Farmers slammed by 1,366% spike in regulatory costs
Briana Mathaw
SALINAS, Calif. (KION) –State and federal regulations continue to tighten around California farms, and in the Salinas Valley, that pressure is building fast.
One study out of Cal Poly found that regulatory costs have risen over 1,300 percent in the past 18 years. For example, an acre of farmland that cost about $109 to operate in 2006 now costs closer to $1,600 in 2024.
In comparison, total production costs rose only 44 percent during the same time period.
The Cal Poly study tracked one Salinas Valley grower over nearly two decades to understand the long-term financial burden of compliance with California regulations.
It found a staggering 1,366 percent increase in regulatory costs for that grower.
“The final number is 1,366% increase, which is just like astronomical in a what, not even 20-year period. It’s less than 20 years. So yeah, I was definitely shocked,” Jynel Gularte said.
A huge portion of those rising costs comes from labor related regulations.
“Labor, whether it’s the wage requirements, whether it’s health care for our workers, or whether it’s workers compensation. So three of the top four biggest increases have to do with labor,” Jynel Gularte said.
Gularte, who works at Rincon Farm Inc. in the Salinas Valley, said that the rules in California go far beyond what growers in other parts of the country have to deal with.
“You don’t see all of the regulations we face as California farmers everywhere else across the nation. We have seen cost increases over the last 20 years without a doubt, especially in the regulatory sector,” Jynel Gularte said.
She also noted that recent years have been especially difficult.
“These last four years, specifically since 2020, have been some of the most financially challenging times for our farm and our business,” Jynel Gularte said.
The growth in regulation has forced some farms to hire additional staff just to handle compliance related tasks.
“All of this added regulation increases our costs. It increases the amount of time that it takes to comply with all of this. Companies are now having to hire completely separate new positions like mine just to comply with regulations,” Jynel Gularte said.
And while costs are skyrocketing, the price growers get for their crops hasn’t changed much.
“Even though our costs have gone up over 1,300%, the cost of the head of lettuce has not gone up 1,300%. So truly, farmers are totally absorbing this regulatory cost, which is why our margins are getting smaller and smaller every year,” Jynel Gularte said.
Some in the industry feel that the regulatory burden has gone too far and is starting to put the entire agricultural system at risk.
“I would love for these non-elected governor-appointed regulatory agencies to rein back a little bit because it’s not only hurting farmers and other businesses,” Jynel Gularte said.
She also said the impact doesn’t stop at the farm. The ripple effect is hitting the consumers as well.
“It’s very hard to be profitable anymore because we’re trying to balance obviously paying for all these costs, paying our employees, most importantly making sure our work environment is safe for them, but also not making this cost prohibitive for consumers because everyone has to eat,” Jynel Gularte said.
Unless something changes soon, either by easing regulations or adjusting prices, farmers warn more operations could be forced out of business. And that, they say, would affect more than just growers. It could destabilize the entire food chain.