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San Joaquin Valley Regional Economic Summit

Building Prosperity for the Valley Ag Value Chain

FINAL REPORT FOR THE MARCH 29, 2012 SUMMIT

ISSUES, OPPORTUNITIES AND RECOMMENDATIONS



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PLANNING COMMITTEE

Pete Weber–California Partnership for the San Joaquin Valley / Statewide Economic Summit Steering Committee Dr. Glenda Humiston–California Rural Development, U.S. Department of Agriculture

Ryan Jacobsen–Fresno County Farm Bureau Mike Dozier–California Partnership for the San Joaquin Valley

Dr. Anthony Oliveira–Farmer and Professor Trish Kelly–Applied Development Economics

Carol Chandler–Chandler Farms Robert Tse–U.S. Department of Agriculture

Dr. Antonio Avalos–California State University, Fresno Laura Podolsky–Local Government Commission

Judy Corbett–Local Government Commission Pat Ricchiuti–P-R Farms

Kristine Walter–Wheelhouse Strategies, Inc. Stacie Dabbs–California Partnership for the San Joaquin Valley

Darryl Rutherford–Federal Reserve Bank of San Francisco

This work has been underwritten by the following sponsoring organizations

SPECIAL THANKS TO:

Harris Woolf California Almonds California Raisin Marketing Board

Kenneth L. Maddy Institute at California State University, Fresno

Marcia D. Martin Rachel Audino

Angelica Cano Ashley Kennett



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PROLOGUE

California remains an extraordinarily important economy, larger than the national economies of all but seven nations. But the trend lines are concerning. As recently as 2004, California was the 5th largest economy in the world. The state’s unemployment rate for the last two years has been the second highest in the nation. What is perhaps even more significant is that California’s unemployment rate has been higher than the national average every year since 1990, which strongly suggests that California is underachieving its potential.

In 2005, state administration under the leadership of former Secretary of Business, Transportation and Housing Sunne Wright McPeak, convened 17 Economic Vitality Conversations – 12 regional and 5 statewide – which produced a construct of building blocks to generate economic comparative advantage for California.

Several recent reports have validated findings from the Economic Vitality Conversations. The state of California, however, has yet to incorporate these findings into a state economic development strategy. In the August 2011 report “An Economic Growth and Competitiveness Agenda for California,1” prepared by The Brookings Institution and McKinsey Global Institute and under the direction of Lieutenant Governor Gavin Newsom, Mr. Newsom states, “For more than ten years, the state of California has lacked a strategic, statewide economic plan. And in the last decade we have reaped the bitter consequences.”

In September 2011, the Think Long Committee of California released the report “Jobs, Infrastructure and the Economy” based on analysis of 20 years of previous reports and interviews with more than 50 business, government, labor, and academic leaders from across the state’s regions. The report’s recommendations revolved around three themes:

1 All documents referenced in this foreword are available at www.caeconomy.com



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● California is an economy of distinct regions

● Productivity and innovation are key to future growth and prosperity

● Public policy should promote productivity and innovation in both public and private sectors

The California Stewardship Network published “Thriving Regions Lead to a Thriving State: A Shared Agenda for Action.” California Forward issued the report “Growing California’s Regional Economies: An Economic Growth Strategy for the State of California.” The two organizations have joined together to organize California’s first statewide economic summit, to be held on May 11 at the Santa Clara Convention Center.

These reports provide an excellent framework for analyzing both the challenges and opportunities of the California economy; but as each indicates, a statewide economic plan must be developed “from the

regions up.” Globalization has fundamentally changed how we compete. Regions with distinct industry

clusters, specially trained workforces and customized infrastructure are now the foundation for establishment of competitive advantage. All regions will benefit from a statewide strategy that reduces the cost of doing business by rationalizing the state’s complex regulatory process, and all regions will add value to the business climate by investing in innovation, infrastructure and people. However, the specifics for how to accomplish this must be tailored to deliver added competitive advantage to the industry clusters of each region. This is not to suggest that California should be “Balkanized.” It is vitally important that the regional strategies be integrated into a whole; but it all begins with an understanding of what will make each region globally competitive.

That is why the statewide economic summit is being preceded by regional summits in 14 different California regions. For this first of what are expected to be annual economic summits, the eight-county San Joaquin Valley has chosen to focus its attention on the Ag Value Chain for the following three reasons:

First, the Ag Value Chain is a major driver of California’s economy, employing about 2.5 million Californians. California’s agricultural production receipts total $37.5 billion, more than the total GDP of one hundred countries. And that is only production receipts, before including the multiplier as you go up the value chain. Additionally, the Ag Value Chain is a major contributor to California exports ($12.8 billion in 2010); Second, in spite of the significant economic diversification taking place in the San Joaquin Valley, the Ag Value Chain remains the principal economic engine of the region, generating a GDP of $26

billion more than half of California’s Ag Value Chain output; and, Third, contrary to popular perception, the Ag Value Chain offers significant near-term job creation opportunities. While it is true that farm employment will continue to decline as production agriculture continues its history of innovation and mechanization, opportunities for adding value in the chain are substantial. Research conducted by the state’s Centers of Excellence projects that California’s Ag Value Chain could create 182,000 jobs in the next five years. The technological advances of agriculture coupled with the addition of value up the chain means that these will be significantly higher wage jobs than the San Joaquin Valley has historically experienced.



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At a regional summit held in Fresno on March 29th, panels of experts presented recommendations on ways to encourage innovation, support productivity and encourage investment. Topics included the San Joaquin Valley’s infrastructure, workforce and capital needs; how to reduce regulatory burdens; and how to enhance the climate for innovation and entrepreneurship. Some recommendations focused on what the private and public sectors can do at the local level, while others focused on what the state needs to do. An audience of 300 participants then ranked the importance they attached to each of the issues discussed based on the scale shown below.

1 = Not Important

2 = Somewhat Important

3 = Important

4 = Very Important

5 = Highest Importance



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The charts below show the issues ranked most important for state action and those ranked most important for regional action. Valley “champions” have been identified to address each of these actions. Recommendations for state action will be submitted for consideration at the May 11 statewide summit.



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The organizers of the statewide and regional summits are committed to not producing more reports that gather dust on some shelf. The commitment is to action. California is still a remarkable place, with the most innovative people in the world as well as extraordinary geographic and climatological assets. What policy makers must recognize is that decisions resulting in economic growth are made by the private sector based on their self-interest. The most successful economic regions in the world have a critical mass of like industries engaging in similar work. The public sector can assist these regions or impede their progress. These summits are intended to help California determine what policies, strategies and actions must be pursued to support the development of vibrant, globally competitive economic regions that attract investment, create jobs, and return California to its status as the Golden State.



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BACKGROUND: The Ag Value Chain and the San Joaquin Valley

California continues to set the pace for the rest of the nation as the country’s largest agricultural producer and exporter. In 2010, California produced $37.5 billion in farmgate value and exported $12.8 billion (14% of U.S. total agricultural exports)2. The economic impact exceeds $300 billion annually.

Agriculture Value Chain Statewide Economic Impact (2008)

SOURCE: California Center of Excellence, Agriculture Value Chain Scan, June 2011

The San Joaquin Valley produces 56% of the total California farmgate, positioning this region to take full advantage of the opportunities to be had by supporting growth in the farm/food value chain. Furthermore, California is the only state to export many crops – almonds, dates, dried plums, figs, garlic, kiwifruit, olives, pistachios, raisins and walnuts – all products grown in the Valley.3 Every $1 billion increase in agricultural exports produces 8,400 jobs. In addition to its role as an agriculture powerhouse in the international arena, the Valley is a potentially burgeoning market for “locavores”, or those interested in buying locally grown foods. Whether the incentive is freshness, economic development, food safety, food resilience, healthy ecosystems, minimization of carbon footprint, or simply the desire for stronger community, the demand for regional foods is booming.

2 USDA ERS estimate, CDFA has separate state export statistics from the U.C. Agricultural Issues Center

3 California Agriculture Profile http://www.sjvpartnership.org/static_pages.php?static_page_id=91&mn_id=166

SOURCE: 2010 USDA Nat. Ag. Statistics Service

http://www.sjvpartnership.org/static_pages.php?static_page_id=91&mn_id=166



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The increase in demand, however, is not being met. Obstacles to efficient regional distribution are numerous and incredibly complex, with dysfunctional and inefficient logistics, policies, and business operations all along the vertical. Currently, the majority of food travels through a centralized network of a few large‐scale producers, processors, and distributors. While this has been, and continues to be, a very efficient system on many levels, it does not allow California farmers to fully maximize new opportunities as consumers demand more regionally and sustainably produced foods; there is very little physical infrastructure for regional farms to efficiently pack or aggregate their product. Thus, many regional producers attempt to distribute their products directly to customers individually.4 Increasingly, such individualized distribution has reached its limits. Farmers can serve only so many farmers markets. Relying on farmers markets will not enable California to provide all its citizens with access to fresh, healthy, local farm products. While there are individual success stories along the supply chain, businesses, nonprofits and government agencies are still searching for ways to turn isolated achievements into replicable models of high‐volume, regional food systems. The current configurations result in much of the food grown in California being processed, packaged and marketed elsewhere – out of state and in other countries all too often. Bringing much of that value chain activity back to California will help produce jobs for both our urban and rural communities. Recent work done by the California Centers of Excellence5 examines the potential for job growth in this sector.

2011 California Agriculture Employers by Sector

4 Building Regional Produce Supply Chains, August 2011, FarmsReach

5 The California Community Colleges Economic and Workforce Development program is the statewide network for

the delivery of education and training services to businesses, workers, and jobseekers in key growth industries and new technologies. The Centers of Excellence in partnership with business and industry deliver regional workforce research customized for community college decision making and resource development.

Support: Activities related to agriculture including farming, veterinary services, implement manufacturing, irrigation, and technical consulting Production: Process specific to crop, vegetable and animal farming, poultry and egg production, and aquaculture Processing and Packaging: Handling fresh produce for transportation, canning, manufacturing, and viticulture Distribution: Includes logistics and warehousing, sales, and import/export.



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According to the California Centers of Excellence research, the Ag Value Chain accounts for nearly 2.5 million jobs in California. The agriculture support sector is the largest component of the value chain, with almost 1.5 million jobs statewide (59%). Agriculture processing and production are much smaller clusters in the value chain. These clusters combined account for less than 18% of the agriculture jobs statewide while distribution is 24%. In the San Joaquin Valley, support (including contract labor) comprises 42% of the jobs and processing 21%. Production is 28% and distribution is 9%. In general, the Valley shows a lower share of activities that capture value-added. Overall data for the Valley reveals:

- There was a net gain of 32,000 jobs across all industry sectors from 2001 to 2010, for a growth rate of 3.4%.

- In the Ag Value Chain, there was a net gain of about 8,900 jobs, for a 3.2 % growth rate; production had a small gain of 1.2%.

- During the decade, the Ag Value Chain remained fairly steady at about 29% of overall employment.

Of particular interest is the potential to produce 181,740 new jobs across the state within the next five years if we will move toward cooking, processing, packaging, handling, marketing, transporting and distribution of our farm products here in California. About 65% of these jobs will be in our cities– making this a powerful urban/rural partnership opportunity. However, despite the magnitude of agriculture-related value in the San Joaquin Valley, current trends indicate that only about 20,000 of those jobs would be based in the Valley; specific actions to encourage growth of value-added businesses are needed if the San Joaquin Valley wants to capture a larger share of those jobs.

One powerful indicator of regional food systems integration is the regional purchase coefficient (RPC). The RPC for the San Joaquin Valley is the proportion of total demand by consumers in the Valley that is supplied by producers located within the Valley. A large RPC means the Valley experiences less leakages (a sign of stronger regional integration) and thus implies larger employment and income multipliers (since more dollars stay and circulate within the Valley).

SOURCE: California Center of Excellence, Agriculture Value Chain Scan, June 2011



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According to 2010 data, the RPCs for Ag Value Chain sectors in the Valley are:

Support sector 55%

Production sector 51%

Distribution sector 49%

Processing sector 15% These numbers clearly show significant opportunities to achieve stronger regional integration in all sectors of the Ag Value Chain, particularly in the processing sector. The potential is substantial and the rewards are equally sizeable. The more integrated food systems get in the Valley in the future, as indicated by larger RPCs in all sectors of the Ag Value Chain, the larger the potential number of jobs created and the higher the level of income for those employed. Rebuilding efficient regional food systems will not be easy. It will require the combined effort of many players to turn the concept into a logistical reality. Toward this end, in August 2010, FarmsReach hosted the first Regional Produce Supply Chain Convening – a design workshop – to collectively envision and design practical solutions, whether or not they involved technology.6 Participants represented farms, aggregators, food hubs, distributors, and end‐business buyers. Among their recommendations:

Impactful solutions must be systemic; stakeholders should concentrate on core competencies.

Innovation and progress require capital; investment should strategically focus on viable projects.

Most farms want (and need) to focus on farming, not delivering individually to each customer.

Farms need more business acumen; they may need to explore new ownership structures.

Collaborative models between aggregators and distributors need to be found. The more distributors do to serve the needs of their customers seeking regional, sustainable foods, the less other stakeholders will try to work around them.

Inexperienced nonprofit organizations should not be doing distribution.

Government and corporate‐imposed regulations need to be clarified, standardized, and made affordable; scale and actual risk should be taken into account.

The many diverse players which have been in the industry a long time need to keep perspectives open and judgments suspended so progress may be achieved more quickly.

Traceability systems need to be better. In the past several years, total value received by California fruit and vegetable manufacturers has trended upward – partly due to skyrocketing energy costs making local production more cost-effective.7 Efforts to capitalize on this trend will allow the Valley economy to both satisfy consumer demands for locally sourced food and reduce carbon footprints; it offers the strong potential for jobs throughout the Valley and improved access to healthy food for our citizens. It is time to develop the infrastructure, policy and procedures to support a vibrant Valley farm and food value chain.

6 Building Regional Produce Supply Chains, August 2011, FarmsReach, Available at:

http://www.thelunchbox.org/sites/default/files/FR_BuildingRegionalSupplyChains.pdf 7 California Food Processing: A Powerhouse of Value, 2010, The McLean Group



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WORK GROUP RECOMMENDATIONS

WORK GROUP: INFRASTRUCTURE NEEDS (Goods Movement, Water, Broadband, Energy)

Goods Movement

1. Statement of the Issue/Challenge/Opportunity: Goods Movement Transportation Options Goods Movement in the San Joaquin Valley (Valley) is currently dominated by a single transportation mode – trucking. In 2007, of the 450 million tons of goods that moved into, out of, or within the region, more than 85% moved by truck. There are some good reasons for this, and trucks will always be a very important component to goods movement in the Valley. However, it is important to continue to study the potential of expanding other modes in the region – including short haul rail (namely an inland port at Shafter or Crows Landing to the Port of Oakland), access to Class I rail, and increased use of air cargo.

Recommended Regional Actions ● Consolidation Centers

Identify sites for consolidation centers within Valley that will allow better access and connectivity to Class I rail services. CHAMPION: San Joaquin Valley Councils of Governments Regional Policy Council (RPC), regional planning efforts ADVISOR: California Central Valley Economic Development Corporation (CCVEDC)

● Public Private Partnerships Develop plans to invest in non-truck modes (such as short-haul rail and air cargo) within a public-private partnership. This will ensure that plans have been vetted and that there is a business case for developing alternate transportation modes. CHAMPION: RPC, regional planners ADVISOR: CCVEDC

● Leverage of Existing Assets Capitalize on existing assets such as Foreign Trade Zones and investigate potential opportunities for export potential (e.g., Castle airport in Merced for cargo service). CHAMPION: City of Merced

Recommended State Actions ● Short Haul Rail

Proactively manage the opportunity presented by SB 325 to create an entity to oversee short haul rail in the Valley.

CHAMPION: RPC in coordination with Senator Michael Rubio ADVISOR: CCVEDC

● Linkage with Statewide Planning Efforts

Create feedback loop so that projects identified and vetted in regional planning studies are consistent with and included in statewide planning efforts (e.g., the California Statewide Rail Plan). CHAMPION: RPC and Caltrans



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2. Statement of the Issue/Challenge/Opportunity: Regional Corridors The region has several critical goods movement corridors (most notably I-5 and SR-99) that carry the highest volumes of trucks within the Valley. However, there are also many corridors and local roads that, though carrying smaller total volumes of trucks, are still vital to the region’s goods movement. East-West corridors throughout the Valley (including SR 152, SR 58, SR 198 and SR 46) are especially important, as are numerous smaller facilities that connect single industrial sites, farms, agricultural processing centers, or other freight-generating activities to the Statewide and National freight system. It is crucial that all of these corridors are maintained at a level where the safe, efficient movement of goods is possible.

Recommended Regional Actions ● Upgrade SR-99

Upgrade SR-99 fully per the plans identified in the 2009 SR-99 Business Plan and other recent corridor studies. CHAMPION: RPC and Caltrans

● Upgrade Local Connectors and East-West Corridors

Create criteria within the San Joaquin Valley Goods Movement Plan to allow for local connector roads and east west corridors to be evaluated fairly in the project prioritization process. CHAMPION: RPC, ongoing regional planning efforts

Recommended State Actions ● Prioritize Projects Based on Regional Economic Development Priorities

Prioritize improvements to infrastructure based on their ability to support key industries and job/GSP-creating entities rather than just performance measures such as truck volumes / Vehicle-Miles-Traveled (VMT). CHAMPION: RPC and Caltrans

● ITIP Set-Aside for Interregional Connectivity

Advocate for an Interregional Transportation Improvement Program (ITIP) set-aside to help fund projects that address interregional connectivity. CHAMPION: RPC and Caltrans

3. Statement of the Issue/Challenge/Opportunity: Air Quality and Safety Impacts

Goods movement in the San Joaquin Valley results in environmental and safety impacts to communities. Movement of trucks, trains, and airplanes all contribute to the region’s air quality concerns, which has corresponding impacts to air quality and public health concerns. In addition, safety concerns exist around at-grade rail crossings, as well as along some corridors not designed to safely carry high truck traffic. Problems with illegal truck parking also impact communities.



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Recommended Regional Actions ● Air Quality Conformity and Safety Criteria

Build air quality conformity and safety goals into regional planning activities and project prioritization efforts. For example, create criteria within the San Joaquin Valley Goods Movement Plan to allow for the prioritization of projects that improve air quality or mitigate the impacts of goods movement. CHAMPION: RPC, ongoing regional planning efforts

● Freight Integration with Land Use Planning Implement innovative actions at the location and regional level that help to better integrate freight into land use planning. This will help to maximize the benefits of freight land uses (jobs, GDP), as well as minimize the impacts on the Valley’s residents and natural environment. CHAMPION: RPC, ongoing regional planning efforts

Recommended State Actions ● Public Private Partnerships for Truck Parking and Rest Stops

Encourage the state of California to investigate the potential of public-private partnerships to establish adequate parking and truck rest stops on major truck carrying corridors. CHAMPION: Caltrans

● STAA Routing to Improve Access to Goods Movement Centers Create an action plan to ensure that STAA routing is updated to reflect access to growing centers and other goods-movement producing land uses. Involve public-and private-sector planners and stakeholders in this process. CHAMPION: Caltrans

● Incentives for Conversion to Environmentally Sound Practices Advocate for funding sources that create a stronger incentive to convert to cleaner technologies or environmentally-sound practices, and entice industries to use the funding sources. CHAMPION: RPC, State and Federal Agencies, private sector

4. Statement of the Issue/Challenge/Opportunity: Multi-Modal Connectivity to Ports

Many of the Valley’s agricultural and manufacturing products are exported out of the Valley to the Port of Oakland for access to national and international markets. This connectivity is essential to the livelihood of the Valley and should be preserved. In addition, as industries within the San Joaquin Valley strive to move up the value chain in agricultural production, these links to domestic and international markets will become even more crucial.

Recommended Regional Actions ● Port Connectivity

Create criteria within the San Joaquin Valley Goods Movement Plan to allow for port connectivity projects to be evaluated fairly in the project prioritization process. CHAMPION: RPC, ongoing regional planning efforts



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● Public-Private Multi-Modal Projects Work in public-private partnerships to investigate multimodal options to connect to international and domestic markets, in particular as product moves up the value chain. CHAMPION: RPC, ongoing regional planning efforts, private sector.

Recommended State Actions ● Improved Access to State’s Marine Ports

Emphasize the vital and unique nature of the state’s marine ports (including the Port of Oakland and Los Angeles / Long Beach) to connect the U.S. and California market to international markets. Prioritize projects that alleviate connectivity concerns or congestion near these important facilities. CHAMPION: The Port of Oakland

● Funding for Multi-Modal Freight Projects

Investigate and offer increased number of funding sources available for multimodal freight projects- in particular those that are public-private partnerships. CHAMPION: Caltrans

Water

1. Statement of the Issue/Challenge: Water Education A recent poll by the firm Probolsky Research indicated that 78% of Californians do not know what the Sacramento-San Joaquin Delta is8. In Southern California, a staggering 86% of those polled do not know what the Delta is. California residents’ apparent lack of awareness of where their water comes from can be construed as evidence that water is not a high priority for Californians, despite chronic drought and an expanding population. Californians in the Valley and beyond must be educated about the state’s water infrastructure and the impact strategic water management ultimately has on the Ag Value Chain, employment in the San Joaquin Valley, and consumer food prices.

Recommended Regional Actions ● Water Education for Valley Urban Residents

Launch comprehensive campaign to educate residents in urban areas about the connection between water infrastructure, water conservation, and the San Joaquin Valley’s economic livelihood (topics to include: the San Joaquin Valley’s reliance on the Delta, the Valley groundwater basin and their linkages). CHAMPION: Smart Valley Places & Rural Development Center/ Small Communities Network

● Water Education for Valley Rural Residents

Launch comprehensive effort to educate rural residents about water infrastructure and water-wise agricultural practices. CHAMPION: Smart Valley Places & Rural Development Center/ Small Communities Network

8 Probolsky Research LLC | New Poll: California Voters Support Water Bond, but Display Little Knowledge of the Bay

Delta

http://www.probolskyresearch.com/new-poll-california-voters-support-water-bond-but-display-little-knowledge-of-the-bay-delta/





































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Recommended State Actions ● Water Education for Statewide Residents

Commission the Water Education Foundation to cover the major metropolitan areas with education materials on “why it’s important to know where your water comes from”. Re-survey after a blitz; follow with local agency re-distribution of critical information on a planned, regular basis, with the goal of having an informed public that can make rational decisions about the investments needed to sustain the state’s water supplies. CHAMPION: AQUA

2. Statement of the Issue/Challenge/Opportunity: Need for a Comprehensive Water Project to

achieve the co-equal goals of Delta Sustainability and Water Reliability California’s water system was designed for 17 million people. The population is projected to reach 38 million this year, and 50 million by 2040. The Sacramento-San Joaquin Delta, at the convergence of the Sacramento and San Joaquin Rivers, supplies water for 25 million Californians. The Delta is in crisis and the price of waiting to address this issue could be a disaster of unimaginable proportion. Even in the absence of catastrophic failure, major economic damage has been experienced by the state from inadequate means to collect, store and convey water during “wet” El Niño years. The economics of the Ag Value Chain in the San Joaquin Valley are in a chronically threatened condition because of the absence of a reliable, reasonably predictable supply of water. No issue is more important to the economic future of the San Joaquin Valley than a reliable supply of water. Because there is no single action that will “fix” the problem, a comprehensive project plan that strengthens levees, improves floodplain management, improves water circulation and quality, increases storage and conveyance, and provides for the Delta system to function as an integral part of a healthy estuary is critical moving forward.

Recommended Regional Action ● Build Consensus for a Plan that Addresses the Needs of All California Water

Stakeholders. The California Partnership for the San Joaquin Valley has convened discussions between the eight Valley counties and the five Delta Counties (San Joaquin County overlaps the two groups) to build consensus for a solution that meets the needs of all water stakeholders. These discussions are being informed by the ongoing development of the Bay Delta Conservation Plan (BDCP). CHAMPION: Water Work Group of the California Partnership for the San Joaquin Valley, Latino Water Coalition.

Recommended State Actions ● Accelerate the Development and Implementation of a Comprehensive Water Plan as

Proposed by the Delta Vision Blue Ribbon Task Force Urgency must be applied to the development and implementation of a comprehensive water project that achieves the co-equal goals of restoring the Delta ecosystem and ensuring a reliable supply of water for all Californians. CHAMPION: Governor, Legislators, Latino Water Coalition



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3. Statement of the Issue/Challenge/Opportunity: Interim Solutions for Water Reliability and Delta Sustainability Implementation of a comprehensive plan will take years, at least a decade. Interim solutions are available to bridge California to the time when a comprehensive plan is completed. Recommended Regional Action ● Develop Consensus on Priority Projects that Provide Interim Solutions.

Unprecedented cooperation has enabled the eight counties in the San Joaquin Valley and the five Delta Counties) to converge on a set of water projects that will increase through-Delta capacity and reduce reliance on the Delta. This list of projects will be finalized in the spring of 2012. CHAMPION: Water Work Group of the California Partnership for the San Joaquin Valley.

Recommended State Action ● Fund Priority Water Projects that Provide Interim Solutions.

Secure Prop 1E and Prop 84 funding for the list of projects described above. CHAMPION: Valley legislators

4. Statement of the Issue/Challenge/Opportunity: Maximize the Efficiency of Current and Future

Water Supply Systems in the Valley It is vitally important to the future economic competitiveness of the Valley Ag Value Chain that water be an affordable resource. Attainment of water efficiencies is not an option – it is a necessity. Recommended Regional Action ● Development of Regional Water Budgets

The region has initiated a process to develop a 50-year integrated regional water management plan through the use of water budgets (sources and uses). Progress on this project must be accelerated. CHAMPION: Department of Water Resources and International Center for Water Technology

● Maximize Groundwater Storage

The largest and most cost-effective storage reservoir south of the Delta is the San Joaquin Valley water groundwater basin. The region must support institutional, financial and infrastructure investments that support the continued effective development of this resource. CHAMPION: Partnership Water Work Group & Valley Legislators.



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Energy

1. Statement of the Issue/Challenge: High Energy Rates For the last two decades, the San Joaquin Valley has shown average annual unemployment rates ranging from 62% to 153% above the state average. Valley efforts to target new employers or expand existing businesses have been adversely affected by electricity rates that are significantly higher than rates in other California regions and other states9. Food processors are particularly large energy users and rely heavily on electricity for production processes. In Fresno County, food processors rank number 2 among all market segments in total electricity, consuming over $170 million in annual electricity costs (using 2010 data). This has contributed to a condition where, while the Valley continues to be the production agriculture capital of the nation, much of the value added in the Ag Value Chain has moved out of the Valley. There have, in the past, been electricity rates to promote economic development, but their limited discount, complexity and constraints mean none have met with much success.

Recommended Regional Action ● Energy Conservation Grant Program

Working with the utilities serving the Valley, develop an energy conservation grant program, funded out of Public Benefit Charges and federal grant programs, that create incentives for businesses in the Ag Value Chain to implement energy conservation projects. CHAMPION: San Joaquin Valley Clean Energy Organization

Recommended State Action ● California Public Utilities Commission (CPUC) Approval of PG&E Enhanced Economic

Development Rate PG&E, which serves the majority of customers in the San Joaquin Valley, filed an application with the Public Utilities Commission on March 1, 2012 to create an enhanced economic development rate that offers a substantial discount for businesses that locate or expand in the Valley as well as businesses that might otherwise relocate away from the Valley. The rate will be available in all counties with an unemployment rate 125% higher than the state average (22 California counties met this criterion in 2011). Valley stakeholders must urge the CPUC to support PG&E’s request for approval of such a special rate. The CPUC has final say on all utility rates. CHAMPION: City of Fresno, Other Valley Stakeholders

9 The City of Fresno conducted a market analysis in 2011 of cost drivers for food processors in Fresno compared to

other comparative regions in California and in neighboring states. The analysis indicated power costs were as much as 2.4 times higher in Fresno than compared to other areas while other costs remained competitive or lower than other regions.



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Broadband

1. Statement of the Issue/Challenge: Expedite the provision of Broadband access in all areas of

the San Joaquin Valley.

Recommended Regional Actions

● Create San Joaquin Valley Broadband Consortium

Create and support the San Joaquin Valley Broadband Consortium to facilitate the

deployment and utilization of advanced communications services and information

technology throughout the region, including rural communities and farm fields.

CHAMPION: Office of Community and Economic Development, Fresno State.

● Define Projects to Close Valley Broadband Gaps

Identify communities and neighborhoods without affordable connections to delivery of

broadband. Conduct a broadband inventory of necessary and potential projects to further

deployment goals.

CHAMPION: Office of Community and Economic Development, Fresno State.

Recommended State Actions ● Identify barriers to statewide and region-wide deployment. Provide all updated maps and

survey information to anchor institutions, to guide fact-based decision making on

infrastructure projects.

InfrastructureBROADBAND

RURAL WIRELESS BROADBANDNEW AGRICULTURE TECHNOLOGY

PRODUCTION WATER ENERGY

ENVIRONMENT FOOD SAFETY

RURAL TELE-HEALTH / TELE-MEDICINE

DISTANCE LEARNING

TRANSPORTATION & LOGISTICS

PUBLIC SAFETY

DIRECT MARKET ACCESS TO GLOBAL MARKETS

FOUNDATION FOR ECONOMIC GROWTH AND OPPORTUNITY



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2. Statement of the Issue/Challenge: Increase Farm Access to Broadband

There is an urgent need to promote accessibility and utilization of broadband in targeted

underserved and unserved communities and populations on farms. The twin challenges of

water and energy faced by production agriculture, and opportunities to increase yield to meet

global demand, can be met with new agricultural technology; however farm field access to

wireless broadband is needed as the connective platform for the new technology. Farmers do

not have adequate wireless broadband access to utilize new agricultural technology. Wireless

broadband with sufficient data transmission capacity to meet future needs at minimal cost must

be deployed throughout the San Joaquin Valley in order for agriculture to continue to increase

its productivity.


● Improve Wireless Broadband Access in Agricultural Areas

Develop strategies to improve wireless broadband access and capacity in agricultural areas. Work with communications companies, agriculture technology companies and farmers to leverage existing infrastructure and fill in the wireless access gaps. Work with USDA Rural Development, CETF, SJVBC, Fresno SC2 and communications providers to ensure that the wireless broadband network includes rural farms, fields, orchards and forests. Form a clearing house focused on identification of new and more efficient wireless broadband technology for adaptation. CHAMPION: San Joaquin Valley Regional Broadband Consortium

● Integrate with State Plans and Neighboring Regions.

Assist with any state efforts and provide input into the base regional map of broadband

infrastructure availability and costs using existing information. Share plans among

neighboring Regional Consortia as developed.

CHAMPION: San Joaquin Valley Regional Broadband Consortium

Recommended State Actions ● State Policies to Ensure Farm Access to Broadband

CPUC adopt policies to ensure wireless broadband access in the field

● Establish Optimal Wireless Standard for Farm Access Technology Agency and CETF determine the optimal wireless broadband technology standard

● Funding for Expanded Rural Access State seeks funding for expanded rural broadband infrastructure through user fees, or state application for federal NTIA or other rural broadband funds.

● State to Persuade/Incent Private Sector Investment in Rural Broadband. State to persuade California commercial web-based businesses such as Google to invest in rural broadband and to locate their cloud facilities in rural areas of California.



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3. Statement of the Issue/Challenge: Health Care Access in Rural Communities

With current barriers to healthcare access in most of the rural areas, telemedicine and

telehealth technology through broadband must be increased.

Recommended Regional Actions ● Expand Telemedicine/Telehealth

Develop and implement telemedicine / telehealth plan to connect health clinics with

medical centers. Partner with the Partnership's Health and Human Services Work Group

to discuss opportunities to utilize their communication networks to drive this Plan

Component. Work with the California Telehealth Network, CETF, BTH, HHS, providers and

stakeholders to develop a specific plan for implementation of a model project.


4. Statement of the Issue/Challenge: Apply Telehealth/Telemedicine Model to Other Valley

Applications.

Recommended Regional Actions ● Expand Telemedicine/Telehealth Model To Other Valley Applications

Build upon infrastructure for telemedicine and telehealth to promote other applications

for education and economic development to increase access and affordability.


Priority Ranking of Infrastructure Recommendations:



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WORK GROUP: WORKFORCE NEEDS

1. Statement of the Issue/Challenge/Opportunity: Reliable Supply of Ag Production Workers Agriculture needs a steady stream of seasonal labor and skilled workers to meet the needs of growers, producers and other employers, to keep agriculture viable; meet projected growth demand across the value chain, including emerging needs for new skilled labor; and address the growing need to replace retiring skilled workers. While there is an existing workforce of skilled, full-time employees with a unique skill set, many workers are undocumented and there are chronic labor shortages. We need a workable immigration program to ensure a legal, qualified workforce, one that provides flexibility for employers and employees, takes care of workers who are here, and provides a guest worker component to meet the temporary and seasonal needs of farms and processors. The program should be coordinated with recommendations for E-Verify legislation (see Issue 2). In the absence of federal comprehensive immigration reform, legislation has been passed or introduced in a few other states creating state guest worker programs, and several other states have studies or are considering the introduction of such state initiatives. In California, proposed state legislation (M. Perez AB 1544) would establish a program that provides agricultural and service sector businesses a safe and legal way for their currently unauthorized workforce to work in California. Creation of the program would be contingent on California receiving authority from the federal government. The author is seeking to move the dialogue forward.

Recommended Regional Actions ● Guest Worker Program

o Valley leaders should work with the Legislature, including the Valley delegation, on AB 1544 as a vehicle to address the need for a guest worker program with the federal government.

o Valley leaders should coordinate with leaders in other regions to develop the policy recommendations for a legal, qualified work program and work with State officials who in turn should advocate for the policy with the federal government.

o Valley leaders should continue to monitor legislative developments and engage in grassroots advocacy when the call for action is issued by the national coalition working on immigration reform (Ag Coalition for Immigration Reform).

CHAMPION: Nisei Farmers League Recommended State Actions ● Guest Worker Program

The Governor and the Legislature, assisted by the California Department of Food and Agriculture and the Labor and Workforce Development Agency, should advocate for California’s policy position with the President, Secretary of Homeland Security, Secretary of USDA, Secretary of Labor, Senate Judiciary Committee and House Judiciary Committee. CHAMPION: Nisei Farmers League



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2. Statement of the Issue/Challenge/Opportunity: E-Verify Program for Agricultural Workers E-Verify is a voluntary Internet-based free federal program administered by the Department of Homeland Security (along with the Social Security Administration) that some businesses use to verify the legal status, and thus eligibility, of employees being hired. The E-Verification process as currently designed is unworkable for agricultural employers, upstream and downstream. The Nisei Farmers League has documented the unique challenges for agricultural employment, based on the experiences of farmers who have attempted to use the program. They include: user-unfriendly process; hiring done in the field instead of an office; large number of employees hired at one time; technology constraints (lack of high-speed Internet connectivity, computers, etc.). E-Verify federal officials hosted by the Nisei Farmers League agreed that it would be difficult to implement the program in an agricultural setting. The Department of Homeland Security should complete the E-Verify for Agriculture Program they have been developing for two years.

Recommended Regional Actions ● E-Verify Agriculture Program

Valley leaders should coordinate with other regional leaders to work with the California Department of Food and Agriculture and Labor and Workforce Agency to advance support for an E-Verify Agriculture Program, for State advocacy with the federal government. CHAMPION: Nisei Farmers League

Recommended State Actions ● E-Verify Agriculture Program

The Department of Food and Agriculture and the California Secretary of Labor should work with the Governor to request the President, Secretary of Homeland Security, Secretary of USDA, Secretary of Labor, Senate Judiciary Committee and House Judiciary Committee to have the federal government complete an “E-Verify for Agriculture” Program which could be implemented if E-Verify becomes mandatory nationwide. This legislation must be developed in conjunction with Issue #1 above. CHAMPION: Nisei Farmers League

3. Statement of the Issue/Challenge/Opportunity: Middle Skills Training

There are approximately 2.5 million jobs in California in the Ag Value Chain, with more than 800 job titles requiring increasingly high levels of technical skills across the continuum of career pathways. Job growth is projected for almost all sectors within the value chain. However, the Valley has a critical jobs/skills mismatch, especially for the mechanical trades. In spite of high unemployment rates, available jobs are going unfilled because a large number of workers do not have the required basic or technical skills to meet employer demand. The existing workforce faces many barriers to success in employability and educational retraining programs. This problem will worsen as skilled workers in all sectors and at all levels, including farmers, supervisors, and instructors of career technical education retire over the next ten years.



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At the same time, many career technical programs are being lost in high schools, and inadequate resources for higher education institutions do not allow for them to meet the current demand for programs where the curriculum is in place. There is a general lack of awareness regarding the strong potential agriculture offers for career opportunities; the need to develop the next generation of farmers, ranchers, workers and instructors; the need for public-private sector partnership to increase this awareness and guide curriculum and programs that are applicable across the region; and the need for funding to support innovative career technical education and other agriculture-related programs, including those in management, business operations and applied research and development. Reports also have documented the need for the Community Colleges to be more nimble in terms of responding to employer needs. A structure is needed that will fill the pipeline with the right kind of skilled workers and enable the workforce to overcome barriers to employability, including deficiencies in basic skills. It is imperative that employers and educators change practices through partnerships, program redesign and employer recognition of the need to support incumbent workers in the process of gaining new skills. The Valley has several opportunities/assets which can be leveraged to meet both regional and statewide demand for a highly skilled Ag workforce, including new models for education and workforce development. The Central California Community Colleges Committed to Change (C6) consortium is a new federally funded initiative that will focus on redesign of the educational system working with employers in Ag and other areas. The Central California Workforce Collaborative (Valley Workforce Investment Boards - WIBs) is working on state and federally funded regional sector-based strategies, also the focus of the California Central Valley Economic Development Corporation. Fresno State’s Jordan College of Agricultural Sciences and Technology is responsible for producing a significant fraction of college graduates in agricultural fields in the Valley, with other Valley CSU’s contributing to this educational base. Fresno State is conducting a value chain clusters strategy that can help engage employers and facilitate partnerships. Building regional capacity to assess needs, develop effective partnerships, garner new resources and implement programs collaboratively will be the most effective approach to meet the skills gap for new and incumbent workers, especially leveraging the new models underway such as C6. The Valley’s educational institutions also could support the development of a skilled workforce for the Ag Value Chain statewide through expansion of its unique and specialized expertise and resources.

Workforce, education and economic development partners have recently conducted a regional assessment with employers to identify employment and occupational skills needs in high demand areas. That has led to the identification of gaps in existing programs and needed financial resources for program development to meet documented needs. Identified needed skills include: applied mathematics, technical reading and writing, mechanical trades, and training for specialized positions, including emerging areas of strong need, such as water managers and pest control advisors.



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Education/Workforce/Employer Partnerships Planning time is needed to convene work groups of industry and faculty leadership to make the needed curriculum and program redesign that will be used regionally to meet common industry needs and put students to work. C6 education partners will collaborate with industry associations and businesses to develop Employer Partnerships to increase career awareness and educational opportunities for students, parents and faculty through mentoring, industry tours, and business internships (high school and up). The community colleges will work within well-established partnerships with the regional Workforce Investment Boards to develop on-site customized training (through possible contact education or distance education and certificate programs specific to an occupation rather than a 2-4 year degree), with an industry cluster focus. Partners will need to help increase industry awareness of this resource.

Employer Education Activities Education and workforce partners should work more closely with employers on strategies to improve incumbent worker skills, including counting of work credits for learning, employee educational assistance programs, and working with K-12 on scholarships.

Funding Support for Career Technical Programs The C6 partners should and will proactively seek additional funding sources, including banks and foundations, to support collaborative ag-related workforce initiatives. CHAMPION: Central California Community Colleges Committed to Change (C-6); Central California Workforce Collaborative.

Recommended State Actions

The state should recognize the importance of and increase its investment in ag-related career technical programs in the Valley CHAMPION: Central California Community Colleges Committed to Change (C-6); Central California Workforce Collaborative.



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Priority Ranking of Workforce Recommendations:

WORK GROUP: INNOVATION AND ENTREPRENEURSHIP

The opportunity for the United States to take back jobs lost and add new jobs in the agriculture value added sector is being fueled by greater energy efficiency in the United States, the rising Chinese Yuan, the increased standard of living in emerging nations, and an American sentiment at all levels of government to add jobs in the value added sectors of agriculture and manufacturing. A major opportunity is to supply more raw and processed “product” to export and US domestic markets at a competitive price. This requires that we find ways to improve production, processing and delivery efficiencies. The San Joaquin Valley has some unique and crucial comparative advantages for this new paradigm. Facets of this advantage include California's leadership in the knowledge economy, the presence of growing universities, and our shared commitment to improve the lagging fortunes of many in our region. We owe it to the communities of the Valley, and indeed to the nation, to seize this opportunity.

1. Statement of the Issue/Challenge/Opportunity: Identify and Fill the Voids in the Regional Ag Value Added Chain A major opportunity is to supply more “product,” both raw and processed, to export markets at a competitive price. This requires that we find ways to improve production, processing and delivery efficiencies, as well as increase the information content supplied with the products.

Recommended Regional Actions ● Connect technology Solutions to Voids in the Valley Ag Value Chain.

○ Identify all crops and agriculture products produced in the region ○ Identify the voids of production and value added processes in the region ○ Quantify the economic benefits that are being lost from potential value-added

processes that could be feasible if barriers were overcome through new or existing applied technology



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○ Identify the specific innovative techniques and technologies that will assist production and value added agricultural products in the region

○ Utilize a partnership of industry, academia, and regional government agencies to identify innovation deficits in agriculture production and value-added processes in the region.

○ Identify and apply technology solutions from non-agriculture industries to address Ag challenges.

CHAMPION: Tony Oliveira

Recommended State Actions ● Governor’s Office of Business and Economic Development Should Lead Initiative to

Support Regional Innovation. ○ Recognize existing voids in each of the regions of California and seek a statewide

effort to consolidate efforts to overcome existing barriers through the joint cooperation of industry, academia, and government. This cooperative effort could leverage applied technologies to enhance production and the agriculture valued-added processes in California.

○ Facilitate and fund research through universities and colleges to promote sustainable production and value-added innovations and technologies.

○ Utilize a state clearinghouse that gathers recognized challenges and/or barriers to production and value-added processes and seeks and distributes suggested solutions of available applied technologies from the vast array of industries and think tanks involved in innovative solutions.

CHAMPION: Tony Oliveira, GoBiz Office

2. Statement of the Issue/Challenge/Opportunity: Industry and Academic Partnerships. There are both short-term and long-term applications of innovation and technology that can have significant impacts on jobs and economic opportunities for the Valley, California, and far beyond. While California research universities historically have had significant impacts on finding technologies that improve many aspects of the agriculture and manufacturing value-added chains, the process may take longer than some of the more immediate opportunities require. Community colleges have played significant and more immediate roles for the needs of applications of innovation and technology to prepare the regional workforce to attract or maintain value-added businesses. Innovative leaders in agriculture production and manufacturing typically evaluate and adopt new technologies to remain competitive. However, for the larger community of the industry, the adoption of new technology is often delayed due to the costs, and, to a certain extent, a complete understanding of how new technology will improve their bottom line. Overcoming this, and realizing the beneficial effect on a much larger fraction of the regional industry, is a challenge. There is some level of disconnect between the needs of the Valley and the universities and community colleges of California when seeking innovative solutions to increasing the amount of value-added processes within the region.



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Recommended Regional Actions ● Create Industry/Academia Partnerships to Develop Technology Solutions for the Ag

Value Chain ○ Utilizing a partnership of industry, academia, and regional government agencies,

form a task force that recognizes the deficits in innovation in identified production and value-added processes to seek development and application of innovation and technology.

○ Form regional working groups between production agriculture leaders with the universities and community colleges within the region to target industry- identified barriers to adding production and value-added processes.

○ Seek direct investment of industries into university and college projects that are identified that would enhance the value-added process.

○ Form and/or advance regional working relationships between universities and community colleges to solve the needs of industry when the time is critical to solve workforce training, such as time and motion studies, and needed applications of innovative technologies to solve the issues and attract or maintain production and value-added industries.

CHAMPION: Valley Universities and Community Colleges

Recommended State Actions ● Governor’s Economic and Business Development Office Should Help Facilitate

Technology Transfer to Industry o Recognize existing voids in each of the regions of California and seek a statewide

solution to overcome existing barriers through the joint cooperation of industry, academia, and government. This cooperative effort could leverage applied technologies to enhance production and the Ag valued added processes in California.

o Clarify and encourage existing policies that allow investment of industry into college and California university projects where the technological advancements could be privatized and patent rights are adjudicated.

o Utilize a state clearinghouse that gathers challenges and/or barriers to production and value-added processes and serves as a resource for suggested solutions of available applied technologies from the vast array of industries and think tanks involved in innovative solutions.

o Encourage, facilitate, and assist in funding cooperative working groups between regional and statewide partnerships of California universities and community colleges to solve challenges of production and value-added application opportunities.

CHAMPION: California GoBiz Office



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3. Statement of the Issue/Challenge/Opportunity: Finding the Efficiencies of Water and Energy: Much of the opportunity for the value-added to expand both in the domestic and international markets will be driven by the ability to add value through the use of innovative ways to efficiently use energy and water. The Valley economic ecosystem has substantial challenges but also some important advantages relative to value-added processing. It has plentiful energy sources in terms of solar and biomass, a new UC with a distinctive mission that equally weights regional and global impact, and an innovative private sector in the field of energy and water technology.

Recommended Regional Actions ● Establish Technology Prominence in Water and Energy

○ Establish a mechanism to help producers and processors identify needs AND evaluate the potential of existing technologies to mitigate the problem. It would then be critical that their findings be conveyed to those sectors of the industry that would benefit from their work.

○ Leverage the state-of-the-art Water, Energy and Technology Center (WET Center) as a resource to attract new and growing tech-based companies and technologists to the Central Valley. The facility serves as a “front door” to the “BlueTech” industries including water, energy and Ag-tech businesses, resources and consumers.

○ Expand the reach and capacity of the Water and Energy Technology Incubator program – an intense, self-driven, mentor-based business development program designed to accelerate the process from concept to commercialization

○ Maximize the resources and network of the WET Center to support and grow the development of innovative technologies in the Water and Energy fields. The WET Center provides the nexus of a robust and relevant network of private, public and academic spheres as well as housing vigorous testing and research facilities and business support (physical and consultative) needed to test and commercialize products and technologies.

○ Strengthen and expand the BlueTechValley initiative that is identifying, naming and establishing access to the many resources and assets available to support and grow the technologies and commercialize the products necessary to enhance Ag production.

○ Market the BlueTechValley brand to a statewide, national and international audience – promoting the established and unique ecosystem of water and energy innovation and the marketplace it represents.

CHAMPION: Water and Energy Technology (WET) Center

Recommended State Actions ● Support and fund research and incentives to enhance the efficient and sustainable use of

energy and water in all industries of California. Support the iHub program as a network to provide first-hand updates and status reports on the opportunities and needs of the regions.



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4. Statement of the Issue/Challenge/Opportunity: Absence of Efficient Regional Supply Systems As stated in the “background” section of this white paper, there is a significant opportunity to design regional supply systems to supply regional markets, thereby increasing integration and adding value in the chain. Such supply systems should aim to serve local markets as well as geographically proximate markets. For example, there is a significant opportunity for the San Joaquin Valley to meet the demand for freshness in the L.A. market.


Design Efficient Regional Supply Systems Continue to convene farms, aggregators (and food hubs), distributors and end-business to design and implement efficient regional food supply systems.

CHAMPION: USDA Rural Development

Priority Ranking of Innovation and Entrepreneurship Recommendations:

WORK GROUP: REGULATION, SUSTAINABILITY AND AG LAND PRESERVATION

1. Statement of the Issue/Challenge/Opportunity: Need to Rationalize and Streamline Regulation California is the most regulated agricultural state in the union, quite arguably in the world. While those in the agricultural profession understand these regulations are meant for protection of the industry, people and the environment, the massive promulgation of regulations in the last decade has made it very difficult and costly to stay in compliance. In most cases, these agricultural costs cannot be passed on to the end consumer, and they make competition in the global and domestic markets more challenging for California producers. Regulatory protections are necessary, but can reach a saturation point that significantly negates the benefits of regulation if compliance is unattainable. The recommended actions below aim to continue to protect the environment while not harming the economy through streamlining and coordinating of the myriad of California regulations.



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Recommended Regional Actions ● Conditional Use Permits for Dairies

The Conditional Use Permit (CUP) process required by some counties for facilities, particularly dairies, needs to be streamlined and accelerated. Several counties have delays that cost years and many thousands, if not, millions of dollars. CHAMPION: Milk Producers Council

● Diesel Replacement Incentives

Regional, state and federal air quality incentives/funding for diesel replacements need to continue to remain a top priority. CHAMPION: Nisei Farmers League

Recommended State Actions ● Advocacy for Job Creation

The Governor’s Office of Business and Economic Development must be expanded to be a more visible and strong advocate for the business community. CHAMPION: California League of Food Processors

● Economic Impact of Regulation

Many state agency rulemakings are based on little, or no, economic analysis. Initial analysis shows that, if not mitigated, the costs of compliance with AB 32 for the food processing industry will be greater than the profitability of the entire industry. All state and regional agencies should be compelled to conduct rigorous economic analysis of every newly proposed rule. Further, the rules should include “look-back” provisions that require the agency to conduct economic impact analysis several years after the rule was implemented to ascertain the accuracy of the original analysis and whether the rule should be modified to be more cost-effective for the regulated community. CHAMPION: California League of Food Processors

● Transparency and Accountability of Regulatory Boards. Changes must be made to the structure of the State Water Board and Regional Water Boards to make their activities more transparent and accountable. The ex parte rules must be revised to allow more expansive communication with stakeholders. The size, structure and composition of the boards must be revised to make them more responsive and reflective of the needs of the communities. CHAMPION: California League of Food Processors

● Workers Compensation Costs

The workers’ compensation legislative reforms passed from 2002-2004 must be fully protected. High workers’ compensation insurance costs are a factor in the long term viability of businesses in California. California continues to be one of the most expensive states in the country for this coverage, with rates 166 percent higher than the national average. California has seen its workers’ compensation rates trend upward since 2008 as legislators and regulators slowly erode the reforms. CHAMPION: Farm Bureau



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● Groundwater Recharge The California Water Code needs to recognize groundwater recharge as a beneficial use. CHAMPION: Farm Bureau

● Water Transfers

California water transfers between agriculture need to be streamlined so they can be done without impediment. CHAMPION: Farm Bureau

● Urban Water Conservation Urban and environmental water uses must be held to the same high standards for water conservation efforts as agriculture. CHAMPION: Farm Bureau

● Posting and New Hire Requirements

Federal and state agencies should consolidate as many of its required postings and new hire required handouts as possible. The volume of paperwork has become too much. CHAMPION: Nisei Farmers League

● Allocation of California Environmental Fee Agriculture and related industries should not be included in California’s environmental fee. This fee does not provide any direct benefit back to the Valley businesses and farms. (Businesses/organizations in industry groups that use, generate, or store hazardous materials, or that conduct activities related to those materials, must pay California’s environmental fee. The fee is administered by the Department of Toxic Substances Control (DTSC) and provides revenue for site remediation, technology programs, administration, and implementation of cleanup programs.) CHAMPION: Nisei Farmers League

For reference, below is a partial list of agencies a farm/ranch may be required to work with: Federal Government Department of Labor

● Employment Standards Administration ● Wage & Hour Division (Fair Labor Standards Act and Migrant and Seasonal Worker Protection

Act ● Occupational Safety & Health Administration ● H-2A ● Regulations preventing people under age of 18 from working on farms and ranches

Department of Homeland Security

● Immigration & Customs Enforcement ● E-Verify ● I-9 ● Enforcement of immigration laws



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Department of Treasury ● Internal Revenue Service ● Alcohol & Tobacco Tax and Trade Bureau

Department of Transportation Department of Health & Human Services Food & Drug Administration Department of the Interior

● Bureau of Land Management ● Bureau of Reclamation

Army Corps of Engineers Fish & Wildlife Service Department of Agriculture

● Agricultural Marketing Service ● Agricultural Research Service ● Animal & Plant Health Inspection Service ● Farm Service Agency ● Food Safety & Inspection Service ● National Agricultural Statistics Service ● Natural Resources Conservation Service ● Federal Crop Insurance Corporation ● US Forest Service

Department of Commerce National Marine Fisheries Service Equal Employment Opportunity Commission

Environmental Protection Agency

● Air quality ● Pesticide registration and use ● Water quality ● Spill Prevention Control ● Fugitive dust ● Diesel and gasoline emissions

National Labor Relations Board

Social Security Administration/No Match Letter



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State of California Labor & Workforce Development Agency

● Agricultural Labor Relations Board ● Employment Development Department ● Department of Industrial Relations ● Department of Labor Standards Enforcement ● Cal/OSHA ● Division of Workers’ Compensation ● Industrial Welfare Commission ● Economic & Employment Enforcement Coalition

Department of Food & Agriculture

California Department of Public Health

Business, Transportation, & Housing Agency

● Department of Motor Vehicles ● Highway Patrol ● Department of Corporations ● Department of Alcoholic Beverage Control

California Environmental Protection Agency

● Air Resources Board ● Department of Toxic Substances Control ● Integrated Waste Management Board ● Office of Environmental Health Hazard Assessment ● Department of Pesticide Regulation ● State Water Resources Control Board ● Regional Water Quality Control Boards

State & Consumer Services Agency

Department of Fair Employment & Housing

Franchise Tax Board

Natural Resources Agency

● Department of Conservation ● Department of Water Resources ● Department of Fish & Game ● CALFED Bay-Delta Program ● Cal-Fire/Department of Forestry and Fire Protection

Office of the Secretary of State

Office of the Insurance Commissioner

http://www.fire.ca.gov/













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Office of the State Controller

Board of Equalization

High-Speed Rail Authority

Regional San Joaquin Valley Air Pollution Control District

Central Valley Regional Water Quality Control Board

County Office of the Assessor/Recorder

Agricultural Commissioner

Auditor-Controller/Treasurer-Tax Collector

Public Works & Planning

Planning Commission

Agricultural Land Conservation Committee

Water/Irrigation District

Environmental Health Departments

2. Statement of the Issue/Challenge/Opportunity: CEQA Reform The California Environmental Quality Act (CEQA) was passed into law in 1970 to institute a statewide policy of environmental protection. CEQA originally applied to only public projects, but California Supreme Court rulings then expanded CEQA jurisdiction to nearly all projects requiring a public agency approval within California, including those accomplished by private businesses and individuals. After CEQA became law, many other environmental and land use laws have been passed by multiple agencies at the federal, state and local level, creating duplicative and overlapping processes, standards and mitigation requirements that result in lengthy project permitting delays. Additionally, CEQA has been persistently abused by litigants, with CEQA's nominal litigation costs often funded by ad hoc groups with vested interests in preventing or delaying projects for reasons unrelated to environmental protections. In a region of the state with persistent double-digit unemployment, the resulting delays in job-creating projects are intolerable; but the adverse impacts are not felt only in regions of high unemployment -- they are felt throughout the state.

Recommended State Actions Work collaboratively with the broad range of private sector and public agency stakeholders seeking comprehensive CEQA reforms, including:

Reducing the time and cost required to comply with CEQA. Projects that create jobs or achieve other important public policy objectives should be fast-tracked for approval if they comply with the myriad number of federal, state, regional and local environmental protection laws that are now in place - and weren't in place when CEQA was adopted in 1970.



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Eliminating CEQA litigation abuse. Scores of lawsuits are filed by parties that are not motivated by environmental protection, from labor unions to NIMBYs opposing change to economic competitors. CEQA was never intended to be a litigation tool that can be aimed at a project by any party, for any reason.

Avoiding duplicative CEQA review processes. CEQA was intended to require a comprehensive environmental review and mitigation framework which, when completed, allows approved plans and projects to proceed. With the proliferation of discretionary government approvals required for many plans and projects, however, CEQA lawsuit opportunities arise multiple times during the implementation process for approved plans and projects. One project, for example, has been targeted by more than 12 CEQA lawsuits spanning over 20 years - needless to say, the bank owns that project now. CEQA should be reformed to eliminate the need for these duplicative CEQA processes and lawsuit challenge opportunities.

Clarify, Expedite, and Fund Preparation of the Administrative Record for CEQA Cases. Although the Legislature has asked the courts to prioritize disposition of CEQA lawsuits, these lawsuits are completely stalled until the lead agency's administrative record is assembled and filed by the court. CEQA allows petitioners in the lawsuit to prepare the administrative record, but provides no process by which the record must be timely prepared and no consequence for petitioners' delays - resulting in delays of a year or even longer in commencing the superior court process. The preparation of the administrative record is time consuming, expensive, and often used as a means of further delaying a project unnecessarily. Further, plaintiffs have almost no hurdle to getting into court and should have some skin in the game to discourage unnecessary lawsuits. Plaintiffs should be required to pay the lead agency’s reasonable costs of preparing the record in a timely manner. CHAMPION: City of Fresno

3. Statement of the Issue/Challenge: Use CEQA to Evaluate Impacts of Development on

utilization of Prime Agricultural Lands Projects subject to NEPA must evaluate whether a project diminishes the economic viability of communities. Currently under CEQA, agricultural resources are valued as whether the land contains valuable soils, prime classification and other considerations. There is no provision in CEQA for the consideration of how agricultural land conversion impacts the agricultural value chain and local economies. In order for the San Joaquin Valley to continue serving as an effective food supplier to local communities as well as the state, nation and world, a more informed understanding of the underlying economic value of agricultural lands is needed. By evaluating and disclosing the inherent economic and community tradeoffs for agricultural land conversion, local decision makers and the general public can more effectively weigh the consequences of land use decisions.



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Recommended Regional Action ● Preservation of Prime Agricultural Land

Propose an amendment under CEQA legislation that requires lead agencies to evaluate and disclose to the public the economic and community impacts of a project that utilizes prime agricultural lands for purposes other than farming. CHAMPION: Local Government Commission

4. Statement of the Issue/Challenge/Opportunity: Encourage Sustainable Growth.

Preserving farmland is a shared goal across the Valley, yet challenges remain, such as balancing agricultural and urban interests in the face of a growing population, making farmland preservation pencil out for counties and cities, and coordinating growth across jurisdictional boundaries.

Past practices and the lack of a statewide planning framework have traditionally led to cities and

counties competing for development and the associated sales tax revenues. This competition

has led to inefficient growth patterns in the San Joaquin Valley. A balanced approach to growth

must be reached whereby counties no longer leverage adjacency to urban centers, services, and

benefits to draw in development by promising less costly development standards; and whereby

cities recognize the benefit of county services and establish tax-sharing agreements to reflect

the receipt of these benefits.

Local councils of government and Local Agency Formation Commissions (LAFCos) have

increasingly been the focus of state legislation aiming to resolve conflicts with coordinated

regional growth. However, neither entity has land use regulatory authority, which complicates

their ability to direct growth trends. If regional efforts to coordinate growth and preserve

agricultural lands are to have any measure of success, local governments must buy in to and

participate in these efforts.

Recommended Regional Action

Refine requirements for urban growth accommodation that builds upon existing frameworks of planning and local land use determination.

o Establish a primary and secondary sphere of influence boundary as part of a general plan update. The primary sphere of influence boundary shall accommodate planned urban growth as defined by urban type land uses (i.e. residential, commercial, industrial) in city genera plans The secondary sphere of influence boundary shall accommodate planning areas the city has interest in for future growth beyond the typical 20-year general plan life but does not have programs, plans and services in place to administer. Therefore, the land designated in the secondary sphere of influence should remain under county jurisdiction where more comprehensive plans, policies and programs are in place to address rural and agricultural type uses.

o Allow for streamlined master tax-sharing agreement consideration within the primary sphere of influence where the county has adopted “urban fringe” development policies that are agreed to by the relevant city.



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o Require agricultural value chain analysis to evaluate the jobs, supporting industry, and economic loss to surrounding communities when considering city general plan urban land use expansion beyond the existing primary sphere of influence.

CHAMPION: Local Government Commission

5. Statement of Issue/Challenge/Opportunity : Need to Encourage Attractive Infill Development.

California will remain on the competitive edge of agriculture by applying new technology, improved growing methods and irrigation, new value added products, and innovative marketing. Two thirds of workers in the Ag Value Chain will work off the farm and 60% of those will prefer to live in an urban center. These centers promote the social interaction, accessibility, civic life and creativity upon which the New Economy depends. While the majority of San Joaquin Valley town and city centers are in the process of being revitalized, infill development has proven challenging for developers.

Recommended Regional Action ● Adoption of Form-Based Codes

Local adoption of form-based codes for downtowns to provide developers certainty and facilitate more efficient permit processing. CHAMPION: Local Government Commission

Priority Ranking of Regulation, Sustainability and Ag Land Preservation Recommendations:



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WORK GROUP: IMPROVING ACCESS TO CAPITAL The tools needed to improve access to capital range from micro-finance to new bonding authorities as well as new innovations within traditional investment classes (debt, equity, venture capital, etc.). Innovative structures are already being created to accommodate growing demand in the field: Crowd-Funding, Mission-Related Investments, Local Stock Exchanges, Public Benefit Corporations and more – these various activities fall under the term “Impact Investing.” In general, an impact investor seeks to enhance social structure and/or environmental health as well as achieve financial returns. The California Financial Opportunities Roundtable (CalFOR) represents over 90 organizations from throughout the state. This group has explored opportunities to expand impact investing throughout California that are designed to capitalize on increased demand for local/healthy foods, green energy and region-specific industry clusters. These sectors best utilize California’s abundant natural resources, world class institutions and innovative citizens – they offer a foundation for jobs and economic development that will serve all Californians. Although the final report is not yet completed, current recommendations from the working groups cover the entire gamut of actions needed to improve access to capital.

1. Statement of the Issue/Challenge/Opportunity: Expand Traditional Financial Products Options available to investors seeking to benefit locally-owned businesses include community development corporations, banks, and community loan funds. Traditional investment products include loan guarantees, investor-backed CDs, and mutual funds. The focus of this group is to develop strategies to better align available investment capital (supply) with business need (demand) by cultivating local investors and building more efficient intermediation.

Recommended Regional Actions ● Clearinghouse of information on economic development and financing options

An easily accessible and intuitively user-friendly resource should be created and managed that provides comprehensive and accurate information on the economic development related products and services available locally, regionally, statewide and nationally. In order to shelter this resource from the insecurity of politics and public funding, it should be driven, owned and managed by an academic institution or a network of academic institutions, and funded through a restricted endowment, with the principal to remain intact in perpetuity. CHAMPION: CalFOR, San Joaquin Valley Rural Development Center

Recommended State Actions ● Restructure and leverage existing funding sources

The Governor’s Office of Economic Development (GoBiz) should create a working group consisting of the leading financial institutions (traditional and non-traditional), appropriate foundations, and public agencies (local, State and Federal) to review all sources of funds that could be restructured and leveraged in order to finance more economic development activity using the same amount of resources. CHAMPION: CalFOR, Governor



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● Improve standards for calculating standards on community development investments Collaborate with the Department of Insurance, California Organized Investment Network (COIN) Advisory Board, Community Development Financial Institutions (CDFIs) and Economic Development Corporations to craft a mandated minimum standard for community development investments with geographic distribution in alignment with the geographic distribution of premiums. With a more secure mandate, insurance companies must be given the flexibility to be innovative in achieving their investment goals by having a broader definition of qualifying investment, allowing for alternative tax credit scenarios that compensate for increased risk or lower return in high-impact investments, and increasing the number of CDFIs that serve as conduits for COIN investments. CHAMPION: CalFOR, Governor, California Organized Investment Network

● Advocate for a definition of “Rural” that fits California’s needs Aggressively advocate for a better definition of rural that (a) fits California’s needs and realities, and (b) expands the delivery and availability of products and services in a manner that is equitable when compared to other states. This would be accomplished by utilizing the various constituencies that would benefit from a more egalitarian distribution of resources including, but not limited to: financial industry associations, economic development associations, community development associations and the various levels of local, statewide and Federal policy makers. Creating “one voice” out of the typical cacophony of competing interests could prove persuasive enough to enact change. CHAMPION: CalFOR, Governor, Legislature, Smart Valley Places

2. Statement of the Issue/Challenge/Opportunity: Pursue Emerging Funding Structures

Options have recently emerged for investors seeking to benefit locally-owned business by channeling funds through innovative intermediary platforms, such as crowd-funding sites (e.g. Kiva.org), not-for-profit groups (e.g. Slow Money), investment clubs, or local stock exchanges. Education and training is needed to expand knowledge and utilization of these intermediaries. Additionally, Governor Brown should prioritize locally-owned businesses as a policy within actions of GoBiz and all other state departments responsible for economic development. Recommended Regional Actions ● Engage foundation and philanthropic community

Encourage Foundations to make program related investments in non-profit CDFIs and other organizations that serve small businesses CHAMPION: CalFOR, Smart Valley Places, San Joaquin Valley Rural Development Center

Recommended State Actions ● Increase investments to small and micro-business sector

Encourage banks, insurance companies, CalCap and State Loan Guarantee Programs to increase investments in the small and micro-business sector. CHAMPION: CalFOR, Governor

● Support “Crowdfunding” in California law

Facilitate changes in state regulations that encourage crowd-funding similar to changes currently under consideration by Congress. CHAMPION: CalFOR, Governor, Legislature



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3. Statement of the Issue/Challenge/Opportunity: Direct-Investment Options Ways exist for individuals to invest directly in their own business or other local businesses, including preferred stock, self-directed Individual Retirement Accounts, Individual Development Accounts, Direct Public Offerings, Cooperatives, and Employee Stock Ownership Plans (ESOPs). Although these options currently help deliver capital to business activities, improvements are needed.

Recommended Regional Actions ● Expand use of Individual Development Accounts (IDAs)

IDAs are matched savings accounts that can be used for business development or other assets. The “saver” joins a program organized by a sponsor – typically a non-profit organization but sometimes a governmental agency or credit union. The saver participates by attending financial literacy classes and making monthly deposits into a special account. The sponsors typically match the participant’s deposit by a predetermined ratio usually between 1:1 and 1:7. CHAMPION: CalFOR, SBDC, San Joaquin Valley Rural Development Center

● Encourage regional and local foundations, community minded banks or other investors to use bonds to finance local and small Business Investments in bonds are essentially loans made by an investor looking for a relatively low rate of return in exchange for low-risk. Bonds have been an option for non-accredited investors to invest in private companies, financial intermediaries or government economic development programs. New bond funds may be developed to direct funds specifically to support small and/or local businesses. Transactions costs associated with establishing a bond fund are well established and predictable, but can be significant. Actions needed:

○ Assure the bonds are of sufficient quality via guarantees from banks, foundations, government entities or other guarantors.

○ Utilize the newly developed Community Development Financial Institution (CDFI) Bond Fund program of the U.S. Treasury.

○ Facilitate private entity funds to offer private issue bonds; this would require a guarantee by an established entity.

CHAMPION: CalFOR, BALLE Networks, California Endowment

Recommended State Actions ● Encourage utilization of Employee Stock Ownership Plans (ESOPs)

ESOP companies, as a whole and by industry, tend to outperform their non-ESOP counterparts. Today, there are roughly 11,000 ESOP companies and about 11,000,000 employee participants in the United States. One of the key challenges to establishing an ESOP and consummating a transaction is the availability of bank or other forms of financing.

○ Allow employees to have benefits similar to that of 401(K) plans including borrowing against vested interests;

○ Encourage bank credit committees to take into consideration the positive aspects of being an ESOP company, as shown in numerous studies, by making ESOPs an explicit lending criterion along with traditional ones such as cash flows and assets; and



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○ Encourage lenders to focus on ESOP companies and those considering ESOPs in rural communities by creating a loan guarantee program backed by the USDA.

CHAMPION: CalFOR, Labor Groups

● Expand use of Cooperatives as a business structure Cooperatives can vary in their particular purpose but share the fact that they are formed to meet the specific objectives of members and are structured to adapt to members’ changing needs.

○ Cooperatives incorporated under the California Consumer Cooperative Corporations Law generally have a “special” exemption (up to $300 in non-debt securities per member). Pursue an amendment to California Corporations Code Section 25100(r), to raise the cap and to clarify the role of non-patron members.

○ Support activities of the California Center for Cooperative Development to provide direct education, networking opportunities, trainings, webinars and workshops.

○ Support National Cooperative Development Act (HR 3677) to provide funds for low cost technical assistance, new loan programs and training to grow the pool of professional cooperative business developers who can help communities start and expand co-ops.

CHAMPION: CalFOR, California Center for Cooperative Development, Legislature

● Facilitate Direct Public Offerings (DPO) A DPO is like an Initial Public Offering (IPO), except that the company sells its securities directly to the public rather than using an investment bank as an intermediary and there is no limit on the number of unaccredited investors. To do a DPO, a company needs to determine how it will comply with both state and federal securities law; improvements needed include:

○ Quickly implement available exemptions for small offerings in California law when pending legislation is received from Congress, including, but not limited to reduction in filing and suitability requirements for smaller offerings, lower fees and education on DPOs and information on how to do them.

○ Work with a nonprofit organization to set up a platform for secondary trading of DPO securities under federal Alternative Trading System.

○ Adopt a clearer definition of a security and/or provide clear guidance on what is not a security e.g. no-interest loans, gift cards for existing businesses, etc.

CHAMPION: CalFOR, BALLE Networks ● Clarify guidance on California “Friends and Family” securities offering

In California, it is possible to do a private securities offering without a great deal of regulatory compliance work. This offering under Section 25102(f) of the California Securities Code is sometimes called a “friends and family” offering. Clarify guidance on what qualifies as a sufficient preexisting personal or business relationship or sufficient financial experience to meet requirements of this exemption. CHAMPION: CalFOR, BALLE Networks



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4. Statement of the Issue/Challenge/Opportunity: Venture Capital, Angel, and Philanthropic High net worth investors and philanthropic organizations need better connections to business investment opportunities, development of supportive enabling environments, and increased coordinating efforts. A wide range of options are needed to develop an integrated end-to-end strategy for moving capital from large sources to underserved areas and to allocate that capital efficiently as investments in promising new ventures and developing business projects.

Recommended Regional Actions ● Organize an “Invest Local” movement within targeted geographies to efficiently match

affinity investors with investment opportunities Develop a formal organization to sponsor and promote the “Invest Local” initiative within the targeted regions. Partner with SBA, USDA, city and county economic development executives, local banks, chambers of commerce, etc., to conduct a public relations outreach campaign around the Invest local theme,\ and to recruit likely investors and interesting companies/funds.

○ Create/support regional “business plan” competitions or similar mechanisms/events to help connect potential companies with investors

○ Create and maintain a database of investors as well as investment opportunities to facilitate ongoing communication about investment opportunities, success stories, investment trends, economic data, employment opportunities within Invest Local companies, etc.

CHAMPION: CalFOR, BALLE Networks, Smart Valley Places

Recommended State Actions ● Initiate legislation to require CA pension funds to allocate a portion of their Alternative

Investment portfolio to underserved segments of the CA economy Each pension fund should have the ability to select the Qualified Funds into which it chooses to invest or to simply invest into the Master Fund and have the Master Fund manager allocate the Master Fund capital based on such parameters. Investment allocation should be made in a manner which is representative of underserved regions or demographics of California. Establish initial target size for a single Underserved Markets Fund Vehicle and each component investment stage and strategy (Seed, Venture and Private Equity).

○ Establish a CA Underserved Markets Fund of Funds (“Master Fund”) to channel capital from large institutional funds to local investment funds in underserved markets, whether through Pension Fund CTIs, CTC Investors, or other qualified investors. This fund would invest only in Qualified Funds.

○ Create a “Qualified Fund” designation for funds investing primarily or exclusively in underserved areas; such funds would be eligible to receive funds from the Master Fund, or directly from investors.

CHAMPION: CalFOR, Governor, Legislature



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● Create Contingent Tax Credit program to encourage/attract private investment in underserved markets through government leverage, tax incentives, guarantees, etc. Obtain governmental approval to issue contingent tax credits to investors who invest in Qualified Funds within California (modeled after Oklahoma and Utah programs). Investors may invest directly into individual Qualified Funds or into the Master Fund. Investors should be assured a minimum return from Qualified Fund investments or, to the extent they fall short of the minimum returns, tax credits would be issued to the investor in an amount equal to the shortfall. Tax credits would not be due until end of the fund life (approx. 10 years). CHAMPION: CalFOR, Governor, Legislature

5. Statement of the Issue/Challenge/Opportunity: Institutional Investors

Promote participation of institutional investors – including but not limited to public bodies, corporations and philanthropic organizations – in locally-owned California businesses by reducing constraints within the current regulatory environment and developing solutions allowing institutional investors to consider the additional economic activity generated by local investments in all return on investment calculations.

Recommended Regional Actions ● Open procurement processes to expand opportunities for locally-owned businesses

Encourage procurement processes that open up opportunities for local and state-registered small businesses to the fullest extent possible including, but not limited to: unbundling services, requiring sub-contracting with small businesses, restricting competitive bidding for smaller contracts to small businesses, providing additional consideration for small businesses in assessing contractor qualifications, and through providing small business advocacy and outreach. CHAMPION: CalFOR, BALLE Networks, Smart Valley Places

Recommended State Actions ● GoBiz convene key state and federal agencies, and institutional investors to develop

means of leveraging state funds with institutional investments GoBiz convene key stakeholders with expertise in small business lending and agencies with institutional investment knowledge for the purpose of developing proposals to leverage state funds with institutional investment dollars to invest in and support small businesses in California, especially in historically underserved lower-income areas. This meeting would explore ways for public and private resources to better compliment their support of small businesses; among some ideas worth exploring:

○ Review California Mello-Roos laws to identify impediments and better ways to leverage Mello-Roos bonds to support infrastructure-related projects benefiting lower income areas.

○ Engage the California Public Utilities Commission on how power purchase agreements could be better designed to encourage infrastructure development that supports economic opportunities in lower income communities.

○ California Infrastructure and Economic Development Bank meet with the CDFI and nonprofit financial development community to discuss how they could serve as a "master bond issuer" of securities backed by small business loans.

CHAMPION: CalFOR, USDA Rural Development, Governor



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● Establish the California Community Capital Collaborative (Collaborative) to offer a new

frame for attracting institutional capital to fixed income products The Collaborative sponsored funds are comprised of CDFI initiated loans in the areas of small business, health centers and foreclosed residential property. Implementation of the model will require credit enhancements, at both the fund and individual loan levels, which could be provided through existing credit enhancement initiatives by CalPERS, CalSTRS, the State Treasurer and California Capital Access Program and the California Small Business Loan Guarantee Program. CHAMPION: CalFOR, USDA Rural Development, Governor

6. Statement of the Issue/Challenge/Opportunity: Develop Regional Tax-Advantaged Investment

Vehicles Recognizing that much of the average citizen’s personal capital is tied up in tax-advantaged retirement funds, there is opportunity to capitalize on the growing demand to “bring our money home from Wall Street to Main Street” by confronting the issues associated with creating an innovative Regional Tax-Advantaged Investment Vehicle for Non-Accredited investors.

Recommended Regional Actions ● Ease targeting of self-directed IRAs into local investing

Establish / identify a CDFI (or other entity with local investment options) as an approved custodian for Self Directed IRAs (SD-IRA) to reduce fees, streamline process, and create pro-local investment policies. This entity would have to be registered and regulated as a depository or non-depository trust company by the state of California; meet all federal regulatory requirements of a bank or trust company responsible for administering accounts on behalf of the client (SD-IRA owner).

○ Create a pilot project in which the SD-IRA custodian-CDFI hosts events (informational only, in-person or webinar) highlighting rural investment opportunities and SD-IRA basics.

○ Develop (or make available) SD-IRA guide for those interested in supporting local businesses through their investments;

○ Conduct research to identify the territory of the IRA custodian marketplace. CHAMPION: CalFOR, California CDFIs

● Develop California program for impact investing and community loan funds

Work with existing CDFIs to develop program through which local investors who want to make a positive social impact accept a below-market return—typically 0 to 3 percent—in exchange for a social dividend. The spread between the below-market rate and what the CDFI earns on the investments helps to offset operating costs. Utilize existing models, such as the New Hampshire Community Loan Fund and provide a range of investment terms and sizes (e.g. Calvert Foundation Notes). CHAMPION: CalFOR, California CDFIs



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7. Statement of the Issue/Challenge/Opportunity: Business Mentoring and Technical Assistance Financial education and knowledge of best business practices can reduce financial risk to the lender, improve credit worthiness of borrowers and strengthen overall management of an enterprise. Improvements are needed in how technical assistance, training, and mentoring are provided in areas such as: business plans, basic money management, marketing, distribution, etc. Community partners may include Small Business Development Centers, SCORE business counselors, Community Colleges, Adult Education, microenterprise associations and others.

Recommended Regional Actions ● Work with the Small Business Development Centers (SBDC) and SCORE to improve

integration and consistency of all small business technical assistance providers. Many rural areas have other local service providers, such as, workforce development, economic development groups, EDA Districts, chambers of commerce and city organizations providing proactive technical assistance specifically to support local revolving loans. Many areas are more sophisticated in formal business retention programs with consistent and collaborative business outreach and tracking which could become part of the platform. Given the statewide investment, volunteer groups and local investment in small business technical assistance, before instituting another program or platform, review the existing infrastructure to understand how the ecosystem can be more efficient and effective may be worth the time and effort.

○ Inventory existing business assistance programs and service providers. ○ Identify from businesses their current awareness of programs and services as

well as accessibility of those services. ○ Design platforms to better serve rural businesses; focus on how the existing

infrastructure can be organized to better provide service. CHAMPION: CalFOR, SCORE, SBDC

● Create a Collaborative of Community Colleges, Universities, Business Technical Service

Providers, USDA, SBA and other partners to create a series of custom training programs for the training of entrepreneurs in the every aspect of sustainable food business systems and farm/food value chain jobs. The syllabus should be structured around processes in the value chain – instead of isolated functions – be heavy in cases and practical applications, interactive, and modular as well as bilingual. CHAMPION: CalFOR, SBDC, CC Center of Excellence, Central Valley Education Consortium

Recommended State Actions ● Ensure the Small Business Development Centers (SBDC) have adequate match funds to

fully utilize available federal funding. California SBDCs receives approximately $12 million in federal funding from the SBA every year. It is required to match those dollars 1:1, with half in cash and half in-kind. The program currently receives no support from the state government, and raises the cash match by soliciting private sector sponsorships and other contributions. As a result, the funding base is unstable and if the required match is not raise, it can be forced to send money back to Washington, DC.



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○ California SBDC program leadership must actively work with the Brown administration and key legislative leaders to highlight the importance of the program and its impressive job creation and economic impact numbers. Ideally, the state government will invest in the program, resulting in California funding becoming leveraged for valuable technical assistance programs and consulting.

○ With respect to expanding operations to develop programs specific to rural businesses –SBDCs can accept private sector funding in support of programs. Key stakeholders need to be engaged in advocacy, delivery and/or implementation (SBA, USDA, State of California’s GO-Biz, other small business organizations, private sector organizations such as banks, etc.) to help ensure required matching funds.

CHAMPION: CalFOR, SBDC, Governor, Legislature

Priority Ranking of Access to Capital Recommendations:

Set in motion by an executive order in June 2005,* the California Partnership for the San Joaquin Valley is an unprecedented public-private partnership sharply focused on improving the region’s economic vitality and quality of life for the 3.9 million residents who call the San Joaquin Valley home. The Partnership is addressing the challenges of the region by implementing measurable actions on six major initiatives to help the San Joaquin Valley emerge as California’s 21st Century Opportunity.

For more information about the San Joaquin Valley Regional Economic Summit or the work of the Partnership, please visit sjvpartnership.org

*This Executive Order was renewed in November 2006. The Partnership was extended by Executive Order S-17-08 in December 2008. In July 2010, Executive Order S-10-10 extended the Partnership indefinitely and established governance guidelines.

http://www.sjvpartnership.org/uploaded_files/fck/ExecutiveOrderS-5-05.pdf

http://www.sjvpartnership.org/uploaded_files/fck/ExecutiveOrderS2206.pdf

http://www.sjvpartnership.org/uploaded_files/fck/ExecutiveOrderS-17-08.pdf

http://www.sjvpartnership.org/uploaded_files/Doc/ExecutiveOrderS-10-10.pdf

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