replace with the following:

SECTION 1. Section 571 is added to the Food and Agriculture Code, to read:

571. (a) Upon appropriation by the Legislature for purposes of this section, the department, in collaboration with the Department of Conservation, the Black, Indigenous and People of Color Farmer Advisory Committee, and the Small Farmer Advisory Committee, shall establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program to provide grants and technical assistance to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers.

(b) Activities eligible for funding include all of the following:

(1) Developing and expanding equipment sharing programs, including, but not limited to, the purchase of tools, equipment, and infrastructure to do both of the following:

(A) Support environmental farming practices, including, but not limited to, practices that promote soil health, water conservation, wildlife and their habitat, and wildfire resilience.

(B) Enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers and limited resource farmers and ranchers.

(2) Providing technical assistance and support, including, but not limited to, any of the following:

(A) Application assistance.

(B) Cooperative development.

(C) Training on the use and maintenance of tools, equipment, and infrastructure.

(D) Outreach to ensure direct and meaningful benefits to socially disadvantaged farmers or ranchers and limited resource farmers or ranchers.

(E) Small farm tool demonstrations.

(c) The program shall do both of the following:

(1)(A) Provide grants for projects that primarily benefit socially disadvantaged farmers or ranchers.

(B) If there are moneys available after providing grants pursuant to subparagraph (A), provide grants for projects that primarily benefit limited resource farmers or ranchers.

(2) Prioritize grants for projects that primarily benefit farms or ranches that are 500 acres or less.

(d) Entities eligible for grant funding shall include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving socially disadvantaged farmers or ranchers or limited resource farmers or ranchers, or both.

(e) In order to be eligible for a grant under the program, an applicant shall provide the department all of the following information:

(1) A list and description of the tools, equipment, and infrastructure the applicant will purchase.

(2) A description of the lending program, including safeguards for the long-term benefits of any tools, equipment, or infrastructure purchased, expected benefits of the lending program, and the types of farmers or ranchers the applicant aims to serve, including specific outreach that will be provided to socially disadvantaged farmers or ranchers and limited resource farmers or ranchers.

(3) A description of how the lending program will be maintained after the period of the grant expires.

(4) Documentation that the lending program’s tools, equipment, and infrastructure will be primarily used on farms or ranches that are 500 acres or less.

(5) The type of technical assistance to be provided during the grant period.

(f) For purposes of this section, the following definitions apply:

(1) “Limited resource farmer or rancher” has the same definition as in Section 760.107 of Title 7 of the Code of Federal Regulations.

(2) “Socially disadvantaged farmer or rancher” has the same meaning as defined in Section 512 of the Food and Agricultural Code.

(g) The Farmer Equity Advisor shall ensure that the pilot program meets the objectives of Article 6 (commencing with Section 510) of Chapter 3 of Part 1 of Division 1 of this Code.

(h) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.

SUPPORT

California Climate and Agriculture Network (co-sponsor)

Community Alliance with Family Farmers (co-sponsor)

Agricultural Institute of Marin

Agriculture and Land-Based Training Association

Air's Wild Acres

Alchemist CDC

American Farmland Trust

ASRYS Bridge

Barbell Farm

Beeworthy Farms

Belong Farm

California Association of Resource Conservation Districts

California Center for Cooperative Development

California Certified Organic Farmers

California Conservation Agriculture Systems Innovation Center

California FarmLink

California Food and Farming Network

California Native Seed Supply Collaborative

California Nurses for Environmental Health and Justice

California Plowshares

California State Grange

Californians Against Waste

Carbon Cycle Institute

Center for Food Safety

Center for Land-Based Learning

Central California Environmental Justice Network

Ceres Community Project

Chiatri De Laguna Farm

Contra Costa Resource Conservation District

Fibershed

Flourish Local

Foodshed Coop

Foodwise

Fresh Approach

Funders for Regenerative Agriculture

Gemperle Orchards

Greenbelt Alliance

Kuni Bea Farms

Loca Vivant Kitchen

Los Angeles Food Policy Council

Lost Coast Ranch

Marin Resource Conservation District

Monterey Bay Farms

National Young Farmers Coalition

NextGen California

Occidental Arts and Ecology Center

Ojai Valley Fire Safe Council

Pesticide Action Network

Pesticide Action Network North America

Pie Ranch

Resource Conservation District of Greater San Diego County

Roots of Change

Sacramento Food Policy Council

San Diego Food System Alliance

Santa Barbara County Food Action Network

SEE-LA

Shinta Kawahara Company

Sierra Harvest

Solectrac

Sonoma County Farm Trails

Sustaina Company

The Climate Center

The Collins Farm

The Mixing Bowl LLC

The Praxis Project

Toluma Farms

TomKat Ranch

Trinity County Resource Conservation District

Veggielution

Zero Foodprint

One individual

OPPOSITION

None Received

-- END --

SENATE COMMITTEE ON AGRICULTURE

Senator Melissa Hurtado, Chair

2023 - 2024 Regular

Bill No: AB 552 Hearing Date: 7/3/23

Subject: Agriculture: Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program

SUMMARY

:

This bill would establish the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program. The bill requires the California Department of Conservation (DOC) to provide technical assistance and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers and, if funding is still available, for limited resource farmers and ranchers. The bill sunsets the pilot program on January 1, 2029.

BACKGROUND AND EXISTING LAW

:

Existing law:

1. Establishes the California Department of Conservation (DOC) which administers a variety of programs vital to California’s public safety, environment, and economy (Public Resources Code Section 601).
2. Establishes the California Farmland Conservancy Program as a statewide grant program to support local efforts to establish agricultural conservation easements and land improvement projects for the purpose of preserving important agricultural land resources and enhancing sustainable agricultural issues (Public Resources Code Sections 10200 – 10264).
3. Establishes the Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program which provides funding through local air districts for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations (AB109, Chapter 249, Statutes of 2017 and AB 134, Chapter 254, Statutes of 2017).

PROPOSED LAW

:

This bill:

1. Establishes the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program under the Department of Conservation (DOC) to provide technical assistance, including application assistance, and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers, and limited resource farmers and ranchers.
2. States eligible entities for grants under this program shall include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving socially disadvantaged farmers or ranchers, or limited resource farmers or ranchers, or both.
3. States eligible activities include, but are not limited to, grants to:
   1. Develop and expand equipment sharing including, but not limited to, soil health practices, water conservation, and wildfire resilience.
   2. Purchase tools, equipment, and infrastructure to enhance regional food and fiber systems and cooperative resources for socially disadvantaged farmers and ranchers, and limited resource farmers and ranchers.
4. States that grants for technical assistance and support include, but are not limited to:
   1. Application assistance.
   2. Cooperative development.
   3. Training on the use and maintenance of tools, equipment, and infrastructure.
   4. Outreach to ensure direct and meaningful benefits to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
5. States in order to be eligible for a grant under this program, an applicant shall provide:
   1. A description of the tools, equipment, and infrastructure the applicant will purchase.
   2. A description of the lending program, including safeguards for the long-term benefits of any tools, equipment, or infrastructure purchased, expected benefits of the lending program, and the types of farmers the applicant aims to serve, including specific outreach to be provided to socially disadvantaged farmers or ranchers, and limited resource farmers or ranchers.
   3. A description of how the lending program will be maintained after the grant expires.
   4. Documentation for the lending program’s tools, equipment, and infrastructure that will be primarily used on farms or ranches with 500 acres or less.
   5. The type of technical assistance to be provided during the grant period.
6. States in providing grants pursuant to the program, the department shall:
   1. Provide grants to eligible entities primarily serving socially disadvantaged farmers or ranchers first, then to eligible entities that primarily serve limited resource farmers or ranchers.
7. Defines the following:
   1. “Limited resource farmer or rancher” to have the same definition as in Section 760.107 of Title 7 of the Code of Federal Regulations.
      1. Section 760.107 of Title 7 of the Code of Federal Regulations defines “limited resource farmer or rancher” to mean a producer who is both:
         1. A producer whose direct or indirect gross farm sales do not exceed $100,000 in both of the two calendar years that precede the calendar year that corresponds to the relevant program year, adjusted upwards for any general inflation since fiscal year 2004, inflation as measured using the Prices Paid by Farmer Index compiled by the National Agricultural Statistics Service (NASS), and
         2. A producer whose total household income is at or below the national poverty level for a family of four, or less than 50 percent of the county median household income for the same two calendar years referenced in paragraph (b)(2)(i) of this section, as determined annually using Commerce Department data.
   2. “Socially disadvantaged farmer or rancher” to have the same meaning as defined in Section 512 of the California Food and Agricultural Code.
      1. The California Food and Agricultural Code Section 512 defines “Socially disadvantaged farmer or rancher” to mean a farmer or rancher who is a member of a socially disadvantaged group.
      2. “Socially disadvantaged group” means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups include all of the following:
         1. African Americans.
         2. Native Indians.
         3. Alaskan Natives.
         4. Hispanics.
         5. Asian Americans.
         6. Native Hawaiians and Pacific Islanders.

ARGUMENTS IN SUPPORT:

According to the author:

“After the purchase of land, farm equipment is the largest capital investment for small farmers. These folks often have less cash-on-hand to invest in the equipment they need. My bill facilitates a heavy equipment tool sharing program where farmers can temporarily borrow the equipment they need. It is important that we protect our small agricultural operations because they are stewards of biological diversity, healthy soils, and many other conservation practices.”

A coalition letter of support that includes the sponsors of the bill stated equipment sharing programs allow farmers to borrow or lease high-value equipment used infrequently and by sharing equipment and facilities can serve multiple growers across a region.

ARGUMENTS IN OPPOSITION:

None received.

COMMENTS

:

Studies worldwide have noted the benefits of equipment sharing programs for agriculture. In 2019, Future Harvest, a membership nonprofit in the state of Maryland began assisting their member farms to “be leaders and practical laboratories for developing and championing practices that lead to commercial success through the lens of protecting the bay.” The research revealed access to tools and equipment could be a limiting factor on both new and established farms. As a result of these findings, Future Harvest created the Tool and Equipment Sharing and Rental Platform to facilitate farmer lending, renting, or custom hire, with the aim of increasing access to the tools of the trade (https://futureharvest.org/resources/resources-for-farmers/tools-sharing-rental/).

The California Department of Food and Agriculture (CDFA) is currently piloting an equipment sharing program housed in the Healthy Soils Program. In April of this year, the Department sent out a “Request for Grant Application” for the Healthy Soils Block Grant Program. The application states that block grant recipients may request up to $30,000 to purchase equipment as 50% cost-share to assist on-farm project implementation (https://www.cdfa.ca.gov/oefi/healthysoils/docs/HSP_Block_Grant_2023RGA.pdf).

The California Air Resources Board (CARB) has the Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program which provides funding for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations. The FARMER program is handled through local air districts who select which projects to fund.

DOUBLE REFERRAL:

Should this measure be approved by the Senate Committee on Agriculture, the bill will be re-referred to the Senate Committee on Natural Resources and Water.

PRIOR ACTIONS

:

SUPPORT

:

Agricultural Institute of Marin
Agriculture and Land-based Training Association
Air's Wild Acres
Alchemist CDC
American Farmland Trust
Asrys Bridge
Barbell Farm
Belong Farm
California Association of Resource Conservation Districts
California Center for Cooperative Development
California Certified Organic Farmers (CCOF)
California Climate & Agriculture Network (CALCAN) – Co-Sponsor

California Conservation Agriculture Systems Innovation Center
California Farmlink
California Food and Farming Network
California Native Seed Supply Collaborative
California Nurses for Environmental Health and Justice
California Plowshares
California State Grange
Californians Against Waste
Carbon Cycle Institute
Center for Food Safety; the
Center for Land-based Learning
Central California Environmental Justice Network
Ceres Community Project
Chiatri De Laguna Farm
Community Alliance With Family Farmers (CAFF) – Co-sponsor
Contra Costa Resources Conservation District
Fibershed
Flourish Local
Foodshed Coop
FoodWise
Fresh Approach

Funders for Regenerative Agriculture
Gemperle Orchards
Greenbelt Alliance
Kuni Bea Farms
Los Angeles Food Policy Council
Lost Coast Ranch
Marin County Resource Conservation District
Monterey Bay Farms
National Young Farmers Coalition

Nextgen California
Occidental Arts and Ecology Center
Ojai Valley Fire Safe Council
Pesticide Action Network
Pesticide Action Network North America
Pie Ranch
Resource Conservation District of Greater San Diego County
Roots of Change
Sacramento Food Policy Council
San Diego Food System Alliance
Santa Barbara County Food Action Network
SEE-LA
Sierra Harvest
Solectrac
Sonoma County Farm Trails
Sustaina
The Climate Center
The Collins Farm

The Mixing Bowl LLC
The Praxis Project
Toluma Farms

Tomkat Ranch
Trinity County Resource Conservation District
Veggielution
Zero Foodprint

OPPOSITION

:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 552

Author:(Bennett)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

This bill establishes, upon appropriation by the Legislature, the Regional Farmer Equipment and Cooperative Resources Assistance Pilot Program (RFECR program) at the Department of Conservation (DOC) with the purpose of setting up farm equipment sharing programs across the state.

Major Provisions

1. Requires DOC to provide technical assistance, including application assistance, and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers (SDFR) and limited resource farmers and ranchers (LRFR).
2. Require that eligible entities for RFECR grants include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving SDFR or LRFR, or both
3. Allows DOC to expand or amend an existing grant program to meet the requirements of this section.
4. Repeals the RFECR program on January 1, 2029.

COMMENTS

California is the largest agriculture producing state in the nation, with over 400 crops. California farms are smaller than the national average. The most recent USDA Agriculture census showed that 65% of the farms in California are under 50 acres. While all farming in California face numerous issues such as labor, regulations, equipment and land cost, not to mention fire, drought and floods, this issues affect small farms more intensely.

Small-scale, SDFR, LRFR, and beginning farmers and ranchers face significant barriers in accessing infrastructure resources. After land, the purchase of farm equipment and infrastructure is the second largest capital investment and remains difficult to get to for small, underserved and beginning farmers with limited cash flow for major purchases. These small-scale farming operations require a greater variety of costly equipment and some high-capital equipment is only used a few times a year. Cooperatively managed equipment sharing can help address these infrastructure barriers and increase farm viability, while supporting implementation of conservation practices and maximizing efficient use of equipment.

According to the Author

Equipment sharing programs allow farmers to borrow or lease high-value equipment from regional agricultural centers such as fairgrounds, universities, cooperative extension offices, farmer cooperatives, and resource conservation districts (RCD). These programs aim to alleviate the financial burden for farmers, increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers. There is evidence of successful state-government-run equipment sharing programs in states like the Southern Maryland Agricultural Development Commission equipment sharing and rental program and several of New Hampshire's County Conservation Districts have equipment rental programs to allow farmers to borrow specialized equipment at a low cost for soil health and nutrient management practices.

Arguments in Support

This bill will support small farm equipment lending programs across the state by funding both existing and new programs to purchase equipment, infrastructure, maintenance, and training, as well as some personnel costs. Furthermore, this program would support essential training for farmers on new and innovative small-farm equipment, equipment maintenance, as well as cooperative development on how to participate and design farmer cooperatives.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, this bill has unknown cost but likely significant cost pressure (General Fund, special fund, or bond funds) to provide funding for the pilot program. DOC notes, as an example, if the department provides grants to 10 regional farm equipment sharing sites across the state at an estimated cost of $1 million per site, the proposed program would require an appropriation (one-time or ongoing, depending on what the Legislature approves) of at least $10.62 million ($10 million for the grants and the remainder to hire four new positions to administer the Program). DOC notes that comparable grant programs under its purview are periodically or annually appropriated up to several million dollars to accomplish program goals.

VOTES

ASM AGRICULTURE: 8-0-3

YES: Mathis, Aguiar-Curry, Alanis, Connolly, Irwin, Soria, Villapudua, Wood

ABS, ABST OR NV: Flora, Jones-Sawyer, Robert Rivas

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: May 18, 2023

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0000574

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 552

Author:(Bennett) – As Amended Ver:March 6, 2023

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

SUMMARY:

This bill establishes the Regional Farmer Equipment and Cooperative Resources Assistance Program (Program) at the Department of Conservation (DOC).

Specifically, this bill:

1. Establishes the Program within DOC and specifies entities that are eligible for grants. Requires DOC to provide technical assistance, including application assistance, and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers (SDFR) and limited resource farmers and ranchers (LRFR), as defined.
2. Requires eligible activities of the Program to include (a) grants to eligible entities to develop and expand equipment sharing including the purchase of tools, equipment, and infrastructure to support specified conservation practices and to enhance regional food and fiber systems and cooperative resources for SDFR and LRFR and (b) grants to eligible entities to provide technical assistance and support, including application assistance; cooperative development; training on the use and maintenance of tools, equipment, and infrastructure; and outreach to ensure direct and meaningful benefits to SDFR and LRFR.
3. Requires applicants to provide DOC with specified information in order to be eligible for a grant under the Program. Requires DOC, in providing grants, to a) provide grants to eligible entities that primarily serve SDFR; and b) if there are moneys available after providing grants that primarily serve SDFR, provide grants to eligible entities that primarily serve LRFR.
4. Allows DOC to expand or amend an existing grant program to meet the requirements of this bill.
5. Requires funding for the Program to be made available upon appropriation by the Legislature.

FISCAL EFFECT:

Unknown but likely significant cost pressure (General Fund, special fund, or bond funds) to provide funding for the Program. DOC notes, as an example, if the department provides grants to 10 regional farm equipment sharing sites across the state at an estimated cost of $1 million per site, the proposed Program would require an appropriation (one-time or ongoing, depending on what the Legislature approves) of at least $10.62 million ($10 million for the grants and the remainder to hire four new positions to administer the Program). DOC notes that comparable grant programs under its purview are periodically or annually appropriated up to several million dollars to accomplish program goals.

COMMENTS:

1) Purpose. According to the author:

After the purchase of land, farm equipment is the largest capital investment for small farmers. These folks often have less cash-on-hand to invest in the equipment they need. My bill facilitates a heavy equipment tool sharing program where farmers can temporarily borrow the equipment they need. It is important that we protect our small agricultural operations because they are stewards of biological diversity, healthy soils, and many other conservation practices.

2) Equipment Sharing Programs. According to the Community Alliance with Family Farmers and the California Climate and Agriculture Network, the co-sponsors of the bill, equipment sharing programs allow farmers to borrow or lease high-value equipment from regional agricultural centers such as fairgrounds, universities, cooperative extension offices, farmer cooperatives, and resource conservation districts. State-government-run and non-profit-run equipment sharing programs exist in the states of Maryland and New Hampshire as well as in Sweden, Germany, and Canada.

3) Equipment Costs. Equipment costs vary widely based on the specific kind of farm equipment. Some examples provided by the sponsors of the bill include:

• No-till drill: $7,000 to $22,000
• Compost spreader: $2,000 to $30,000
• Wood chipper: $6,000 to $50,000
• Front loader: $30,000
• Trailer: $3,600 to $5,000
• Cold storage: $15,000 to $100,000+
• Packing machine: $10,000 to $30,000

4) Support. Writing in support of the bill, a coalition of farmers and food organizations state:

In California, 75% of farms operate with net cash farm income gains under $25,000 or with net losses…Often, conservation practices and agricultural wildfire mitigation strategies, such as prescribed grazing, require high-value equipment that is used infrequently. Similarly, infrastructure such as cold storage facilities are often prohibitively expensive, but shared facilities can serve multiple growers across a region throughout the year, especially in regions where different crops require storage at different times. Equipment sharing programs allow farmers to borrow or lease high-value equipment and can facilitate conservation practices, help alleviate financial barriers to equipment, reduce greenhouse gas emissions, and provide necessary resources to build regional food economies.

5) FARMER Program. The Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program at the Air Resources Board funds agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations. Local air districts receive funds based on a formula and award them to farmers and agricultural projects. Two additional project categories were added in April 2022. One new category is for zero-emission agricultural equipment. The other category is the Used Agricultural Equipment for Small Producers Pilot Project in the San Joaquin Valley, which allows small producers that may not have the means to purchase new equipment to replace their more-polluting equipment with cleaner equipment. As of September 2022, $685 million has been allocated for the FARMER program and $347.6 million has been awarded, funding 8,057 projects.

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

Date of Hearing: March 15, 2023

ASSEMBLY COMMITTEE ON AGRICULTURE

Robert Rivas, Chair

ABPCA Bill Id:AB 552

Author:(Bennett) – As Amended Ver:March 6, 2023

SUBJECT: Agriculture: Regional Farmer Equipment and Cooperative Resources Assistance Program

SUMMARY: This bill establishes the Regional Farmer Equipment and Cooperative Resources Assistance Program (RFECR program) at the Department of Conservation (DOC) with the purpose of setting up farm equipment sharing programs across the state. Specifically, this bill:

1. Establishes the RFECR program within DOC.
   
2. Requires DOC to provide technical assistance, including application assistance, and grants in order to support regional farm equipment sharing and enhance cooperative benefits for socially disadvantaged farmers and ranchers (SDFR) and limited resource farmers and ranchers (LRFR).
   
3. Require that eligible entities for RFECR grants include resource conservation districts, county agricultural commissioners, the University of California Cooperative Extension, tribal entities, small and underserved farmer cooperatives, and nonprofit organizations serving SDFR or LRFR, or both.
   
4. Requires eligible activities of the RFECR program to include, but are not limited to, all of the following:
   
   1. Grants to eligible entities to develop and expand equipment sharing including, but not limited to, both of the following:
      
      1. The purchase of tools, equipment, and infrastructure to support conservation practices including, but not limited to, soil health practices, water conservation, and wildfire resilience.
      2. The purchase of tools, equipment, and infrastructure to enhance regional food and fiber systems and cooperative resources for SDFR and LRFR.
         
   2. Grants to eligible entities to provide technical assistance and support, including, but not limited to, any of the following.
      
      1. Application assistance.
      2. Cooperative development.
      3. Training on the use and maintenance of tools, equipment, and infrastructure.
      4. Outreach to ensure direct and meaningful benefits to SDFR and LRFR.
         
5. Requires applicant to provide DOC all of the following information:
   
   1. A description of the types of tools, equipment, and infrastructure the applicant will purchase.
   2. A description of the lending program, including safeguards for the long-term benefits of any tools, equipment, or infrastructure purchased, expected benefits of the lending program, and the types of farmers the applicant aims to serve, including specific outreach that will be provided to SDFR and LRFR.
   3. A description of how the lending program will be maintained after the period of the grant expires.
   4. Documentation that the lending program’s tools, equipment, and infrastructure will be primarily used on farms or ranches that are 500 acres or less.
   5. The type of technical assistance to be provided during the grant period including, but not limited to, cooperative development, equipment maintenance of tools, and small farm tool demonstrations.
      
6. Requires DOC, in providing grants pursuant, to do both of the following:
   
   1. Provide grants to eligible entities that primarily serve SDFR.
   2. If there are moneys available after providing grants, provide grants to eligible entities that primarily serve LRFR.
      
7. Allows DOC to expand or amend an existing grant program to meet the requirements of this section.
   
8. Requires funding for RFECR program to be made available upon appropriation by the Legislature.
   
9. Defines the following:
   
   1. “Limited resource farmer or rancher” has the same definition as in Section 760.107 of Title 7 of the Code of Federal Regulations.
   2. “Socially disadvantaged farmer or rancher” has the same meaning as defined in Section 512 of the Food and Agricultural Code.

EXISTING LAW:

DOC administers various programs relating to agriculture including the California Farmland Conservancy Program (CFCP). Public Resource Cod (PRC) 10200 - 10264

Allows CFCP to offer financial assistance, including grants or contracts, for projects and activities on agricultural lands that support agricultural conservation and sustainable land management, as specified. PRC 10230.2

FISCAL EFFECT: Unknown

COMMENTS: California is the largest agriculture producing state in the nation, with over 400 crops. California farms are smaller than the national average. The most recent USDA Agriculture census showed that 65% of the farms in California are under 50 acres. While all farming in California face numerous issues such as labor, regulations, equipment and land cost, not to mention fire, drought and floods, this issues affect small farms more intensely.

Small-scale, SDFR, LRFR, and beginning farmers and ranchers face significant barriers in accessing infrastructure resources. After land, the purchase of farm equipment and infrastructure is the second largest capital investment and remains difficult to get to for small, underserved and beginning farmers with limited cash flow for major purchases. These small-scale farming operations require a greater variety of costly equipment and some high-capital equipment is only used a few times a year. Cooperatively managed equipment sharing can help address these infrastructure barriers and increase farm viability, while supporting implementation of conservation practices and maximizing efficient use of equipment.

The appeal of cutting equipment investment costs has driven the development of standard equipment sharing organizations around the globe. In Sweden, machine rings (equipment sharing groups) started at the beginning of the 1990s and now number 20 local associations with about 5000 members (about 6% of Swedish farmers) - while Germany has about five times that amount of equipment sharing activity. Canadian farmers in Ontario and Saskatchewan have formed numerous machinery cooperatives. However, the US is comparatively far behind. The reason seems to be largely a cultural one: while equipment-sharing has been proven successful elsewhere, there is a persistent impression that tool sharing is unlikely to work or not worth the hassle.

Equipment sharing programs allow farmers to borrow or lease high-value equipment from regional agricultural centers such as fairgrounds, universities, cooperative extension offices, farmer cooperatives, and resource conservation districts (RCD). These programs aim to alleviate the financial burden for farmers, increase on-farm safety, reduce emissions, incentivize conservation practices, and provide necessary resources to producers. There is evidence of successful state-government-run equipment sharing programs in states like the Southern Maryland Agricultural Development Commission equipment sharing and rental program and several of New Hampshire’s County Conservation Districts have equipment rental programs to allow farmers to borrow specialized equipment at a low cost for soil health and nutrient management practices.

This bill hopes to create the RFECR program at DOC to facilitate a competitive grant program. Eligible groups for the grants include, but not limited to RCDs, UC Cooperative Extension offices, Agricultural Commissioners, Tribal Communities & Governments, as well as appropriate non-profit organizations and farmer cooperatives. According to supporters, this bill will support small farm equipment lending programs across the state by funding both existing and new programs to purchase equipment, infrastructure, maintenance, and training, as well as some personnel costs. Furthermore, this program would support essential training for farmers on new and innovative small-farm equipment, equipment maintenance, as well as cooperative development on how to participate and design farmer cooperatives. This bill makes SDFR and LRFR a priority for the equipment sharing program and will work to ensure there is technical assistance to aid in the success of those who use the RFECR program.

REGISTERED SUPPORT / OPPOSITION:

Support

California Climate and Agriculture Network (Sponsor)
Community Alliance With Family Farmers (Sponsor)
California Food and Farming Network

Opposition

None on file

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