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Ag production slump due to low market values

April 19, 2001|By DARREN SIMON, Staff Writer

While the value of agricultural production was down in Imperial County by 10.5 percent in 2000, county and state agricultural officials say there is hope for recovery.

The problem is it is difficult to predict when the situation will start to improve.

Local and state officials said for three years farmers in the state have been facing low market prices on nearly every crop.

Imperial County Agricultural Commissioner Steve Birdsall, who on Tuesday released the county's annual crop report, said the news is not all bad despite the crop value dropping 10.5 percent in 2000 from the previous year.

In 1999 the crop value topped $1 billion. For 2000 that dropped to $919.6 million.

"There have been some farmers who have had some financial problems and do not farm like they used to," Birdsall said.

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That means acreage upon which higher-value vegetable crops had been grown dropped in 2000. Those crops were replaced by lower-value crops that do not cost farmers as much to grow.

Dave Kranz, spokesman for the California Farm Bureau Federation, said crop reports from counties throughout the state are being released.

He said of the reports he has seen, the numbers are down in varying degrees.

Fresno County, which has the highest agricultural production in the state and nation, had a 4 percent value reduction, to $3.4 billion.

Tulare County, which has the second largest ag production in the state and nation, dropped by only 1 percent in 2000 to about $3 billion.

Kranz said he is unsure where Imperial County ranks for 2000, but he did say in 1999 the county was 11th in the state in ag production. He thinks the county may have ranked 15th in the nation in 1999.

Kranz said what has made the farming slump unusual is the large number of crops that have experienced low market values.

He said in years past, California survived low market prices because the state is among the most diverse in the crops it grows.

"California was more resilient because of the diversity of crops," he said, adding, "That diversity hasn't shielded us as much as it usually does."

Kranz said there are factors at play that are difficult to control. Those factors are that so many markets are down and the cost of production in the state is rising.

"In the short term it is going to be tough. There is not too much indication of a turnaround on either for those factors," he said.

He said California has high regulatory costs, increasing wages and is competing on a worldwide market that includes countries where governments subsidize crops.

He said while the U.S. government does offer some level of subsidies for certain grain crops and for crops such as cotton, it is not on the level of other governments.

In addition, there are moves in the federal government to change such subsidies so aid is only given in emergency situations.

Kranz said farmers in the state need help and the state Farm Bureau is working on legislation to bring about some aid. There is legislation being developed to free California farmers from paying sales tax for the purchase of farm equipment.

California is one of only four states that charges full sales tax for such equipment. All other states either do not charge sales tax or charge less than full sales tax.

Birdsall said regarding Imperial County farmers he cannot predict when the farming industry will start to see market improvements.

He did say he thinks farming in the area can have a positive future.

He said farmers have the benefit of low-cost water, reasonably priced power, good weather and good transportation.

Birdsall added it is important to remember the crop report released is for 2000. He said what the report does not show is a company has started to grow 5,000 acres of cotton in the Imperial Valley after moving from the San Joaquin Valley.

Birdsall said the cattle and feed industries could see upswings from a beef-processing plant in Brawley expected to open in October.

Birdsall added he thinks within two years the Imperial Valley will have one more dairy. He said in other parts of the state, communities are pushing out dairies, while officials in the Valley are actively working to attract dairies.

Local fish farmer George Ray, president of the Imperial County Farm Bureau, said he think farmers in the state need to narrow their focus to meet the demands and better compete in the worldwide market.

"We need to focus on those commodities we do have more control over," Ray said, adding, "We have to identify those commodities."

Staff Writer Darren Simon can be reached at 337-4082.

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