The 2017-18 Budget

California Department of Food and Agriculture

The California Department of Food and Agriculture (CDFA) is charged with protecting and promoting agriculture. The department manages programs in the areas of (1) animal health and food safety, (2) crop inspection, (3) agricultural marketing, (4) enforcement of weights and measures laws and regulations for various commodities and goods, and (5) plant health and pest prevention. Many of the department’s activities are conducted in partnership with county agricultural commissioners and county sealers of weights and measures.

The Governor’s budget proposes $387 million from various funds for support of CDFA in 2017-18. This is a net decrease of $63 million (or 14 percent) from the estimated current-year spending level. This year-over-year decrease in spending is mainly explained by (1) an $89 million decrease in spending from the Greenhouse Gas Reduction Fund—which receives revenue from cap-and-trade allowance auctions—reflecting a shift of these funds from the budgets of state departments to a control section of the state budget, and (2) a $7.4 million decrease in General Fund spending (mainly due to one-time funding of $11 million to support fair and county agricultural activities provided in the current year). These decreases are partially offset by increased spending of $20 million in the Marijuana Control Fund and $11 million in federal funds. (For an analysis of CDFA’s budget proposal to regulate cannabis, see our report The 2017-18 Budget: The Governor’s Cannabis Proposals.)

Plant Health and Pest Prevention System

LAO Bottom Line. The Governor’s budget proposes an augmentation of $4.4 million in 2017-18 for the plant pest prevention system. The proposal includes 190.5 permanent positions (25.5 new positions and 165 positions shifted from temporary to permanent status) in 2017-18. We recommend the Legislature approve a total of $3.4 million and 108.5 positions of the requested resources. This would include approval of the 25.5 new permanent positions. However, we recommend approving only half of the positions requested to be shifted from temporary status. We further recommend the Legislature require the department to report at budget hearings on the need for new office facilities to house the additional staff requested under the Governor’s proposal, as well as the estimated cost of the greenhouse structures that might be needed in order to implement the Governor’s proposed biocontrol program.

Background

California Is a Major Agricultural Producer. In 2015, California’s farms and ranches received $47 billion for their output, and the state exported almost $21 billion worth of its agricultural production. California was the leading state in the nation in terms of cash farm receipts with combined commodities representing nearly 13 percent of total U.S. production. California’s leading crops in 2015 were fruits, nuts, and vegetables. Over one-third of the nation’s vegetables and two-thirds of its fruits and nuts are grown in California. The state is also a major port of entry for agricultural products imported from other countries. After these agricultural imports are inspected, they are distributed within California or shipped to other states for consumers to purchase.

California Partners With Federal and Local Agencies on Pest Prevention. State law requires CDFA to prevent the introduction and spread of injurious insects or animal pests, plant diseases, and noxious weeds. CDFA works in partnership with many government and private organizations to implement the state’s pest prevention system because invasive species concerns cut across many different jurisdictions. The U.S. Customs and Border Protection staff perform the initial inspections of vessels, aircraft, cargo, and baggage arriving from foreign locations to prevent the entry of exotic (non-native to a region) invasive pests into the country. The U.S. Department of Agriculture focuses its pest prevention efforts on pests of nationwide concern and preventing pests from entering from foreign countries. CDFA’s Plant Health and Pest Prevention Services (PHPPS) division and county agricultural commissioners focus on state and local pest prevention efforts. Agricultural industry groups primarily focus on pests of concern to a specific commodity group. For example, in recent years the citrus industry has provided funding for the state’s efforts to detect and eradicate Asian Citrus Psyllid (ACP), which is the vector for Huanglongbing (HLB), a disease fatal to citrus trees.

PHPPS Division Protects Agricultural Crops and Ornamental and Native Plants. The division investigates the existence of pests, determines the probability of its spread, and determines the feasibility of its control or eradication. The division may establish, maintain, and enforce quarantines, eradication efforts, and other measures to protect the agricultural industry and other plants from the introduction and spread of exotic pests. There are three branches and one center within the division that implement key elements of the state’s pest prevention, detection, and eradication efforts. They are the (1) Pest Exclusion Branch, (2) Pest Detection and Emergency Projects Branch, (3) Integrated Pest Control Branch, and (4) Plant Pest Diagnostics Center. Some of the elements of the division’s comprehensive plant health and pest prevention program include:

• Exclusion. The Pest Exclusion Branch prevents pest introduction into California by inspecting private and commercial vehicles and personal watercraft entering California from other states. This branch also prevents pest introduction at points of entry located within the state, such as airports and facilities where parcels arrive from out of state. The Pest Exclusion Branch responds rapidly to contain the spread of recently introduced pests, including placing areas under quarantine. When an area is initially placed under quarantine, the branch issues compliance agreements, which set certain requirements for regulated entities, such as nurseries, growers, transporters, and fruit sellers. After the initial response is concluded, the branch performs ongoing oversight inspections throughout the duration of the quarantine to ensure regulated entities continue to fulfill their obligations under compliance agreements.

• Detection and Eradication. The Pest Detection and Emergency Projects Branch relies on a variety of trapping and visual survey programs to detect invasive pests early enough to be able to eradicate them before they become established. For example, the branch deploys a network of over 100,000 traps statewide for targeted pests such as exotic fruit flies. Once a pest infestation is detected, it is the responsibility of the branch to determine its limits or boundaries. The branch may take a variety of actions to eradicate pest infestations. For example, it may take measures to eliminate the breeding grounds of pests or apply pesticides.

• Identification. The Plant Pest Diagnostic Center supports other elements of the pest prevention system through timely and accurate identification of exotic pests and plant diseases. This allows the Pest Exclusion Branch and the Pest Detection and Emergency Projects Branch to rapidly implement measures to exclude and eradicate pests. Samples are submitted to a plant pest diagnostics center laboratory for identification after they are intercepted at the state borders, trapped as part of pest detection efforts, or obtained through other means. In addition, agricultural exporters submit samples to the laboratory to comply with international trade requirements and obtain documentation necessary to export their crops.

• Control. The control element is the last line of defense for established invasive pests, plant diseases, and noxious weeds that cannot be eradicated. The goal of a biological control program is to limit the further spread of the pest, plant disease, or noxious weed to an acceptable level. For example, biological control uses a pest’s or invasive species’ own enemies against them. These biological control agents can be bacteria, fungi, parasites, or predatory organisms, such as insects.

Mix of Permanent and Temporary Staff Carry Out Pest Prevention and Plant Health Activities. In 2016-17, the PHPPS division has 737 authorized permanent positions, of which693 positions (94 percent) are filled. The division also has $8.7 million that it uses to fill about 300 temporary help positions. Historically, the division has used these Temporary Authorization Utilization (TAU) appointments to meet seasonal workload demands.

Under state law, TAU appointments are limited to working a maximum of 194 working days (about 9 months) within a 12-month period. Once a TAU has worked 194 days, they are separated from state service and cannot return to work until they have a three-month break in service. According to CDFA, the average salary for the TAU appointments is comparable to the permanent Pest Prevention Assistant (PPA) classification. The biggest difference in cost between a TAU appointment and a permanent PPA position is for health insurance. While the TAU appointment generally does not receive health benefits, a permanent PPA position has health, dental, and vision costs averaging $597 per month.

Governor’s Proposal

As shown in Figure 1, the Governor’s budget proposes a total of $4.4 million ($1.8 million General Fund and $2.6 million in Department of Food and Agriculture Fund) in 2017-18 to fortify the plant pest prevention system. The proposal includes 190.5 permanent positions in 2017-18. Figure 1 also shows how the funding level is proposed to increase to $5.4 million ($1.9 million General Fund, $2.9 million in Department of Food and Agriculture Fund, and $570,000 in reimbursements), and positions are proposed to increase to 194 in 2018-19. We describe how the funding and positions would be distributed across the branches of the PHPPS division in more detail below.

Plant Health and Pest Prevention Functions. The budget requests $2.4 million and 25.5 positions in 2017-18, increasing to $3.5 million and 29 positions in 2018-19, for various purposes: (1) 5 positions in the Pest Exclusion Branch to improve initial emergency quarantine response activities and increase ongoing oversight inspection levels, (2) 10 positions in the Pest Detection and Emergency Projects Branch to provide oversight of detection and eradication activities, (3) 2 positions in the Plant Pest Diagnostics Center to address the steadily increasing number of requests for identification and testing of samples submitted to the laboratory, (4) 3.5 positions in 2017-18 (growing to 7 positions in 2018-19) to create a biological control program, and (5) 5 human resources administrative positions.

Pest Detection and Eradication Work Currently Performed by TAU Appointees. The budget requests 165 new permanent PPA positions to do work that is currently done by TAU appointees. These positions would be funded by (1) shifting $5.1 million currently used to pay TAUs and (2) $2 million in additional funding (decreasing to $1.9 million in 2018-19). The additional funding requested would mainly cover the higher salary and health benefits costs associated with full-time employees as compared to TAUs. This would leave roughly $3.6 million to fund TAU appointees to do seasonal work in 2017-18.

The administration requests shifting these positions from temporary to permanent in order to reduce the time and costs it takes to hire and train new staff, which occurs because of the state’s limit on how many days a temporary employee can work in a 12-month period. According to CDFA, it can sometimes take up to two to three months to train a TAU appointee. Because the work performed by the TAU appointees is sometimes ongoing, CDFA reports it is continuously advertising, interviewing, hiring, and training TAUs, only to separate the employee from state service after they have worked 194 days within a 12-month period.

Future Facilities Costs. The Governor’s proposal also states that the increase of staffing could require one or two new satellite facilities throughout the state, and CDFA may initiate leases in July 2017. However, no funding was requested for this purpose. The estimated annual cost of the satellite facilities is $40,000 to $60,000 per office. In addition, the establishment of the biological control program might create a need for the state to lease a greenhouse structure to provide an adequate supply of plants for the mass rearing of insects. The lease costs for the greenhouse are not included in the proposal.

LAO Assessment

PHPPS Division Workload Has Increased Over the Past Five Years. We find that there has been a significant increase in workload in the PHPPS division that justifies the administration’s request for the 25.5 additional positions. Below, we assess how the workload for branches within the PHPPS division has increased over the past five years.

• Increases in Quarantine Compliance Agreements—Pest Exclusion Branch. Between 2011 and 2015, there has been an increase in the number of certain quarantine compliance agreements. Specifically, fruit fly quarantine compliance agreements have increased from 539 in 2011 to around 2,285 in 2015. Similarly, ACP quarantine compliance agreements have increased from about 9,854 in 2011 to around 13,078 in 2015. Currently, the exclusion branch is only able to conduct oversight inspections of about 1 percent of all compliance agreement holders.

• Detection and Eradication—Pest Detection and Emergency Projects Branch. In recent years, pest eradications have increased. For example, between 2012-13 and 2015-16 the number of annual eradications increased from 9 to 15, in part due to the detection of HLB, which was first detected in California in 2012 in Hacienda Heights, and subsequently detected in San Gabriel in 2015. In order to do detection and eradication work related to ACP/HLB, the division has redirected positions from other areas, resulting in a reduction in activities in some core areas of the PHPPS program. For example, CDFA reports in 2015 that 23 permanent staff were redirected from other activities and spent at least 75 percent of their time on ACP/HLB activities. In addition, TAU appointments have also been used to address ACP/HLB. The division has 77 fully trained staff working under TAU appointments who have spent at least 75 percent of their time on ACP/HLB operations for at least the last five years and worked roughly the maximum amount of time allowable for a TAU appointee.

• Identification—Plant Pest Diagnostics Center Branch. Between 2011 and 2015, the number of total identifications (for botany, entomology, nematology, plant pathology, and seed samples) made by the laboratory roughly tripled from around 149,900 annually to about 457,000 annually. Total identifications are projected to increase by more than 100,000 identifications per year in 2016 and 2017. According to CDFA, the number of identifications to support exports is becoming an increasingly large percentage of the workload. Trading partners are gradually requiring more specific molecular identification procedures as well as screening for additional pathogens, which is also increasing the workload.

Not All of the 165 New Positions Shifted From TAU Appointees Are Justified. The department has not clearly identified what workload currently performed by TAUs is in fact permanent and ongoing rather than seasonal or temporary in response to an immediate pest problem. Instead, we find that CDFA has only provided workload data to support the establishment of about half of the 165 proposed new permanent PPA positions requested. This is because that number of positions has been utilized for a nearly continuous basis on the same activities. Specifically, CDFA reports that there are 77 seasonal staff who have worked at least 75 percent of their time on ACP/HLB detection and eradication operations for at least the past five years, and who worked roughly the maximum amount of time allowable for a TAU appointee. In our view, it makes sense to shift the bulk of these TAU appointees to permanent positions to utilize their expertise in order to meet the increasing workload demands of responding to ACP/HLB.

In addition, we note that there are trade-offs to shifting too many positions from temporary to permanent status. In particular, temporary positions provide flexibility for the department to respond to what is inherent uncertainty in the amount of workload the division will have from year to year because of the unpredictability of when and where pests will be detected, as well as what options the department will employ to eradicate pests. Accordingly, in our view it makes sense to continue to retain the flexibility provided by using TAU appointees to meet the PHPPS division’s seasonal workload.

LAO Recommendation

Approve Part of the Governor’s Request to Fortify the Plant Pest Prevention System. We recommend the Legislature modify the Governor’s request as follows:

• Approve Funding for Plant Health and Pest Prevention Functions. This would provide $2.4 million and 25.5 new permanent positions in 2017-18 (growing to $3.5 million and 29 positions in 2018-19) for various plant health and pest prevention functions.
• Reduce Funding to Shift From Temporary to Permanent Positions. We recommend approving half of the Governor’s proposal to shift from temporary to permanent positions in 2017-18. This would provide $1 million (decreasing to $935,000 in 2018-19) and 83 new permanent positions. This approach would allow the department to permanently hire some seasonal staff who have developed technical expertise by working for several years—and up to the maximum amount of time allowed for TAU appointees—on certain pest detection and eradication efforts. However, it would also leave $6.1 million for the department to utilize temporary staff to meet seasonal and temporary workload demand. Under our recommendation, in the future, CDFA could complete a more refined analysis of what is the most efficient balance of permanent positions versus TAU appointments and seek additional permanent positions if that is warranted.

Require the Department to Report at Budget Hearings on Need for New Facilities. We recommend the Legislature require the department to report at budget hearings on the need for new office facilities to house the additional staff requested under the Governor’s proposal to fortify the plant health and pest prevention system. In addition, the Governor’s budget proposal indicates that the proposed biological control program may require additional leased space for greenhouse structures and the administration may initiate leases in October 2017. Accordingly, we further recommend the Legislature require the department to report at budget hearings on the estimated cost of the greenhouse structures that might be needed in order to implement the Governor’s proposed biocontrol program.