Growers say frost protection rules could hurt economy

Sonoma County winegrowers are predicting economic havoc if
proposed new state regulations go into effect next year that would
crimp their use of Russian River water for vineyard frost
protection.
A study released last week shows the proposed new rules “will
severely impact California’s economy and tax base and even damage
the entire nation both financially and socially,” said John Dyson,
owner of Healdsburg’s prestigious Williams Selyem Winery on
Westside Road.
The expense of having to comply with potentially costly new laws
limiting how much — if any — water could be pumped from rivers and
streams to protect crops against frost might actually wipe out some
smaller growers, says the 53-page study that was paid for by
Williams Selyem and authored by Robert Eyler, professor and Chair
of Economics at Sonoma State University and director of the SSU
Center for Regional Economic Analysis.
The new regulations “would cost California jobs, revenues and
land values,” says Eyler’s study on the economic impact of frost
protection regulation in the Russian River watershed.
Under the coming regulations growers who divert water to protect
vineyards against frost might instead have to construct off-stream
storage ponds or use alternative technologies such as wind machines
to keep crops from freezing. The expense of the technological
transition could act as a new tax burden on vineyard farmers
already reeling from the current economic downturn, says Eyler’s
study.
“Most of Sonoma and Mendocino county winegrowers are small
businesses with less than 50 employees,” said Nick Frey, President
of the Sonoma County Winegrape Commission, in a media statement
last week announcing the study’s release.
“This regulation risks putting many of these people out of
business,” said Frey.
California wine industry revenues represent more than $100
billion of California’s economy, “with Sonoma and Mendocino
counties accounting for roughly $25 billion,” according to
California Wine Institute statistics Eyler’s study cited.
“While the impact will be felt dramatically in Sonoma and
Mendocino Counties, all of California will be affected and the wine
business harmed across the nation due to the prominence and size of
the counties’ wine sector,” said Williams Selyem’s Dyson. “This is
a mistake that Sonoma County and California citizens cannot
afford.”
Dyson’s release of the Eyler study coincides with upcoming state
and county hearings over proposed new regulations on the practice
of pumping water out of rivers and tributaries for frost protection
when spawning native fish also need the water to survive.
The National Marine Fisheries Service (NMFS) last year directed
the state Water Board to take “immediate action,” such as
implementing emergency regulations, to address concerns that water
diversions for frost protection “will cause significant salmon
mortality.”
The new regs would restrict diversions from the Russian River,
its tributaries, and interconnected groundwater during the frost
season from March 15 through May 15 unless the diversions “are in
accordance with an approved water demand management program,” says
a state Water Resources Control Board Notice of Preparation of a
frost protection EIR that was also posted last week.
A scoping session on the frost protection EIR is scheduled in
two weeks on Nov. 17 from 3 to 5 p.m. at the North Coast Regional
Water Quality Control Board headquarters in Santa Rosa.
The Sonoma County Board of Supervisors will also hold a hearing
on Dec. 7 regarding a proposed county ordinance governing frost
protection practices that dewater the Russian River or its
tributaries.
Unmonitored pumping by multiple vineyards during a frost has
been shown to dewater streams and strand fish, including juvenile
salmon and steelhead trout that are on the federal Endangered
Species Act list as being threatened or endangered with
extinction.
Fish kills were reported during the last two years when
springtime frost protection efforts stranded fish in Felta Creek, a
Russian River tributary near Healdsburg and in the Russian River
near Hopland in Mendocino County.
Word of Eyler’s study was met with skepticism by state
regulators and river environmental advocates who say it’s more wine
industry propaganda than objective research.
“These are the kind of games they’re going to play, said Jerry
Bernhaut, an attorney for Northern California River Watch, one of
three groups who last year threatened to sue the state Water Board
for violating the Endangered Species Act by allowing stream
diversions for frost control to continue.
But grapegrowers say the new regulations are overkill and an
warranted burden on growers who have pledged to do or are already
doing a better job of coordinating water diversions to maintain
adequate streamflows to support native fish.
A Russian River Frost Protection Group made up of wine industry
representatives fisheries advocates, and Water Board members have
been meeting this year to look for acceptable voluntary procedures
that would provide growers with crop protection and prevent
dewatering streams where anadromous native fish are present.
The stakeholder groups appeared to be reaching an accord that
included offstream storage, flow monitoring, water conservation and
alternative technologies to ensure frost protection and protect
fish habitat when spring frost events occur.
But last week’s study seemed to suggest that at least for now
all bets are off.
The report concludes that the regulation banning most diversions
unless growers have an approved water demand management program in
place could result in “significant loss of business income, loss of
state and local taxes and loss of land values costing the
California economy more than $2 billion annually, including $142
million in lost tax revenue to local governments and Sacramento,
$113 million in decreased land values and more than 8,000 jobs lost
in Sonoma and Mendocino counties,” said last week’s media
announcement.
“Income would be lost due to reduced tonnage from frost damage,
which will result in fewer employees and decreased wages across the
distribution chain of California’s wine industry,” said the media
release prepared by the wine industry public relations firm Big
Bang Communications.
“Wealth would also be lost due to changing land values and a
reduction in capital investments for items such as vines,
rootstocks, irrigation infrastructure and all farming and
winemaking equipment.
“In addition to the negative impact on vineyards, the regulation
would have long-term effects on allied industries such as glass
companies, barrel coopers, trucking firms, docks, vineyard
nurseries, hotels, restaurants and grocery stores. Tourism losses
would include over 6200 jobs and local taxes worth over $9.7
million dollars alone,” says the study.
“An estimated $142 million annually in local and state tax
revenue would be lost due to this regulation.”
In addition to the taxes and fees generated throughout the
production and distribution channels, “wine also accounts for a
significant amount of tourism that comes to California resulting in
lost transient occupancy taxes (TOT) and sales taxes, says Eyler’s
study.
The report estimates over $113 million in lost land values over
the next five years in Sonoma and Mendocino counties, “which would
compound the devastating effects of the current recession,”
according to the study.
“The industry wants to work with local officials and
environmentalists to do self-monitoring and find a happy medium
where a big part of our local economy is not hurt while the Russian
River remains a vital place for fish,” said Eyler in an e-mail last
week.
Asked via e-mail whether there could be potential economic
damage to the wine industry if alienated consumers see wine growers
as unfriendly to fish, “Consumers should not view farmers as not
fish-friendly,” said Eyler, “so I do not see that as an issue.”