Industry Concerned with Proposed Increases for Mill Assessments

The recent budget proposal from Governor Gavin Newsom has raised concern among industry members in relation to mill assessments. California currently assesses a fee of 21 mills or 2.1 cents per dollar of pesticide sales. Governor Newsom has proposed to significantly overhaul the system. A four-year phase-in of a new system for assessments has industry members anxious about how it will impact agriculture. 

Roger Isom, President and CEO of the Western Agricultural Processors Association and California Cotton Ginners and Growers Association stated that they had anticipated there may be some discussions on pesticides. There has been some movement since the new governor took office to look at lower-risk pesticides. The Administration has said the goal is to eliminate the use of pesticides eventually, which obviously is just not realistic. But in this budget, they propose to increase the mill assessment significantly, in some cases more than doubling it in a very short time period. 

The mill assessments are believed to be a tiered based on toxicity levels determined by the U.S. Environmental Protection Agency. Pesticides with the highest hazard designations will have the highest assessment values.  Assessments for some of the higher-tiered materials will be approximately 45 mills in the State. This is going to dissuade growers from using the more toxic chemicals and go towards the softer ones. The problem is, that Administrator demonstrates a lack of knowledge on how the ag industry works with crop protection chemicals and insect control. 

The budget proposal is to be reviewed and debated upon by the state legislature.  Adjusting the flat fee structure of the mill assessment that has been consistent for more than 10 years requires legislative action. The proposed assessment increase is likely to face significant opposition from the agricultural sector. 

If the intended purpose isn’t solved, it might prove to be just increased operating costs and making us less competitive with other states and countries.