Senate Ag Chair Galgiani shares disappointment in CDFA ruling

Senate Ag Chair Galgiani shares disappointment in CDFA ruling

Sen. Cathleen Galgiani (D-Stockton), chairman of the state Senate Agriculture Committee, expressed disappointment in the decision by CDFA Secretary Karen Ross that extended the current temporary price relief for all classes of milk but did not implement the adjustment requested in a petition from dairy producers that was the subject of a Sept. 12 hearing.

galgiani headshot“I thought we had a deal” (on the price increase) said Galgiani in an interview this week with Western United Dairymen.  “I think there was a deal and what happened was when it came down to writing specific language there was not a clear understanding on both sides about what the language meant in regard to economic conditions. There were different views on the definition of economic conditions.”

The Senate Agriculture Committee held a special hearing over the summer and reviewed an arrangement struck between milk producers and cheese processors. The proposal had two basic tenets. First, there would be emergency price relief for up to one year in an amount of no more than $.46 to be assigned to Class 4b milk.  This would have replaced the existing emergency price relief.  Second, the sliding scale used to value whey in the Class 4b formula would be restructured to result in a new ceiling of $1.00 per cwt. contributed to Class 4b, achievable at current market prices.

But when Secretary Ross issued a decision on the petition filed by Western United Dairymen, California Dairies, Inc., Milk Producers Council and California Dairy Campaign, she wrote, “I understand there will be disappointment with this decision in light of the publicity surrounding the perceived agreement between producers and processors during the legislative session. However, the Department was not jointly petitioned by producers and processors – only some producers – and when questioned by the hearing panel, processors responded that there was no agreement.”

Galgiani said, “I’m concerned that we’ve lost so many dairies. The numbers speaks for themselves. We have lost nearly 400 farms in the last five years, a hundred of those in just the last year alone.  I’m hoping for temporary relief that would get our producers through the next year - - that allows for a pricing structure to be shared by both processors and producers. Until that time I’m concerned about ability of our producers to hang on.”

Looking ahead, Galgiani holds out hope for some type of pricing solution. “I’m waiting for some direction as to how the parties involved want to move forward,” she explained. “A large part of the legislation was to ensure that the task force would continue deliberations to come up with recommendations to the legislature for a more permanent fix to the pricing system, I’ll be looking to them to see where they are and how they want to move forward. The Secretary has directed her staff to come up with different proposals for review by December 15 and I believe that deadline was chosen in order to prepare to start discussions again in the first part of January.”

Galgiani pointed out she has worked out a strong bipartisan working relationship with two other key legislators - - Sen. Anthony Cannella (R-Ceres) and Tom Berryhill (R-Modesto). “This bill is an example of how we work together. We have a working relationship built on trust and we all worked with other colleagues on the committee and were able to convince leadership on both sides to have rule waivers and bring the bill to floor on the last day of session. We would not have been able to do that if we did not first trust one another. The leadership trusted that we would bring to them good policy.”

The trios’ reputation has helped them educate their colleagues on dairy industry issues. “Other colleagues are sympathetic but they don’t really understand dairy issues,” noted Galgiani. “They look to me and Canella and Berryhill. They see us as the lead on this issue. It’s something they don’t face in their districts and it’s extremely complicated to understand. They trust our instincts on this issue.”

Governor Brown to date has not been actively engaged in the dairy pricing issue but Galgiani expressed the need for his involvement. “I think he does need to get involved if we are going to protect the rest of the 1,500 remaining dairies. The governor needs to take a look at this and recognize there are extraordinary circumstances that warrant immediate attention and changes to allow our family dairies to continue in business.”

Looking ahead, Galginai remains determined to find a solution. “In the next 6 months I’m optimistic that we will continue to push on behalf of our dairy producers. We need immediate intervention to help our farmers hang on.”

Nov. 8, 2013 WUD Friday Update