Sunday, August 19, 2012

Legal team reaches out to farmers - Sacramento Bee

Succeeding as a farmer in today's world of complex regulations and global trade takes more than a tractor and hard work. It helps to have a good lawyer.

The increasing complexity of agriculture has created a business opportunity for law firms in Sacramento, an urban center surrounded by one of the world's most productive farming regions.

"We've seen the food, wine and ag industries become impacted by so many new regulations over the past several years that many growers, processors and distributors have approached us, saying they need access to expertise in water rights, air quality law and environmental permitting," said Sacramento attorney Dale Stern.

As part of the boutique Sacramento law firm of Stern, Van Vleck & McCarron, Stern and his colleagues have long worked as legal specialists in the state's food and agriculture industry. In June, they became part of Downey Brand, which bills itself as Sacramento's largest law firm, operating out of high-rise offices on Capitol Mall.

The move was regarded in local legal circles as proof of a growing need for ag-savvy lawyers in California's capital. Downey Brand saw it as rounding out its team, adding food and ag law experience to Downey Brand's longtime expertise in environmental and natural resources law.

"It makes perfect sense," said Downey Brand senior partner Stephen Meyer. "Food and ag is sort of the equivalent of Silicon Valley. It's a major industry in our state, and it continues to grow and become more complex."

Downey Brand's client list includes a veritable who's who of major Golden State farming interests â€" the California Association of Winegrape Growers, the California Grocers Association, the California League of Food Processors and the Association of California Egg Farmers, to name a few.

Out-of-state clients include Omaha, Neb.-based packaged food firm ConAgra Foods Inc. and the Arlington, Va.-based National Grocers Association.

Stern says Downey Brand now has virtually every angle of food and ag covered â€" farmers, ranchers, suppliers, packers, processors, grocery stores and even client California Shopping Cart Retrieval Corp.

Ag-specialist lawyers say their growing niche boils down to this: The days when a farmer or rancher could run the family business by just laboring in the fields from sunup to sundown are long gone.

"I would agree that there has been dramatic change … just in the past two decades in the amount of regulatory restrictions that are placed on the land, air and water … also worker safety and heat illness," said Kari Fisher, associate counsel of the Sacramento-based California Farm Bureau Federation. "It can be quite overwhelming while you're also trying to run a farm or ranch at the same time. …

"Farmers have to comply with each one of the regulations, so it helps to have (lawyers) who have the expertise for them to comply."

Stan Van Vleck, now a senior partner at Downey Brand, knows this better than most. His Van Vleck Ranch in Rancho Murieta has been operating for more than 150 years.

"So much has changed in just the last 15 years," Van Vleck said. "When you talk about water rights, pesticide regulations, air issues, permitting … you need a certain level of expertise to get through the regulatory process."

Van Vleck said California land-use issues are now so complex that opening a new field for farming "can be a million-dollar proposition."

Downey Brand partner Jane Luckhardt specializes in areas that have evolved dramatically over the past generation â€" sustainable energy, environment, climate change and endangered species.

Also, getting the ear of state lawmakers and regulators on farm policy cannot be done from the fields, so Downey Brand managing partner Kevin O'Brien said farmers increasingly hire legal specialists to lobby on their behalf â€" a job that for years was handled primarily by in-state, crop-specific associations.

"The industry has become highly specialized," O'Brien noted.

So has the legal industry in general, said John G. Sprankling, a nationally recognized expert on property law and a faculty member of the University of the Pacific's McGeorge School of Law in Sacramento: "Speaking broadly, it is fair to say that in California, as in all states, there is more specialization. The big trend is going away from generalist and toward specialization.

"What Downey Brand is doing, that makes good sense is in this legal climate."

O'Brien, Van Vleck and their colleagues call their work part of "the new agriculture" â€" farmers, ranchers, packers and grocers working on teams that include legal consultants, modern business practices and increasingly complex financing.

Given all this, and the consolidation of some longtime farming operations, passing on the family farm or ranch to sons or daughters requires more than a handshake. Downey Brand's Meyer said careful estate planning also has become a critical area of ag-specific counsel.

California's multibillon-dollar agriculture export industry also offers fertile legal ground.

Chris Crutchfield, president and CEO of Williams-based American Commodity Co., explained that "when we ship rice to anywhere in the world, pretty much every country has its own rules and regulations."

Lawsuits also provide ag lawyers with plenty of work. Earlier this month, for example, California egg producers filed a motion to intervene in a federal lawsuit challenging the validity of Proposition 2, the 2008 California voter-approved law regulating egg-laying hen cages.


FISCAL IMPACT: California tops the nation in cash farm receipts, with some $40 billion in annual revenue. According to the most recent statistics, the state accounted for 16 percent of national receipts for crops and 7 percent of U.S. revenue for livestock and livestock products.

DIVERSITY: California's agricultural industry includes more than 400 commodities. The state produces nearly half of U.S.-grown fruits, nuts and vegetables.


LAND USE: In 2010, the most recent year for complete statistics, 25.4 million acres were devoted to farming and ranching. The average California farm size is 311 acres, compared with 418 acres nationwide.

LAND VALUE: The average value of California farm real estate (including land, buildings and farm dwellings) is $6,700 an acre. Cropland is valued at $9,130 an acre, pasture land at $2,850 an acre.

COUNTIES: With about $4 billion in commodities value, Tulare County edged out Kern County as the top ag revenue-producing county in the most recent statistics on annual production. Rounding out the top 10, in order, are Fresno, Monterey, Merced, Stanislaus, Ventura, San Diego, San Joaquin and Kings counties. Tulare accounts for more than 25 percent of the state's milk and cream production.

EXPORTS: Almonds lead the way at around $2.5 billion, followed by dairy products, wine, walnuts and rice, respectively. California's top five ag export markets, in order, are Canada, the European Union, China/Hong Kong, Japan and Mexico. The annual value of exports to Canada totals about $3 billion.

GOT MILK? California is the nation's dairy leader, receiving about $6 billion annually for milk production. Grapes account for $3.2 billion; shelled almonds account for about $2.8 billion.

GOT WINE? California accounts for 90 percent of the nation's $1 billion-plus annual wine exports and is the world's fourth-largest wine producer behind France, Italy and Spain. Sales of California wine in the United States in 2011 were a record 211.9 million cases. Three of every five bottles of wine sold in the United States are California-made.

Sources: California Farm Bureau Federation, California Department of Food and Agriculture, Wine Institute and Bee research

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Call The Bee's Mark Glover, (916) 321-1184.

• Read more articles by Mark Glover

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