[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
SQUEEZED: CURRENT CHALLENGES FOR SMALL
CITRUS OPERATIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 11, 2015
_________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 114-015
Available via the GPO Website: www.fdsys.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
95-079 WASHINGTON : 2015
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
RICHARD HANNA, New York
TIM HUELSKAMP, Kansas
TOM RICE, South Carolina
CHRIS GIBSON, New York
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
CARLOS CURBELO, Florida
MIKE BOST, Illinois
CRESENT HARDY, Nevada
NYDIA VELAZQUEZ, New York, Ranking Member
YVETTE CLARK, New York
JUDY CHU, California
JANICE HAHN, California
DONALD PAYNE, JR., New Jersey
GRACE MENG, New York
BRENDA LAWRENCE, Michigan
ALMA ADAMS, North Carolina
SETH MOULTON, Massachusetts
MARK TAKAI, Hawaii
Kevin Fitzpatrick, Staff Director
Stephen Dennis, Deputy Staff Director for Policy
Jan Oliver, Deputy Staff Director for Operation
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Carlos Curbelo.............................................. 1
Hon. Grace Meng.................................................. 2
WITNESSES
Mr. Kevin Severns, Owner, Severns Farm, Sanger, CA, testifying on
behalf of California Citrus Manual............................. 4
Mr. N. Larry Black, Jr., General Manager, Peace River Packing
Company, Fort Meade, FL, testifying on behalf of Florida Citrus
Mutual......................................................... 6
Mr. Dale Murden, President, Texs Citrus Mutual, Mission, TX...... 7
Dr. Michael Rogers, Interim Director and Associate Professor,
Citrus Research and Education Center, Institute of Food and
Agriculture Sciences, University of Florida, Lake Alfred, FL... 9
APPENDIX
Prepared Statements:
Mr. Kevin Severns, Owner, Severns Farm, Sanger, CA,
testifying on behalf of California Citrus Mutual........... 22
Mr. N. Larry Black, Jr., General Manager, Peace River Packing
Company, Fort Meade, FL, testifying on behalf of Florida
Citrus Mutual.............................................. 32
Mr. Dale Murden, President, Texas Citrus Mutual, Mission, TX. 35
Dr. Michael Rogers, Interim Director and Associate Professor,
Citrus Research and Education Center, Institute of Food and
Agriculture Sciences, University of Florida, Lake Alfred,
FL......................................................... 39
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
SQUEEZED: CURRENT CHALLENGES FOR SMALL CITRUS OPERATIONS
----------
THURSDAY, JUNE 11, 2015
House of Representatives,
Committee on Small Business,
Subcommittee on Agriculture, Energy and Trade,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:02 a.m., in
Room 2360, Rayburn House Office Building, Hon. Carlos Curbelo
[chairman of the Subcommittee] presiding.
Present: Representatives Curbelo and Meng.
Also Present: Representatives Knight and Lawrence.
Chairman Curbelo. Good morning. I call this hearing to
order.
This is my first hearing as chairman of the Subcommittee on
Agricultural, Energy and Trade, and I look forward to working
with Ranking Member Meng on issues of concern to small
businesses.
The United States is one of the top procedures of citrus in
the world. Florida, my home State, is the largest producing
area, followed by California, Texas, and Arizona. Within these
States, citrus is both economically and culturally significant.
It fuels the economy, and for many growers and their families,
it is a way of life passed down from one generation to another.
Citrus is a valuable United States crop. For the 2013 2014
season, its value was $3.39 billion, and a recent University of
Florida study found that the total economic impact of the
citrus industry in the State of Florida for fiscal year 2012/
2013 was $10.68 billion. However, this United States economic
powerhouse is facing significant challenges. The acreage and
production of citrus are down, particularly in Florida, which
is ground zero for a deadly bacterial disease that destroys
citrus trees.
Huanglongbing, which is also referred to as HLB, or citrus
greening, is a devastating citrus disease that has been found
in Florida, Texas, and California. In addition, the insect that
spreads HLB has been found in 15 States and United States
territories. HLB, along with other current challenges, in
particular the Mexican fruit fly in Texas, and the drought in
California, are making it more difficult and costly to produce
citrus. Faced with these challenges, small citrus growers,
which comprise 90 percent of citrus farms and other small
businesses in the citrus industry, are struggling to stay
profitable and to stay in business.
Today we will be hearing from witnesses from Florida,
California, and Texas who will explain how the current
challenges are affecting small citrus growers and other
businesses within the citrus industries in their States. I want
to thank all the witnesses for taking time away from their
businesses and families, and for appearing before the Committee
today.
With that, I yield to the ranking member, Ms. Meng, for her
opening statement.
Ms. Meng. Good morning. I want to thank our Chairman
Curbelo and his team for putting together such an important
hearing. As a member from New York State, with, I am sure, a
high consumption of citrus products, I am very excited to learn
more about how the Federal Government can be of help towards
our small businesses.
Agricultural remains a critical part in our Nation's
economy, supporting more than 16 million jobs nationwide.
American farmers are the best at what they do when given the
opportunity to compete on an even playing field. However, the
challenges farmers face are not limited to factors under their
control. Unpredictable weather conditions and stubborn pests
and disease wreak significant impacts on our producers' bottom
line.
Many parts of the country are still suffering from
persistent drought conditions. Pests and diseases are
continuing to pose significant threats to plants and their
respective industries, as we are witnessing with citrus
greening. However, investments in agriculture research help
mitigate these impacts, both environmentally and economically,
and prepare producers for future adverse conditions. While the
United States may not be the world's largest procedure of
citrus, it plays a substantial role in producing citrus
products sold domestically and abroad. Citrus exports in 2012
alone totaled over $1 billion, and the value of the 2013 to
2014 crop was estimated to be nearly $3.5 billion, proving the
importance the industry plays in creating jobs and growing our
Nation's economy.
But U.S. orange production forecast is down slightly due to
projected production declines in Florida and California. This
trend is largely due to citrus greening, a devastating disease
caused by the Asian Citrus Psyllid. To date, there is no
permanent solution to this horrible infestation that is slowly
spreading across America's citrus groves. The entire citrus
industry has taken a major blow since the disease was first
identified. It has caused a loss of millions of boxes of
oranges and thousands of acres of abandoned and tainted groves.
Citrus greening has taken a particularly hard toll on small
citrus operations as they are more sensitive to the costs of
the infestation. Such costs can include pesticides,
quarantines, fertilizers, and replanting of trees. To make
matters worse, those hardworking farmers face other challenges
corresponding with citrus greening; droughts, freezes,
hurricanes, port labor disputes, and other citrus pests.
The barriers to operating their business have become so
cumbersome and financially burdensome that many smaller
operations are questioning the future of the citrus industry.
In fact, some smaller operations are struggling with the
decision to keep hope alive for the citrus operations or
throwing in the towel and planting new crops or selling land to
developers. These decisions are troubling to many besides just
the growers, as the industry supports jobs in the packing,
trade, and grocery sectors. Because citrus operations generate
jobs not only for themselves but for different sectors of
economy, addressing the challenges facing this industry will
not only keep America producing jobs, but it will also continue
to create jobs and gross domestic products in the future.
Today's hearing will give us the opportunity to learn more
about the citrus industry in general, and what the future holds
for them as we combat pests, disease, and climate issues.
Though this issue is one concerning many stakeholders from
local counties to numerous Federal agencies, we must hear from
the small businesses on the front line of the issue. And today,
we will do just that in hopes of finding ways to assist them in
preserving the future of a quintessential fruit and breakfast
drink. We are here today to learn more about what the Federal
Government is doing to assist your small citrus businesses and
what more is required. In order to ensure the success of our
self-employed, we must understand the challenges facing this
industry.
I thank all the witnesses for being here today, and I look
forward to your comments.
Thank you, Mr. Chairman, and I yield back.
Chairman Curbelo. Thank you, Ms. Meng.
If additional committee members have an opening statement
prepared, I ask that they be submitted for the record.
I would also like to take a moment to explain the timing
lights for you. You will each have 5 minutes to deliver your
testimony. The light will start out as green. When you have 1
minute remaining, the light will turn yellow. And, finally, it
will turn red at the end of your 5 minutes.
I ask that you try to adhere to the time limit.
Our first witness is Kevin Severns, a second-generation
navel orange grower. He is the owner of Severns Farms, a 40-
acre citrus-growing operation in Sanger, California. Mr.
Severns also serves as the general manager of the Orange Cove
Sanger Citrus Association, a cooperative citrus packing house,
and serves on the California Citrus Pest and Disease Prevention
Committee. He is testifying on behalf of California Citrus
Mutual, a trade association that represents California's citrus
growers, and currently serves as the organization's chairman of
the board.
Mr. Severns, thank you for being here today.
Next I am pleased to introduce a fellow Floridian, Larry
Black. He is the general manager of Peace River Packing
Company, a small citrus packing operation in Fort Meade,
Florida, and a fifth-generation Florida citrus grower. Mr.
Black is the current president of Florida Citrus Mutual, a
trade association that represents the Florida citrus industry,
and also serves on the board of the Citrus Research and
Development Foundation. Previously he served as president of
the Polk County Farm Bureau. He is testifying on behalf of
Florida Citrus Mutual.
Mr. Black, thank you very much for being here today.
Our third witness is Dale Murden, the president of Texas
Citrus Mutual, the grower association representing Texas citrus
industry. He also owns and operates a cattle and citrus
operation in the Lower Rio Grande Valley of Texas. This year,
Mr. Murden became president of Texas Citrus Mutual. Previously
he had managed Rio Farms, a unique nonprofit farming and
agriculture operation for 25 years. Mr. Murden also currently
serves as the executive director of Texas Citrus Pest and
Disease Management Association and has a long history of
serving the Texas agriculture industry.
Mr. Murden, thank you very much for being here today.
I now yield to the ranking member for the introduction of
our final witness.
Ms. Meng. It is my pleasure to introduce Dr. Michael
Rogers, the interim center director and associate professor of
entomology and nematology at the University of Florida's Citrus
Research and Education Center. He is a preeminent scholar on
citrus integrated pest management. He received his Ph.D. in
entomology from the University of Kentucky, and his B.S. from
Auburn University.
Welcome, Dr. Rogers.
Chairman Curbelo. We are pleased to have a distinguished
panel of witnesses from the major citrus-producing States, and
look forward to hearing from all of you.
Mr. Severns, you may begin.
STATEMENTS OF KEVIN SEVERNS, OWNER, SEVERNS FARM, ON BEHALF OF
THE CALIFORNIA CITRUS MUTUAL; N. LARRY BLACK, JR., GENERAL
MANAGER, PEACE RIVER PACKING COMPANY, ON BEHALF OF THE FLORIDA
CITRUS MUTUAL; DALE MURDEN, PRESIDENT, TEXAS CITRUS MUTUAL; AND
MICHAEL ROGERS, INTERIM DIRECTOR AND ASSOCIATE PROFESSOR,
CITRUS RESEARCH AND EDUCATION CENTER, INSTITUTE OF FOOD AND
AGRICULTURAL SCIENCES, UNIVERSITY OF FLORIDA
STATEMENT OF KEVIN SEVERNS
Mr. Severns. Chairman Curbelo and Ranking Member Meng,
thank you for the opportunity to testify today on the
challenges that small citrus growers such as myself are facing.
Defining a small citrus grower is not easy. Years ago, a
40-acre citrus grower could make a reasonably good living.
Today it probably takes 300 acres or more to stay in business
farming citrus. Fifty years ago, growers did not have to deal
with issues like good agricultural practices, GAAP audits, in
other words, use reports, employee safety training, farm
equipment emission certifications, and such as that. Today it
is just part of the normal operations. Outside help and
consultation is required, and it is not free. Please consider
that California supplies 85 percent of the United States' fresh
citrus, and has done so for nearly 150 years.
Today we have about 3,500 growers, about 100 packing
houses, and probably 12,000 or more employees that work nearly
year round. We sell citrus in 50 States and many countries
worldwide. The major citrus-producing States represented here
do what the other States cannot. We produce citrus fruits for
the rest of the Nation and the world on a year-round basis. We
must keep this vibrant industry healthy.
Not very long ago, California had 285,000 total acres. That
number is more like 270,000 today, with more scheduled to be
bulldozed this summer. The number of small citrus growers is
significantly declining in California. It would appear that the
small-scale citrus growers, and in a parallel sense, all citrus
growers, might have a place on their own endangered species
list. We have to consider the possibility of no more U.S.
citrus. We need to ask ourselves: Do we want a citrus industry?
U.S.-grown citrus has a superb record as a healthy, safe,
nutritious, and affordable product. Yet it could easily
disappear from our store shelves. Invasive pests and diseases,
drought, and misguided water policy, international trade
issues, and the convergence of all of these have brought our
industry into perilous times.
In California, we have watched Florida's decline in
production due to huanglongbing, or HLB. For a citrus tree, HLB
is a death sentence. In California we have the bug, the Asian
Citrus Psyllid, what we refer to as the ACP, that spreads HLB,
but so far no HLB. The task before us is to keep the ACP away
from potentially infectious trees, and also to remove those
trees before HLB can gain a foothold.
Through our industry-funded surveys, we found a single tree
in southern California that tested positive for HLB. That tree
was removed, and all citrus nearby continues to test negative
for HLB. That tree had been grafted by a hobby gardener with
illegally transported bud wood cut from an HLB-infected tree
overseas. Such actions could easily destroy a $2.4 billion
industry. And that is just in California.
We have appealed to residential citrus tree owners to work
with us in watching for ACP and the disease. Controlling the
ACP has been a challenge in the Los Angeles Basin. Most
backyards in the area have citrus trees growing in them. San
Joaquin Valley and the northern citrus-producing counties have
had to deal with occasional small populations of ACP detections
in some citrus groves. Growers are aggressive about treating
detections, but doing is expensive.
Citrus trees can be infected with HLB for 2 or 3 years
before beginning to decline. By quickly removing any tree that
tests positive for HLB, we may buy time to give the industry
researchers an opportunity to find a solution to the disease.
In September of 2011, the California Citrus Pest and
Disease Prevention Committee, CPDPC, was formed to implement
statewide suppression and eradication efforts. For the program,
all California growers are assessed for every 40-pound carton
produced. Over the past 5-plus years, $15 million has been
collected annually to pay for the work of the CPDPC. The
California Department of Food and Agriculture performs
regulatory work trapping, testing, and treatment programs
across the State on our behalf.
Jumping ahead to water, the drought and the water situation
in California is beyond critical. While the lack of normal
rainfall are disastrous, so are the misguided environmental
policies affecting our State. Some growers are going into their
second year of zero allocation of surface water. If available,
the cost of water has gone from around $200 per acre foot to as
much as $1,300 per acre foot. That is a 650 percent increase.
I see I am out of time. I will say that all of these
issues, in addition to others, are converging in order to make
it very difficult for the small citrus grower to continue to
survive.
Thank you.
Chairman Curbelo. Thank you very much, Mr. Severns.
Mr. Black.
STATEMENT OF N. LARRY BLACK
Mr. Black. Chairman Curbelo and Ranking Member Meng, good
morning. I am Larry Black, and I appreciate the opportunity to
speak to you on behalf of the 6,000 Florida citrus growers. I
am current president of Florida Citrus Mutual, and also general
manager of Peace River Packing Company, a family citrus
business.
Our family settled in the central Florida area and began
growing citrus in the 1850s. Our company employs 185
Floridians, and is the largest employer in the small community
of Fort Meade.
The citrus industry is a powerful economic engine
contributing over $10 billion annually to the Florida's
economy, and provides over 62,000 jobs. The Florida citrus
industry covers over 515,000 acres, and is the largest
agriculture crop produced in the State. The industry is rich in
traditions, and truly a way of life for my family and many
other multi-generational family farms around the State.
At our industry's peak just 12 years ago, we produced over
240 million boxes of oranges on just under 800,000 acres of
groves. Today, the USDA forecasts we will harvest only 96.4
million boxes of oranges; 60 percent less than our peak
harvest. Some of the decrease in acreage is due to the
development boom and a series of hurricanes of the last decade.
The vast majority of production losses are due to
huanglongbing, or known as HLB or citrus greening.
HLB is a bacteria that attacks the vascular system of the
tree, and is spread by an insect vector known as the Asian
Citrus Psyllid. Neither HLB nor the Asian Citrus Psyllid are
native to Florida, or even the United States. The psyllid was
first detected in Florida in the late 1990s. HLB was first
detected in Florida in 2005, and estimates indicate over 90
percent of the trees in Florida are now infected. HLB weakens
and eventually kills the trees. The lower productivity of the
trees have forced growers to abandon over 130,000 acres of
citrus groves. Growers are learning how to extend the
productive life of the infected trees, but production costs
have more than doubled due to HLB.
Orange juice prices have increased for consumers because
supplies are strained and the cost of production has
skyrocketed. Higher prices and competition from other beverages
has resulted in per capita orange juice consumption being
reduced by 50 percent. I am confident that consumption trends
will reverse as research delivers solutions that will increase
yields of our groves and the per unit cost of production will
decline.
Growers knew early that HLB was a monumental threat to our
industry, and a massive research effort began. Citrus growers
have taxed themselves and have spent over $90 million over the
last 9 years to fund research. The Florida State legislature
has appropriated more than $20 million for the fight against
HLB. The 2014 Farm bill authorized $125 million over 5 years
for citrus research funding through a competitive grant
process.
On behalf of citrus growers across the country, thank you
for recognizing the need for a long-term funding source for the
research needed to solve the HLB crisis that threatens the
citrus industries in Florida, California, and Texas. Growers
are working together to coordinate sprays to control the
psyllid that spreads HLB. Antimicrobials and heat therapy
appear to be possible near-term solutions to improve the
productivity and extend the life of our trees.
Plant breeders are working to develop varieties of citrus
and root stocks that are tolerant of HLB. It is apparent a
massive replanting of the citrus industry is required in
Florida. Economists estimate the Florida industry needs to
plant 20 million trees over the next 10 years to reverse the
decline and stabilize the Florida industry. Our company has
replanted over 350,000 trees over the last 3 years using the
latest production technologies available. I am confident we
will bring these trees into production, and we will be rewarded
for the risk we are taking. The USDA has authorized the Tree
Assistance Program, or TAP, to aid growers with replanting
efforts. The TAP program is a cost-share program that
reimburses growers a portion of the tree cost.
The citrus industry is a core part of America's
agricultural heritage. 62,000 Floridians produce a nutritious
product that is part of a healthy diet. The industry is
comprised of small family farms and associated businesses. The
industry also supports many associated businesses ranging from
vehicle and farm equipment dealers, banks, insurance companies,
et cetera. I am confident our industry will manage through the
current crisis and emerge as even a stronger industry.
Again, thank you for your support funding the much-needed
research. Please consider incentives for growers to replant and
other assistance to grow small businesses as they emerge from
the crisis. Thank you.
Chairman Curbelo. Thank you very much, Mr. Black.
Mr. Murden, you are now recognized.
STATEMENT OF DALE MURDEN
Mr. Murden. Thank you, Mr. Chairman and Ranking Member
Meng.
On behalf of the over 400 commercial citrus growers in
Texas, I want to express my appreciation to you for convening
this hearing today to learn more about the challenges facing
the United States citrus industry and our many small family
owned growers.
My name is Dale Murden. My family and I currently grow
citrus and raise cattle near my hometown in Harlingen, Texas.
In addition to being president of Texas Citrus Mutual, I am
also a current member of the board of directors of the Texas
Farm Bureau. The Texas citrus industry is comprised of almost
27,000 acres across a three-county area in the Lower Rio Grande
Valley. Our growers produce more than nine million cartons of
fresh grapefruit and oranges each year, and another 5 million
cartons of juice fruit all valued at over $100 million.
Texas is the third largest citrus-producing State behind
California and Florida. The total business activity supporting
Texas citrus production is valued at $200 million annually. I
know this pales in comparison to my larger counterparts, but to
my fellow growers, it is worth fighting for.
Currently, the industry employs up to 3,000 workers in a
normal producing year, which culminates with the harvesting
period from October to May.
My testimony today will focus on two critical and pressing
issues facing growers in the Rio Grande Valley. I will discuss
the potential economic devastation due to the invasion of the
Mexican fruit fly from south of the border, as well as the
rampant spread of huanglongbing, also known as HLB or citrus
greening. What sets Texas apart from my colleagues in
California and Florida is our proximity to Mexico and its
porous border. In addition to invasive pests coming from the
south, USDA has estimated that there are conservatively over a
half million citrus trees in backyards and private homes
valley-wide. And we all love to grow our lemon and lime trees
and real proud we can do that, but these trees pose a very
significant threat to the commercial industry, and when left
untreated, provide a safe harbor for fruit flies and the Asian
Citrus Psyllid.
The Mexican fruit fly or MexFly is a fly originally found
in parts of Central America that has now spread beyond the
border into the Lower Rio Grande Valley of Texas. The MexFly is
a problem for citrus fruits which are extremely susceptible to
infestation. Economic losses result from direct damage caused
by the larvae that feed on the fruit pulp. Since 1986, Texas
has participated in a fruit fly control program headed by APHIS
to eradicate the fruit fly from Texas and the Mexican State of
Tamaulipas.
In 2012, APHIS thought they had successfully eradicated the
MexFly, but recently, due to continued violence along the
border, aging USDA rearing facilities, and untreated backyard
citrus trees, the MexFly has been found once again in our
region. This year proved especially hard for one small grove
operation in Brownsville after a Mexican fruit fly was found in
a neighboring backyard tree. The discovery triggered a
quarantine and the grower was no longer able to harvest his
crop for the year, leaving thousands of dollars of inventory on
the trees with no hope for harvest. The problem is now reaching
crisis levels. Since January 2014, there have been fruit fly
quarantine areas off and on in the entire citrus growing region
of south Texas.
Now, while the MexFly poses a real and immediate threat,
the recent finds of HLB or citrus greening has growers of all
sizes in south Texas extremely concerned. There is no known
cure for this disease, and we have learned from our friends in
Florida that this disease is deadly serious. Greening was first
discovered in a Texas grove in January of 2012. Three and a
half short years later, we have confirmed trees located the
almost 100 groves valley-wide. With the extremely long latency
period of this disease, it is really unclear how many more
trees have already been infected. What this has done to growers
in terms of dollars is hard to quantify. When it was first
discovered in Texas, we removed not only the infected tree but
several of the surrounding trees as well.
Today, positive HLB finds have become so widespread that
most growers have discontinued tree removal. As such, it has
quickly become a numbers game and a point of diminishing
returns that keeps spreading throughout the industry.
In a desperate attempt to mitigate the effects of HLB, most
growers have initiated psyllid spray programs to slow the
spread of infestation until a cure can be found. This strategy
is in addition to our regular care programs and has already
increased our grove care expenses by almost $400 per acre.
Federal investments in HLB research and ACP eradication
programs are also very critical to the survivability of the
citrus industry in the United States, and as such, we have
requested full funding under two high priority citrus programs;
the Citrus Health Response Program, and the Huanglongbing Mult-
Agency Coordination.
I would like to again thank you for your attention today on
these issues. In short, the United States citrus industry, as
you know it, is in extreme trouble. We are fighting to preserve
our very way of life and are doing everything in our power to
prevent total eradication of an essential industry.
Thanks again, Mr. Chairman, for holding this hearing, and
we look forward to working with you in the future.
Chairman Curbelo. Thank you, Mr. Murden.
And now, Dr. Rogers, you are recognized.
STATEMENT OF MICHAEL E. ROGERS
Mr. Rogers. Chairman Curbelo, Ranking Member Meng, and
members of the Subcommittee, thank you for the opportunity to
speak to you today about the impacts of citrus greening on
Florida's citrus industry.
My name is Michael Rogers, and I am an associate professor
of entomology at the University of Florida where I serve as
interim director of the Citrus Research and Education Center.
And Citrus greening disease is caused by a bacterium that is
spread tree to tree by an insect known as the Asian Citrus
Psyllid. When a psyllid carrying the bacteria feeds on a citrus
tree, it injects the disease-causing bacteria which destroys
the vascular system, causing a prolonged and slow death of the
tree. Long before the trees completely succumb to the disease,
citrus fruit are reduced in size and quality, making them
unusable for juice or as for fresh fruit. After a tree has been
infected for several years, the trees can no longer hold the
fruit on the tree, and most of the potentially harvestable
fruit that growers have spend thousands of dollars per acre to
grow, drop prematurely from the tree to the ground before it is
ready to be picked.
Since 2005, greening has spread to every grove in Florida,
infecting most, if not all, of the fruit-bearing trees to date.
As a result, the 2015 orange harvest is predicted to be 96.4
million boxes, and this is down from 240 million boxes in 2003,
and is the smallest Florida orange crop since 1966.
The future is uncertain for the Florida citrus industry and
the 62,000 jobs that it supports. While there are many
potential research solutions being developed that hold promise,
putting that ultimate answer in the hands of growers is still
years away. If we had a citrus tree today that we knew for
certain was resistant to this disease, it would take 2 to 3
years to scale up commercial nursery production of that
resistant tree for purchase by growers. Once a grower is able
to actually plant that disease-resistant tree, it will take at
least 4 years for those trees to begin producing a harvestable
crop, and additional years beyond that time to recover the cost
required to grow the tree up to that point. This is a really
discouraging prospect for the small citrus grower who currently
is just struggling to stay in business.
However, there are exciting new potential solutions for
living with this disease, at least in the short term. These
include new citrus varieties that have increased tolerance to
the disease, use of heat treatments to kill the bacteria in the
plant, thus extending the fruit-bearing life of the tree, and
promising bactericidal compounds still being worked on that can
be sprayed on the trees to eliminate the bacteria in the tree.
With a majority of the citrus trees in the field today
nearing death, to stay in business, growers must continue to
replant new trees in their groves to maintain continuity of
production. The short-term solutions available will play an
important role in helping growers do just that. However, with
depleted financial reserves, most small growers are in
desperate need of financial assistance just to stay in business
another season.
Citrus research programs are also being negatively affected
by the reduction in fruit yields. The research funds provided
by the self-imposed grower tax to the tune of $90 million over
the past 10 years are starting to dry up with the fruit yields,
thus threatening to impede the progress of the promising
research that must be continued to provide solutions for this
disease. Fortunately, the availability of new Federal research
funds, specifically the USDA, SCRI, and MAC programs, are
providing some support for research on citrus greening. And a
very sincere thank you to those who helped provide this needed
funding through the Farm bill.
While these funds support some very promising research
projects, there are still gaps in funding that exist for many
promising areas of research previously funded by the citrus-
grower generated tax that are threatened to go unfunded in the
future. Your financial support for further research is crucial
for the future of citrus growers and the 62,000 jobs they
support in Florida, but also throughout the rest of the country
as well.
Land grant universities in every State are dedicated to
serving the public, and Federal research dollars are crucial
for universities to continue their research to benefit economic
development.
I appreciate the opportunity to address the committee, and
I also extend an invitation to any members who are interested,
please contact me to arrange a visit to the CRAC where you can
witness firsthand the effects of this disease and the research
under way to develop solutions to this problem.
That concludes my formal statement, and I am happy to
answer any questions that you may have. Thank you.
Chairman Curbelo. Thank you very much, Dr. Rogers.
I now recognize myself for 5 minutes, and I thank you all
for your testimony. Some of the statistics that you shared are
staggering, and it is very important that we are having this
hearing today to shine a light on what represents a major
challenge for the States represented here today, but more
importantly, for families that are trying to stay afloat.
My first question, which is addressed to all of you, are
you currently seeing or do you expect to see consolidation in
the citrus industry as smaller growers sell or leave the
industry due to the increased costs of production? This is a
major concern for us in our committee because, of course,
protecting small businesses and strengthening them is our goal
here. Do any of you fear that we are going to see a lot of
consolidation as a result of this crisis?
Mr. Severns. Mr. Chairman, I would like to address that in
saying that absolutely we do. In California, the price of
acreage, or what acreage can bring in general, is probably at
an all-time high, and when growers are facing many of the
pressures that they are, first of all, currently our largest,
crisis being our drought situation and the things associated
with that, and on top of that, staring down the problems that
could becoming as far as ACP infestations and HLB, in addition
to some of the trade-related issues that are pressing on us, a
small grower really has to take a look at that and see whether
they want to continue to maintain production in such perilous
times.
So certainly we see it in California. We see those smaller
growers just deciding to sell out. Some of the younger
individuals are going to work for maybe some of the larger
farming operations. You don't see a lot of young farmers going
out and buying acreage. It is nearly impossible right now. So,
certainly I think we will continue to see consolidation, unless
some things change pretty radically in the near future.
Chairman Curbelo. Thank you. Does anyone else want to speak
to that?
Mr. Black. Just briefly, I would like to add that we are
seeing consolidation in Florida, there remains a role for the
small grower. The small grower, like every citrus grower in
Florida, is struggling but on a go-forward basis, I believe
there is still a role for a small grower that is so important
to the fabric and the culture of our citrus industry.
Chairman Curbelo. Thank you. Another question: Are there
ways that the USDA Citrus Health Response Program and Multi-
Agency Coordination Group could be improved? Can you help us
evaluate how these programs have performed and give us some
ideas as to how they can do better?
Mr. Rogers. I will just make a couple of comments. First,
we really appreciate the funding that we have received. And I
was going to mention there are two Federal programs, the SCRI,
which is providing direct research for greening through the
Farm bill that is $125 million over a 5-year period; and then
we have the MAC funds as well. And the difference between those
two, the MAC funds are providing the ability for us to do
research projects that provide more short-term answers that can
be used more immediately by our growers in the field. And this
type of funding is very important.
As I mentioned in my testimony, growers are having to make
decisions today about going out of business. Are they going to
stay in business or are they going to give it up? And the funds
from the MAC program are helping us quickly develop projects--
or programs or approaches that growers can use now. While the
SCRI is more long-term funding, very important science through
the SCRI program, but it is more long term in its goals. You
know, it is looking more for the ultimate down-the-road answers
to this problem. And so I don't know if that answers your
question, but the MAC funding is very important for us.
Chairman Curbelo. Mr. Black.
Mr. Black. Chairman, I would also like to speak to the
Citrus Health Response Program, or the CHRP funds. The CHRP
program is a relatively old program that was developed to deal
with another problem, citrus canker, and what is very unique
about the CHRP program is it offers flexibility for each
industry, Florida, California and Texas, to tailor the program
that fits their needs.
As you heard this morning, each of our industries are in a
much different state as they battle HLB in their groves, and so
the CHRP funding provides that flexibility for each State to
fit their needs and be most efficient with those dollars.
And also would like to echo Dr. Rogers' comments that the
MAC funding is essential to fund short-term shovel-ready-type
projects to get those into the growers' hands as quickly as
possible.
Chairman Curbelo. Thank you.
My time has expired. I would like to recognize the ranking
member for 5 minutes.
Ms. Meng. This question is for anyone on the panel. As you
know, the SBA size standard for a small farm is $750,000 in
annual receipts, which can vary significantly between the type
of farm, and even year based on inflation. These definitions
are important because small businesses have additional
resources allotted to help them succeed, and if a farm is not
considered to be a small business but operates as one, that can
significantly impact its ability to succeed.
How does this definition help or hurt your industry, and is
the current size standard an accurate reflection of the
industry? Or if you had to create your own size standard, what
would it be based on? Employees? Acreage? Receipts?
Mr. Severns. Ranking Member Meng, I certainly don't mean to
sound like I am evading that question, but it is very difficult
to define. In terms of just a dollar amount, $750,000, I
quickly did the math on that, and as I mentioned, 300 acres is
more like a small grower as it stands right now. Years ago that
was different. Years ago that was more like a 40-acre grower.
Well, $750,000 is $2,500 an acre for that grower. If we're
talking gross receipts, that doesn't even pay its farming
costs. If we are talking about net overall receipts, that gets
them a little bit closer.
But as I mentioned, when you have situations like you have
in California where either you have to engage in a battle with
the ACP and/or on top of that, pay for water if you can get it,
which was prior $200 per acre foot to now you could be paying
well over $3,000 per acre just for water. So I'm not meaning to
evade the question, but I think a dollar figure may not
adequately address the issue.
Mr. Murden. Ranking Member Meng, I've got an analogy about
that. My grandfather made his living on 200 acres of farmland,
raised three daughters, put them all through school. If I tried
to do that today, I would probably starve to death. So things
have just changed dramatically, and it is hard to put a number
on it, but, you know, I wished I could do what my grandfather
was able to do because I would rather just farm 200 acres than
killing myself trying to do more, more, more, but it is just a
different day and a different time, and costs keep increasing.
Ms. Meng. Is there a better standard or measure that you
think the Federal Government should use to more accurately
reflect what determines a farm to be a small business or not?
Mr. Black. Ranking Member Meng, I believe revenue is the
easiest measure, but I do believe it needs to be increased. The
$750,000 for the small business is too low.
Ms. Meng. Thank you. Where do each of you see your industry
in the next decade or so, especially considering the numerous
challenges you face? What is the most pressing issue for small
citrus operations, and what is the best way for us to assist
your industry? For example, increased funding? Amending
regulations? Trade policy? Tax breaks? What is your wish list?
Mr. Murden. All of the above.
Mr. Severns. I would agree with Mr. Murden. Certainly the
trade issues that are before us are very important to
California. We export a very high percentage of our crop, and
export is certainly important to us, and it is a large source
of our growers' revenue. So from a California perspective, we
support TPA, and we would like to see that pass.
As I look to the future of the California industry, I am
always optimistic. I think any grower, any farmer is
optimistic. That is how they live life. They make a bet on an
entire year that they are going to be able to recover their
costs and make some. So from a perspective of just who we are,
we are optimistic. When we look at the challenges coming at us,
whether it be HLB or ACP or water or any of the regulatory
issues, as mentioned before, the regulatory issues specifically
impinge on a small grower, because generally a larger grower
hires people to take care of that. The smaller grower is his
people. He takes care of those particular issues.
Additionally, as far as the water issues are concerned, in
California, if we don't resolve some of those very soon, if you
can get water, you have seen a radical change in the amount of
money that it takes to farm per acre.
Ms. Meng. Thank you.
Chairman Curbelo. Thank you, Ms. Meng.
I would now liked to introduce and recognize my colleague
from California, Mr. Knight.
Mr. Knight. Thank you, Mr. Chair. I thank you for the
indulgence. I don't sit on this subcommittee, but I did have a
couple questions and mostly for Mr. Severns.
I appreciate you doing what you do. It is difficult out
there, and there is nothing like the water issue in California.
I cannot impress upon that enough. I think that when I talk to
my other colleagues in Congress, there is nothing that we talk
about more. I tell them this is a national emergency. You don't
understand what is happening in California, and I think that
they will come about August of this year. You will see the
impacts.
But the zero allocation, I think that people don't get
that. That you don't get any water unless you are pumping it
from the aquifer or from your wells. That is how we are getting
water to our farms in California right now. And the aquifers
are being depleted in some areas. Some areas have plumes that
they cannot be taken out of anymore, and it is getting more and
more difficult.
But my questions are more specific to what we are talking
about today with the disease that is happening. I understand in
Florida that it has taken over many of the areas. Has the
California legislature taken this as an issue? Have they seen
this as something that could strike the citrus industry in
California, or are we waiting until this becomes a bigger
problem?
Mr. Severns. Absolutely not. A number of years ago Assembly
Bill 281 created the Citrus Pest and Disease Prevention
Committee in California. I happen to be secretary/treasure of
that particular committee. We assess all of our growers about
eight cents a carton. It brings in somewhere between $15 to $18
million per year for us to fund this program that is involved
in trapping and suppression, and in the case of finding HLB,
eradication were that to happen. And so far, while we have had
a spread of the psyllid in the southern California area, in the
central California area we have been much more successful. And
so far we have had one tree, that was discovered in southern
California with HLB. It has since been removed. We continue to
test the trees all around it and have had none of those trees
come up positive.
So there has been a response in California to this in a
positive sense. Our industry works directly with CDFA and USDA
in administering this program. We are fortunate enough to see
what happened in Florida and received advice from them on being
proactive in this, and that is a lot what generated or
initiated our CPDPC program.
Mr. Knight. Okay. And I guess my next question is to Dr.
Rogers. Have you seen in the last, maybe couple of years that
Florida has been going through this advancements that are now
making it so we can extend a orchard to where we couldn't have
4 years ago, or----
Mr. Rogers. Yes. Absolutely. We have definitely made a lot
of advancements. And we have learned more about this disease.
We are learning how not only to better manage the psyllid and
slow down the disease spread, but once the trees are infected,
we are learning more about how that pathogen moves in the tree,
how it affects the tree. And ultimately, we are looking at a
lot of things like enhanced nutritional programs and better
watering, the effects of soil pH and bicarbonates.
Some of these issues come together, and when we address
those issues, I am not saying we are going to resolve the
disease or cure it, but we can maintain trees for a number of
years longer than we could have in the past. Because if we
weren't at that point now, most of the trees would be dead, and
that doesn't mean that we have got a lot of time, because we
really haven't. We have been living on borrowed time for quite
a while now. And so--we are seeing small growers going out of
business weekly.
Mr. Knight. Okay. And, Mr. Murden, you brought up a
subject, the Mexican fruit fly that we have been dealing with
for many years. Tell me how that is affecting in Texas. Is it
affecting the situation worse than it was 20 years ago? Have we
kind of maintained this?
Mr. Murden. I think it is probably worse, and there are
lots of reasons and lots of blame to go around, I guess, if you
will. You know, we have got a real aging rearing facility down
there. It is like a 1940s Army barracks, Moore Field Air Base,
that was back in World War II that is our rearing facility. It
is in disrepair. We have got the issues along the border with
Mexico. Our counterparts in Mexico can't go out and do the
trapping, the scouting, or the releases because of the violence
along the border. So we have got several issues going on. The
door yard properties in our case is a huge, huge problem. They
go untreated while we treat in the groves. You won't find the
fruit fly in the grove, but due to the current quarantine
restrictions, if the fly was found in the backyard, it is going
to affect the adjacent grove from harvest.
Mr. Knight. Thank you very much.
Thank you, Mr. Chair. Thank you for bringing this forward
and talking about this issue.
Chairman Curbelo. Thank you, Mr. Knight.
And Ms. Lawrence, you are now recognized for 5 minutes.
Mrs. Lawrence. Thank you.
Mr. Black, first, I want to commend you for your rich
tradition of your family business and your contributions to the
economy, and the jobs you provide in the community. Thank you.
While citrus farms are not prominent in Michigan as in
Florida and California, we do rank, I just want to brag, we do
rank number one nationally in the production of blueberries and
tart cherries. We have our claim to fame.
In your testimony, you talk about the--changing the Tax
Code to allow growers to immediately expense costs in the year
that they take place. Mr. Black, can you elaborate on the need
for the change and how it benefits citrus growers, and would
the government experience any cost, and if so, would they be
substantial? Can you comment on that, please?
Mr. Black. Yes. Thank you, Ms. Lawrence. The proposal to
change the Tax Code would offer an incentive for growers to
plant trees to increase and accelerate the pace they are
replanting. Currently growers have to capitalize the cost of
the trees and the preproduction cost, all of the labor, spray,
water, et cetera, for 4 years, and then at the end of 4 years,
they place that asset in service and depreciate that asset for
a period of 10 years.
What our industry is proposing is similar to Section 179
depreciation that allows for the immediate expensing of those
assets when they are purchased. That is really a timing issue.
The grower is allowed to deduct the same expenses as he would
under the current model, but rather than over a 14-year period,
it would be immediate expensing. So the cost would be the
interest costs for the government to delay those tax receipts
over the 14-year period as opposed to receiving them right
away.
Mrs. Lawrence. Would this change have an impact or this
incentive, do you see it going across other types of fruit
industries as well? Do you--are you advocating for this to be a
change in the Code that would impact all growers?
Mr. Black. No. The current legislation is solely for citrus
trees across the United States, but, no, we do not propose
expanding that initiative. In my opinion, the section 179
depreciation allowance has been very effective to stimulate the
economy and increase the capital spend by businesses.
Mrs. Lawrence. Thank you.
Any other members of the panel would like to comment on the
Tax Code?
My last question is, we talked about the fruit flies, and I
think it was Mr. Murden commented on that. You talked about
what you are currently doing to mitigate it. What are the
costs? What would it cost to mitigate the fruit flies? And do
you have--as far as the government, how can we partner with you
in that?
Mr. Murden. We actually already are. APHIS is a very strong
partner in that, and it actually is kind of a three-pronged
approach. The growers have an assessment that they kick into
this eradication program and scouting program. Our Department
of Agriculture does as well in Texas. And APHIS carries the
lion's share. We have just got lots of problems and lots of
needs. The biggest and foremost is that aging facility down
there and trying to get it in a budget for USDA to re-do. I
think the last estimate I heard to rebuild that facility is
close to $30 million.
Mrs. Lawrence. Okay. Well, thank you all so much.
Chairman Curbelo. Thank you.
Mrs. Lawrence. Yield back.
Chairman Curbelo. Thank you, Ms. Lawrence.
I recognize myself for 5 minutes.
Mr. Severns, your comments on TPA are timely as it seems
like the House will be considering this legislation tomorrow.
Can you expound on your support for TPA? I think there is
an assumption that most in the agriculture industry would be
opposed. Could you comment a little more on why you are
supportive? And if anyone else would like to comment, and maybe
perhaps with differing views, you are welcome to do so as well.
Mr. Severns. We export a very significant portion of our
crop, and allowing that negotiation authority and being able to
work these issues out on a timely basis are crucial to where we
are even at this time in negotiations with different countries
on export issues.
I might mention that by virtue of the fact we do export the
amount that we do, it is important that authority be extended,
and in so doing, we are able to maintain those markets and
maintain those negotiations and work through some of these
issues on a timely basis, and if we don't have these crucial
export markets, there is only a few other things that can
happen, and one of those things is that fruit dumps back on the
domestic market.
Domestic consumption, while improving, has been relatively
flat over the last number of years. So that export market, in
addition to being an outlet other than the domestic market,
also is a place where we can really excel. And it has been very
important to the growers' overall return to be able to
participate in those export markets.
We deal primarily over in Southeast Asia, Japan, and Korea.
Those countries are very important to us.
Chairman Curbelo. Anyone else have any views on free trade
that they may want to share whether specific to the current
TPA----
Mr. Murden. I agree with everything Kevin said, actually.
I will put on one of my other farming hats right now. China
is one of our largest markets. So I think it is very important.
Mr. Black. I would like to add, trade is a very important
part of our business, but also recognize that both HLB and the
Asian Citrus Psyllid are invasive. They are not native to our
State or our country. So as any part of a trade agreement,
please consider port inspections, et cetera, to keep our
domestic industries across all agriculture safe.
Chairman Curbelo. Thank you for those comments. And, in
fact, as I understand it, higher standards for agriculture are
one of the key goals of the current TPA that we are
considering.
I also want to ask about the H-2A Visa Program. This is a
program that allows certain American employers to bring foreign
nationals to the United States for low skill temporary or
seasonal agricultural jobs for which American workers are not
available.
Can you describe the extent to which you rely on H-2A
workers to help harvest your fruit? And what challenges have
you encountered in ensuring you have a sufficient labor force
to do the work needed on a timely basis?
Mr. Black. Chairman Curbelo, our business does not engage
H-2A workers. We have been fortunate that we have been able to
pull in our local labor pool and have not had to file a
petition and secure H-2A workers. However, approximately 80
percent of the Florida crop is harvested by H-2A workers. So it
is very important to the Florida industry, and there are
definitely changes in the H-2A program that would be welcome
for all of agriculture to make that process easier for growers
when they need to source workers to harvest their crops and
other ag work.
Mr. Severns. We in California tried the H-2A program. In
the context that we did try it, it didn't work very well for
us, to be very frank about it. I don't know that I would throw
the baby out with the bath water, so the speak. I think there
were some logistical and communication issues that made it very
difficult. But at this time, we don't use any H-2A workers.
I will say that having a sufficient labor force to harvest
our crop in California is a very, very difficult issue right
now, and looks like it could get more difficult.
Chairman Curbelo. Thank you.
Ranking member is recognized for 5 minutes.
Ms. Meng. Emerging scientific consensuses hold that genetic
engineering is required to defeat citrus greening as they can
find no other way to combat it. They make the argument that
most crops have been genetically modified in some way to reap
the most desired fruit, vegetable, or green. In fact, many
popular types of apples fit in this category.
What are you hearing from small citrus growers as to their
openness to this approach, and have you conducted any consumer
research into this particular solution? And, Dr. Rogers, maybe
what are some of the pros and cons of these methods?
Mr. Rogers. Okay. First, to answer the question, have we
actually surveyed growers for their willingness to plant a
genetically modified crop; I don't have the information in
front of me. There is a document that the University of Florida
extension has put out that was a survey of growers on their
willingness to adopt GMO technology. And the growers were
overwhelming in support of doing that. So it was very clear
cut.
So to the questions--what was your second question? I am
sorry.
Ms. Meng. The pros and cons and what consumers may----
Mr. Rogers. Pros and cons, okay.
And I think when you look at the whole thing about
genetically modified crops, people come in thinking of
Frankenfoods or something like that. But there is a lack of
education on what is going on, because when you look at a
conventional plant-breeding program, you take two different
plants, they cross them trying to get a superior trait, maybe
it is a flavor, or a taste, or appearance that a consumer wants
to buy. You don't control what gets crossed when you do those
types of breeding programs.
So there have been cases with potatoes and some other
crops, where they have actually crossed them, and they have had
products that were actually unhealthy for humans, and you can't
control that. With genetic modification, you actually control
the specific gene that you want to change, and nothing else
gets changed. So you know exactly what has happened.
And we can talk all day about some of the pros and cons,
but there is definitely a lot more benefit, and there is really
not any negative other than the public perception.
But I do want to mention one other thing that is happening
that is really interesting. We do a lot of work on genetic
modification in Lake Alfred at the CREC. And our plant breeders
are taking genes spores resistant to greening that had been
identified to citrus and moving those now to commercial
varieties that we want to grow. Because a lot of the resistance
we have, we can call them a library of plants that the breeders
have. They are not commercially suitable varieties, but they
are moving genes from one citrus plant to another.
But then they are also finding ways to turn off the plant's
response to the disease. By just simply deleting a gene that
allows the disease to be expressed, you can have the same
effect as far as mitigating the disease. So you are actually
not even adding anything to the plant; you are just taking
something away. Those are probably more likely to gain
regulatory approval and be something that we can do in the not-
too-distant future regulatory-wise. We have a lot of these
types of projects in the field, looking at genetic-modified
plants that are very promising. We have very promising results
right now.
Mr. Severns. Ms. Meng, I would like to make a comment on
that. Two different things come to mind for me, and they are:
trying to engage the public in a rational, intelligent
conversation about the whole GMO issue is one. And, also,
having an understanding that there is a very distinct
possibility--and this isn't hyperbole; it is not an
exaggeration--that if HLB continues unabated, we won't have any
citrus in America. So if the question was asked, do you like
citrus enough, what would you be willing to accept in order to
continue to have it, and that doesn't necessarily mean it is a
GMO-only solution, but I think that question does have to be
asked, because that is a possibility.
Ms. Meng. Okay. Thank you.
I yield back.
Chairman Curbelo. Thank you, Ms. Meng.
Mr. Black, maybe you can help us bring this all home. You
noted that while the citrus industry is comprised of family
farms and associated businesses, it supports many other
businesses. Can you explain how important a vibrant citrus
industry is to Florida's economy, and particularly to small
Florida towns, or maybe people watching this hearing today
wondering why this Congress focused on this issue? Why is this
important?
Can you expound on--in the State of Florida, for example,
why the citrus industry is so critical.
Mr. Black. Thank you, Chairman Curbelo.
Florida is a very diverse State. You fly into Miami and
drive just a couple of hours to the small community of Fort
Meade, where our business is located, you wouldn't think you
were in the same State at all. Florida has a network of small
communities. Fort Meade has approximately 5,000 residents. Our
company is the largest employer, but we also support from the
automobile dealership to the hardware store to the grocery
store, where our employees shop, et cetera, et cetera. The
domino effect, the multiplier effect of our industry is
unbelievable in small communities where the other mainstay of
the Florida economy, tourism, is just not present.
Chairman Curbelo. Thank you.
Ms. Lawrence, do you have any additional questions?
Mrs. Lawrence. Yes, please.
Chairman Curbelo. You are recognized for 5 minutes.
Mrs. Lawrence. Thank you, Mr. Chairman.
My question was a follow-up to--and I really am glad that
the chair brought up the issue of the trade.
My understanding is that while there are open doors for our
country and your industry to export, where are you with the
import issue?
You know, absolutely, Mr. Black, the control and the
regulation of the quality of the food that we receive is a
very, very high priority. But with that being said, I am very
much in tune to the auto industry, and I know that the--this
bill, without controls of tariffs and other issues, it gives an
advantage.
Our current proposal gives advantage to the foreign
companies where they can devalue the yen and do a lot of
things.
So let's talk about the--if we open the doors to the citrus
market through the trade, how would that impact my United
States costs, and your ability to maintain a certain level of
profit in your industry? Has that been considered and
discussed?
Anyone can jump in on that.
Mr. Black. Sure. Mrs. Lawrence, I will start.
Brazil is Florida's largest competitor and the dominant
force in the orange juice business.
Mrs. Lawrence. Okay.
Mr. Black. We have a tariff in place on imported orange
juice that, to a degree, levels the playing field due to the
labor cost differential, regulatory cost in our country that is
not as prevalent in Brazil.
So you make an excellent point that as trade negotiations
ensue, that all industries be considered and that we have fair
trade above everything else.
Mrs. Lawrence. Mr. Severns, do you have anything?
Mr. Severns. My understanding is that as trade promotion
authority passes, that Congress still has the ability to vote
on that particular deal, if I am understanding correctly, not
necessarily each and every aspect of that.
Certainly, we are concerned about what comes onto our
shores right now, not just from a trade perspective, but from
an invasive species perspective and that sort of thing.
We currently do have offshore fruit coming in, and that
does directly compete with the product that we have. And I
guess inasmuch as we live in a global economy, that is not to
be unexpected.
Certainly, our perspective is going to be what we think is
healthy and beneficial for the citrus industry. And in my
comments, I don't mean to make particularly any other comment
about another industry other than to simply say from the
perspective of trade and the perspective of what we would be
able to do through export, it would be an improvement of the
situation for us, and that is why we support it.
I would hope that because of the continued ability of
Congress to approve or disapprove any certain trade agreement,
that would still create a check and balance for the other
industries as well. Thank you.
Mrs. Lawrence. Dr. Rogers, or Mr. Murden, any comments on
that?
Mr. Murden. I think with any trade agreement, the devil's
in the details. I understand free trade is not always fair
trade. I have been a product of that down in the Mexican border
for a long time. So it is up to y'all to trust but verify, so
to speak. I do agree with your concerns and Kevin's as well on
the invasive species and pests that can come across. So you
have go to watch it. But the fact of the matter is, we grow
more than we can eat, so we need to have the ability to get it
out there.
Mrs. Lawrence. Okay. That is a question that I really, as
we are now debating and entertaining this, is the devil is in
the details. And that, you know, just to say that we want trade
and open up the gates, there is an obligation, responsibility
of Congress to ensure that it is fair and that we do protect
the quality that when we start talking about food that is
coming into our country. So thank you very much.
Mr. Severns. Thank you.
Mrs. Lawrence. I yield back, sir.
Chairman Curbelo. Thank you, Ms. Lawrence.
I want to thank all the witnesses for taking time away from
their businesses and families to participate in today's
hearing. The United States citrus industry produces the fresh
fruit and juice that nourish millions of consumers on a daily
basis and are a vital part of our economy.
For small growers, the increased costs of production due to
HLB, the Mex line, the drought in California, pose significant
challenges. Most alarming is the threat to citrus growers in
Florida, California, Texas, and Arizona from HLB. The
Subcommittee on Agriculture, Energy, and Trade will continue to
highlight the problems that small agricultural operations are
facing and examine policy solutions that allow farmers, their
families, and employees to thrive and provide the fresh produce
and other goods that Americans consume and value.
I want to thank the ranking member for her cooperation in
setting up this hearing. I want to thank you all, again. We are
about small businesses in this committee, which means we are
about families and the people who they employ.
So we will continue doing everything we can to shine a
light on this and to be an advocate, not only here in Congress,
but more broadly, in the Federal Government to make sure we do
right by our small businesses, the families they represent, and
all the people they employ.
I ask unanimous consent that members have five legislative
days to submit statements and supporting materials for the
record.
Without objection, so ordered. This hearing is now
adjourned.
Mrs. Lawrence. Thank you.
Mr. Black. Thank you.
Mr. Severns. Thank you.
[Whereupon, at 11:15 a.m., the subcommittee was adjourned.]
A P P E N D I X
Testimony of
Kevin Severns, Severns Farm
On Behalf of California Citrus Mutual
``Squeezed: Current Challenges for Small Citrus Operations''
United States House of Representatives
Committee on Small Business
Subcommittee on Agriculture, Energy and Trade
Washington, DC
June 11, 2015
Chairman Curbelo and Ranking Member Meng, thank you for the
opportunity to testify today on the challenges that small
citrus growers like me are facing.
California's varied climactic conditions and unique
topography create a perfect environment for a year round supply
of oranges, lemons, tangerines and mandarin varieties. The
Golden State's lemon crops from Imperial County near the
southern border to Madera County in the north-central San
Joaquin Valley produce fruit of unparalleled quality.
California's inland valleys with their rich soils, hot summers
and (usually) cool wet winters yield the best eating oranges in
the world. All of this...and we have the global demand to prove
it. I should also mention the fact that our State grows 50% of
America's fresh produce and California supplies 85% of the
United States' fresh citrus! Our citrus growing areas stretch
from the very southern end of the state over 700 miles north
into Glenn County in northern California. Our state is truly a
``Garden of Eden'' that provides healthy, safe products to a
hungry world.
Years ago, small family farmers moving west to California
launched a gold rush of another type...(And a sustainable one
at that!)...a citrus industry that has provided our nation with
``eating citrus'' for nearly 150 years! Today we have about
3,500 growers, 100 packing houses and probably 12,000 or more
employees that work in many cases year-round. We sell citrus in
all 50 states and many (if not most) countries of the world. It
would be a dangerous mistake for either the grower or the
citizens of our great country to assume that a domestic citrus
industry exists as a birthright and will just always be there
without great effort to sustain it. The major citrus producing
states represented here do what the other states cannot--that
being the production of citrus fruits for the rest of the
nation and the world on a year around basis!...This is no small
reason to do everything possible to ensure that citrus
production in these states remains vibrant.
Defining a ``small citrus grower'' is a lot like explaining
the size of a fish...it depends on what pond you are fishing
out of! Years ago, a 40 acre citrus grower could make a
reasonably good living. 50 years ago, a 40 acre grower, while
doing much of the required work and tree care by his or her
self and/or family members, probably lived in a modest home on
the family acreage, drove a decent car and sent their kids to
local colleges or universities. Often the young ones would come
back to the farm and take over when mom and dad were less able
to do the work in their later years. Today, the number of acres
needed to accomplish something that might be more like 300
acres. It would be impossible to farm that much acreage without
some full time help. The grower of today has to contend with
many issues in the normal course of operation that was not
required 50 years ago. Food safety/Good Agricultural Practice
logs and annual audits, Pesticide Use Reports, Ground Water
Management Plans, Well Drilling Permits, Illness and Injury
Prevention Programs, continuous updates of Material Safety Data
Sheets, Employee Safety Training, Workers Comp and Liability
Insurance Issues, Farm Equipment and Truck Emissions
requirements and updates previously were not part of a growers
day to day tasks. Nor were Highly Erodible Lands and Wetland
requirements--and that's just a very partial list of what it
takes to run an operation today! Not that any of these things
are bad, per se, but they demand people, time and significant
capital to deal with properly. It is pretty much impossible for
a small citrus grower to handle all of these demands on their
own. Outside help and consultation is nearly always required
and none of it is free.
So the options are get bigger, take an outside job or sell
out. I, as many other growers do that own acreage of my size,
work a ``regular'' job to, as we say, ``support my farming
habit''. That is not to say that I don't love what I do, both
as a farmer and a citrus packinghouse manager--I do--that's why
I do it. But as with many like me, my children have seen the
hard work, time and stress involved in maintaining their
lifestyle. They have chosen other career paths. I really don't
blame them. It is hard already, without the additional
stressors to those already described. I'll go into more depth
on the other challenges we face as I continue to lay out the
narrative.
At one time California boasted 285,000 total acres of
citrus production. Primarily due to the drought conditions in
the State, that number is now down to 270,000 with more
scheduled to be bulldozed this summer. The small citrus grower
is disappearing from the landscape of California's rich
agriculture heritage. A ``young'' citrus grower is a very rare
individual these days and if you do fine one, chances are they
are working for a larger, corporate farming interest.
I want to make sure that my message doesn't denigrate the
``large'' citrus grower. This is neither my focus nor desire.
Our Industry needs those larger operations with their efficient
economies of scale. To be sure, it's the larger citrus growers
that have forced our industry to modernize and supply the
consuming public with varieties that they desire. The larger
interests have been key in pushing innovation and research that
has aided all citrus growers. Simply put, we need them, but I
would suggest that a healthy citrus industry is also a diverse
citrus industry. While the well-being of large scale citrus
growers is vital to the health of our Industry, I would also
say that the health of the smaller scale operators is just as
important.
Moving forward through this narrative I hope to illustrate
the additional ``stressors''--beyond what has already been
described. Hopefully a clearer picture will emerge as to why
many small family-based operations either have, or are
considering ``selling out'' while properly values in California
are at inexplicably high prices per acre. If at the end of this
presentation you understand why younger owner/operators are
becoming a rare find and why small scale citrus growers (and,
in a parallel sense, all citrus growers) ought to be considered
for the Endanger Species List then I will consider the honor of
being invited to address this Committee a success.
No more U.S. Citrus?
In fact, it seems entirely appropriate to ask ourselves:
``Do we want a domestic citrus industry?'' Are we OK with
potentially sourcing citrus fruits (or other produce
commodities) from distant shores? Do we realize that U.S. grown
citrus has a flawless record as a healthy, safe, nutritious and
affordable product yet could very easily disappear from our
store shelves? This isn't just hyperbole. If we continue on our
current trajectory, it is very likely that this could happen in
the not-so-distant future! Invasive pests and diseases,
drought, misguided water policy, 40 years of inaction with
water infrastructure (as the population in the state doubled in
California), international trade issues and the interaction of
all of the above have caused our great industry ``ship'' to
drift perilously close to being dashed to pieces on the rocks.
We in California see the decline in production in Florida
and the other south-eastern citrus producing states. We share
the desperation of the Florida and Texas citrus farmer as
Huanglongbing or HLB, a disease that kills any citrus tree it
infects, ravages their groves! We see our future in them and
realize that if a solution is not found soon we will all be
done producing citrus. This disease does not discriminate
between large and small growers. Other stressors we will
discuss later will likely create some distinct disadvantages
for the smaller producer, but the potential for all of us
suffering great loss is high. In California, we have the bug,
the Asian Citrus Psyllid (what I will refer to as the ACP),
that spreads the disease and know that the probability is high
that we will eventually find some ``hot'' (or HLB infected)
trees out there. The task before us is to keep the ACP away
from any potentially infectious trees and also to find those
infected trees before the ACPs do and remove them before HLB
can gain a foothold.
We were fortunate enough to find a lone tree, in Southern
California that tested positive for the disease after a scout
saw its symptoms. That tree was removed and a few years later
we continue to test nearby trees for the disease, thankfully
with negative results so far but we are not so naive to think
that's the only one. That tree was grafted with bud wood from
an HLB infected tree in Southeast Asia that was illegally
transported buy a hobby gardener. Chances are, this individual
did not know that he was doing anything wrong or dangerous. But
as is so often the case, one small spark had (and continues to
have) the potential to wipe out an entire forest of citrus
production, a $2.4 billion dollar industry in California.
Again, any assumption that I am exaggerating should be fact
checked with just about any Florida citrus grower! They are the
unfortunate voice of experience that our California Citrus
Industry listened to and heeded just before the first ACPs were
found in California.
The warning was clear: Control the bug, keep it away from
diseased trees and you'll stem the spread of the disease.
Florida growers were more than willing to tell us their
stories, what they did and didn't do--and what worked and what
didn't. They told us of the mistakes they made in not
controlling the ACP. At the time, little was known about the
latent nature of the disease. A tree can be infected for two or
three years before it begins to decline and in fact can test
negative for the disease until just before it begins to show
symptoms. Florida growers told us that they knew the ACP was
spreading but they weren't seeing the disease--until it was too
late. When evidence of the actual HLB disease began to show up
in Florida, despite an aggressive infected tree removal effort,
it was soon evident that Florida growers were not going to be
able to keep ahead of it. Florida growers had been hit by
multiple tree damaging hurricanes, Citrus Cancer Disease and
simply, when the ACP showed up, they had lost the resolve to
fight a pest that wasn't yet causing a problem that was
evident.
Now Florida's citrus production is in free-fall. If some
type of cultural, scientific (or combination thereof) solution
is not found soon, Florida's Industry will cease to exist as we
know it. They have already suffered critical damage and even
now, even if a solution is found soon, Florida, as a citrus
producing state will never be the same. Texas is also well down
the same road as the disease has now jumped the southern border
and has begun to spread north through their production areas.
California, again, has had the unfortunate advantage of
observing these situations unfold and we have done our level
best to heed the warnings and take a very aggressive, proactive
approach to beating back the bug that carries the disease and
quickly remove any tree that tests positive for the disease.
All of that said, we realize that we are just trying to buy
time--time that whether by providence or science (I would say
that both are the same) gives us opportunities to find a
solution to the disease itself.
In September of 2011, California state legislation was
passed that created a new industry Committee tasked with
vetting and implementing a robust statewide trapping, testing,
suppression and eradication effort. The Committee was to be
funded by every commercial citrus producer in California. All
commercial growers in California assess themselves (currently)
$00.08 cents for every 40 pound carton equivalent of citrus
produced. Over the past five plus (5+) years, California
Growers have self-funded an effort that has collected about $15
million annually to pay for the efforts of the California
Citrus Pest and Disease Prevention Program--ad it's oversight
committee, the California Citrus Pest and Disease Prevention
Committee or CPDPC. We in California like to refer to it as the
AB 281 Committee, because the passage of California State
Assembly Bill 281 is what brought the program into existence. A
broad range of Industry members sit on the Committee, all for
ZERO compensation and I might add with no small investment of
time. I have the honor and privilege of serving the Executive
Committee of that Board as Secretary/Treasurer.
That is not to say that the AB 281 Committee works alone.
The California Department of Food and Agriculture administers
the program and executes regulatory, ACP trapping, disease
testing and residential treatment programs across the State.
The United States Department of Agriculture (USDA) partners
with us through the Citrus Health Response Program (CHRP) and
the USDA's Animal Plant Health Inspection Service's Multi
Agency Coordination group headed by Dr. Mary Palm. All told,
the CPDPC is tasked with overseeing a $25 million per year
effort that also includes a promising beneficial insect (or
parasitic wasp) program. The CPDPC is also aided by the
California Citrus Research Board and the many research projects
feverishly looking for new ways to detect the disease earlier,
destroy the bug, destroy the disease in the tree (without
destroying the host tree), finding disease resistant trees or
rootstocks, and finding a better, more effective beneficial
parasitic insect to slow the spread of the disease-carrying
Asian Citrus Psyllid. The Citrus Research Board has been a
longstanding effort of the California Citrus Industry and is
funded by a separate grower assessment that collects another
$00.03 per carton from California Citrus Production.
At this point I would like to take a brief moment to urge
continued support of the Citrus Health Response Program
administered by the USDA's Animal and Plant Health Inspection
Service. CHRP involves all of the citrus producing states and
has as its stated goal ``to sustain the United States' citrus
industry, to maintain grower's continued access to export
markets, and to safeguard the other citrus growing states
against a variety of citrus diseases and pests. This is a
collaborative effort involving growers, Federal and State
regulatory personnel and researchers.''
So far we in California have been able to hold the battle
lines against the disease. We have appealed to residential
citrus tree owners to work with us in monitoring their trees
for the ACP and the HLB disease. At this particular moment in
time, we have been successful against HLB disease. Controlling
the Asian Citrus Psyllid has proven to be much more of a
challenge with nearly all backyards in the Los Angeles basin
having at least one citrus tree growing in them. The area is
currently a hotbed of ACP infestations but subsequent
treatments of those outbreaks appear to have stemmed any
additional HLB discoveries--but we cannot let our guard down!
The San Joaquin Valley and the northern citrus producing
counties have had to deal with occasional, small ACP detections
(in terms of numbers) in some residential and commercial
citrus. Quarantines, while costly and inconvenient to deal with
have become something the Industry has learned to manage
through. Growers are aggressive about treating local detections
by both conventional and organic means--but doing so is
expensive. So far-so good, as far as ACP in the San Joaquin
Valley, but there are some seemingly unrelated threats that
have significant potential to converge and make victory in the
war to survive much less promising.
Drought and Water Policy. ``Extreme'' fails to describe the
drought and water situation in California. I say drought and
water because some of the issues are simply a matter of a lack
of normal rainfall, others are the result of misguided (and an
absence of) sound water policies in California. The area I
serve as General Manager of Orange Cove-Sanger Citrus
Association receives surface water primarily from the Friant-
Kern Canal which in turn has water originating from the San
Joaquin River. We are going into our second year of ``zero
allocation'' of water from Friant. What little water that has
been acquired by local growers has been the result of other
users that have fallowed land and/or given up water that they
have a right to for significant compensation. The Orange Cove-
Sanger Citrus Association is a microcosm of the California
Citrus Industry, particularly along the eastside of the San
Joaquin Valley. The cost of water has gone from around $200.00
per acre/foot just a few years ago to as much as $1,300.00 per
acre/foot today. The average is probably around $1,000.00 per
acre/foot. Generally, citrus trees need about 3 acre/feet per
year. Doing the math, the grower paying $1,300.00 per acre/foot
has had a 650% increase in water cost, if it's made available!
This is a bad deal for everybody, from the grower to the
consumer. It is particularly hard on the small family farm that
may not be capitalized as well or may not have the resources to
seek out solutions such as water transfers, etc. As bad as the
cost of water is, it is really immaterial if a grower is forced
to remove or abandon their grove because surface or ground
water is simply not available. We have a number of growers
within our Association that are dealing with this very
situation, and again, that is to illustrate what is happening
in an industry of which we are a 1.5% portion! Unlike some row-
crops, we do not simply ``plow-under'' one season's crop and
replant when (and if) the water returns. Citrus trees can take
from 3 to 5 years to yield any viable production and 7 to 9
years before they have paid back their own cost of development
and become profitable!
It would be sad enough if all this was simply a result of
the lack of rainfall but it is not. California's water system
in its current condition was designed to handle half the
population that now occupies the state. If we had kept to the
task of continuing future water projects we would be in a much
better position to provide water for people, farms, jobs and
fish! While California recently passed a water bond that is a
very positive step in the right direction, it will do little to
fix the current situation. Contrary to recent media reports our
water woes are not the result of ``Big Ag's'' overuse of water
but rather (in addition to the drought) the creation and
aggravation of an already difficult problem by interpreting the
Endangered Species Act in a way that is completely unbalanced.
Restoring a salmon fishery might be a worthwhile endeavor if it
hadn't been attempted in the midst of an historic drought. If
the reservoirs and canal systems that were once a part of a
grand, visionary plan that California's lenders of years ago
had conceived had been developed, might we have enough water to
carry our cities, farms and fisheries through our current dry
cycle? Nature has created the current crisis but neglect and
unbalanced environmental policies have made it a true disaster!
The way the Endangered Species Act is currently being
implemented has, as many farmers would attest, put many a
family farmer in the category of endangered. If we don't find a
more balanced approach to the ESA, not only will fish be
endangered, but many smaller family citrus farms will become
extinct!
Earlier in this presentation, I suggested that many of our
current challenges to the continued existence of the California
Citrus Industry are interrelated. As an example, take a grower
who has lost their water. The grove simply dries up. It can
take a citrus tree years to fully succumb to a lack of water.
From an economic perspective, that tree is essentially dead
from a production standpoint after a partial summer of no
water. If it does set a crop, the fruit will be unmarketable
because of poor taste, lack of juice, small size and softness.
It may still have a few leaves and even push out some new
growth if a (currently rare) rain event occurs. Those little,
green glimmers of hope we call leaves have a dark side. First
of all, citrus growers don't get paid for leaves but even more
chilling is the realization that new leaf growth is a prime
attractant for insect pests, specifically the Asian Citrus
Psyllid! When a grower has lost his very source of revenue, how
can that individual be forced to spend money he or she doesn't
have to kill a pest in a grove that will never see viable
production again? Florida producers are all too familiar with
the harm that comes from an abandoned grove, abandoned by all
but the Asian Citrus Psyllid and the dreaded HLB disease.
Abandoned groves were a very significant reason for the spread
of HLB in Florida, and we already see the economic realities of
a lack of water causing some small and medium sized growers to
just cease to farming some groves in California!
Despite the daunting issues that faced us, most citrus
growers did well during the 2013-14 production season. A
manageable volume of fruit, good eating quality and excellent
export demand made for some outstanding net per-acre returns.
Some of the trade issues that had plagued us were seemingly
resolved and behind us, and there was money to pay for high-
priced water! 2014-15 started off with the same promise. The
maturity of the crop was early and initial demand overseas and
domestically was excellent. In mid-December of last year we
began to feel the impact of a slowdown at the west coast ports
that were a result of a dispute between the Ports and Union
that represented port workers. The slowdown came to a boil in
January and February, which just happened to be two of our peak
shipping months for exporting fresh citrus to China, Hong Kong,
Japan, South Korea, Malaysia, Singapore, etc. If there was a
container available, there was no guarantee that the fruit that
was shipped wouldn't wind up just sitting in the port container
yard or on a partially loaded ship waiting to be fully stacked
with containers before sailing. What normally was a 16 to 234
day voyage from shipping to the receiving port became as many
as 60 days. Many loads arrived with very heavy decay losses.
(Our Industry continues to work through the arrival claims)
As export shipments dwindled to one-quarter to one-third of
what was normal for that time of the season, the domestic
market was impinged upon by the extra packed fruit. Consumption
of fresh citrus in the U.S., while improving, has remained
relatively flat on average over the last decade or so. All that
can give way is the price and product movement, and it did.
Because of the resulting oversupply and export claims, we
expect net grower revenue from the shipper to be on average
one-third to one-half of last season's results. Just with
Orange Cove-Sanger Citrus Association growers, I estimate a
reduction in revenue of 2.4 million dollars, directly
attributable to the slowdown at the west coast ports.
Again, there is an unfortunate interrelation with effects
of the slowdown and the water situation. Water, if it is
available, is similar in price to last season, and in some
cases more expensive! In any case, there is less water
available than last season. Some, larger operations may be able
to move water and spread the cost (it's still not good for
them, either), but the smaller citrus producer will be hard
pressed to live within the means that the current season's
returns will provide. In some cases the bulldozers are moving,
in other cases citrus farmers are simply hoping against hope
that things will turn out better than anticipated.
Some of our key citrus markets are overseas. By virtue of
the fact that many of the countries that we ship to are also
fruit and citrus producing countries, they seek access to our
markets as well and given their cost of production, it might
seem like a pretty good deal for the American consumer. In some
cases, in order to force the issue, some of our ``trading
partners'' have put up some roadblocks, or at least detours in
our trading paths. One country that we have shipped to for
years excluded California Citrus for a time, and then after
imposing a very specific protocol and program, California fruit
was allowed back in. Recently after some shippers had fruit
arrive with the fruit condition that initially caused the
exclusion, an entire Central Valley county (shippers and
growers) were again excluded from the program and will have to
re-qualify through pre and post harvest handling treatment
protocol procedures and inspections of the fruit. Many of the
shippers involved in the secondary exclusion were also victims
of the port slow down, which no doubt exacerbated the problem.
Again, the dominos of cause and effect falling and the grower
suffers the loss. In a different case and a different country
(again, a destination that we have again shipped to for years
without incident) discovered a pest prompting an expansion of
pre and post harvest requirements in order to continue shipping
to that specific destination. Certainly, any country has a
right to (as we do) exclude pests from their own shores. It
must be said however that keeping up with all of the differing
protocols and requirements have become very burdensome and
expensive. Often, the large scale grower has ``people'' that
handle all of this. The small, individual farmer is his or her
``people''.
After hearing all of this it would not be unreasonable to
ask the question: ``Why would anybody want to continue farming
their small operations when they could sell out, take the money
and enjoy life?'' My wife and I ask ourselves that question
often, and we know we're in fine company. Candidly, the same
could be asked of many of the larger scale operators. Many have
exercised the exit option. If the current trends, threats and
challenges go unanswered and unabated, many more will do the
same. This would be a tragedy that we shouldn't allow! Less
than two percent of the population provides food and fiber for
the other 98 percent of the nation. How many more percentage
points can we afford to lose?
What can be done for us? How can this Committee help?
Farmers by nature are do-it-yourselfers. Specifically, the
California Citrus Grower is not interested in a handout and in
fact loath the thought of taking something that they were not
allowed to produce from the miracle that happens with a new
crop every spring and their own hard work. We would ask you to
support USDA programs that support the nation's citrus growers,
such as the Citrus Health Response Program (CHRP) and Multi-
Agency Coordination (MAC) group that promote research and drive
real-world solutions to insidious diseases like HLB. Please
work to protect growers that seek to export fruit into overseas
markets from disasters that occurred as a result of disputes
like the West Coast Port Slowdown. (Possibly some tax relief
for growers of perishable commodities that were damaged by the
afer-effects of the slowdown?)
We ask for your support of Trade Promotion Authority.
Without it, critical negotiations with some of our key export
markets may well stall. My understanding is that on average,
U.S. citrus exports to the countries included in the Trans-
Pacific Partnership can currently face tariffs as high as 40%!
Given that 35% of California's citrus crop is exported around
the world, access to these markets is vital to us! Please
create and carry out policies that allow a more practical and
balanced application of the Endangered Species Act as it
relates to federal water allocations in California. We need
legislation that will re-initiate California's development and
expansion of its water infrastructure. Relief from burdensome
and redundant regulation and reporting also could do much to
stimulate the well-being of the small to medium-sized citrus
producer. Obviously, while some are, not all of these issues
are within the purview of this Committee. That said, I'm sure
the Committee Members understand the interaction of all of
these stress points. Whether on this Committee, on another
Committee or on other legislation, we, the California Citrus
Industry, would ask that you consider these factors when
contemplating legislation, relief efforts and the cause,
effect, short and long-term consequences of such work.
Finally, I should comment on why do we do it? (Aside from
insanity!) We love it. Many of us sense that it we are doing
what we were created to do. Being connected to the land and
producing safe, nutritious and great tasting citrus fruit for a
hungry world is a privilege. That's why we do what we do!
Thank you for the Honor and Privilege of addressing this
Committee on behalf of the ``average'' California Citrus Grower
and the Industry we work within.
Respectfully:
Kevin Severns
N. Larry Black, Jr.
Testimony for the
U.S. House of Representatives Committee on Small Business
June 11, 2015
Challenges for Small Florida Growers
Chairman Curbelo and Ranking Member Meng, Good morning, I
am Larry Black and I appreciate the opportunity to speak on
behalf of the 6,000 Florida Citrus Growers. I am the current
President of Florida Citrus Mutual and General Manager of Peace
River Packing Company. My family settled in central Florida and
began growing citrus in the 1850s. Our company employs 185
Floridians and is the largest employer in the small community
of Fort Meade.
The citrus industry is a powerful economic engine
contributing $10 billion annually to the Florida's economy and
provides 62,000 jobs. The Florida citrus industry covers
515,000 acres and is the largest agriculture crop produced in
the state.
The industry is rich in traditions and is truly a way of
life for my family and many other multi-generational family
farms around the state.
At our industry's peak, just 12 years ago, we produced over
240 million boxes of oranges on just under 800,000 acres of
groves. Today, the USDA forecasts we will harvest only 96.4
million boxes of oranges, 60% less than our peak harvest.
Some of the decrease in acreage is due to the development
boom and a series of hurricanes in the last decade. The vast
majority of the production losses are due to Huanglongbing,
known as HLB or citrus greening. HLB is a bacteria that attacks
the vascular system of the tree that is spread by an insect
vector known as the Asian Citrus Psyllid. Neither HLB nor the
Asian Citrus Psyllid are native to Florida or the United
States. The psyllid was first detected in Florida in the late
1990's. HLB was first detected in Florida in 2005 and estimates
indicate over 90% of the trees in Florida are now infected.
HLB weakens and eventually kills citrus trees. The lower
productivity of the trees has forced growers to abandon over
130,000 acres of citrus groves. Growers are learning how to
extend the productive life of the infected trees, but
production costs have more than doubled due to HLB.
Orange juice prices have increased for consumers because
supplies are strained and the cost of production has
skyrocketed. Higher prices and competition from other beverages
has resulted in U.S. per capita OJ consumption being reduced by
50%. I am confident that consumption trends will reverse as
research delivers solutions that will increase yields on our
groves and the per-unit cost of production declines.
Growers knew early that HLB was a monumental threat to our
industry and a massive research effort began. Citrus growers
have taxed themselves and have spent over $90 million over the
past 9 years to fund research. The Florida State Legislature
has appropriated more than $20 million for the fight against
HLB. The 2015 Farm Bill authorized $125 million over five years
in citrus research funding through a competitive grant process.
On behalf of citrus growers across the country, thank you for
recognizing the need for a long term funding source for the
research needed to solve the HLB crisis that threatens the
citrus industries in Florida, California, and Texas.
Growers are working together to coordinate sprays to
control the psyllid that spreads HLB. Antimicrobials and heat
therapy appear to be possible near term solutions to improve
the productivity and extend the life of our trees. Plant
breeders are working to develop varieties of citrus and
rootstocks that are tolerant of HLB.
It is apparent a massive replanting of the citrus industry
is required in Florida. Economists estimate the Florida
industry needs to plant 20 million trees over the next 10 years
to reverse the decline and stabilize the Florida industry. Our
company has replanted over 350,000 trees over the last three
years using the latest technologies available. I am confident
we will bring these into production and will be rewarded for
the risk we are taking.
The USDA has authorized the Tree Assistance Program, or
TAP, to aid small growers with replanting efforts. The TAP
program is a cost share program that reimburses a portion of
the tree removal and replanting costs for trees lost to
disease. Two of the major brands that market Florida orange
juice have developed incentive programs to assist growers as
they replant.
Florida Citrus Mutual is working with our legislative
delegation to look at possible changes to the federal tax code
that will attract capital to our industry and aid growers with
their replanting efforts.
Under present tax law, citrus growers are required to
capitalize the costs of developing a citrus grove for four
years, including the year trees are planted. After the trees,
labor, fertilizer, spray, and other costs incurred are
capitalized for this four years pre-productive period, the new
grove is depreciated over a ten year period.
Florida Citrus Mutual proposes to change the tax code to
allow growers to immediately expense the grove development and
acquisition costs in the year the costs are incurred. The
proposal would sunset the tax code changes after ten years. The
change would provide an incentive to growers with minimal costs
to government.
The citrus industry is a core part of America's
agricultural heritage. 62,000 Floridians produce a nutritious
product that is part of a healthy diet. The industry is
comprised of small family farms and associated businesses. The
industry also supports many associated businesses, ranging from
vehicle and farm equipment dealers, banks, insurance companies,
etc. Our industry has experienced challenges before, most
weather related. I am confident our industry will manage
through the current crisis and emerge as an even stronger
industry. Again, thank you for your support funding the much
needed research. Please consider incentives for growers to
replant and other assistance to growing small businesses as
they emerge from this crisis.
Thank you.
Testimony of
Dale Murden
President
Texas Citrus Mutual
United States House of Representatives
Committee on Small Business
Subcommittee on Agriculture, Energy and Trade
Washington, D.C.
June 11, 2015
Thank you, Mr. Chairman and members of the Committee. On
behalf of the over 400 commercial citrus growers in Texas, I
want to express my deep appreciation for convening this hearing
today to learn more about the challenges facing the U.S. citrus
industry and all our many small, family-owned, growers.
My name is Dale Murden. My family and I currently grow
citrus and raise cattle on 250 acres near my hometown of
Harlingen, Texas. In addition to being President of Texas
Citrus Mutual, I am also a current member of the Board of
Directors of the Texas Farm Bureau, Texas Grain Sorghum
Association and Delta Lake Irrigation District.
The Texas Citrus Industry is comprised of almost 27,000
acres across a three-county area in the Lower Rio Grande
Valley. Together, our growers produce more than 9 million
cartons of fresh grapefruit and oranges each year and another 5
million cartons of juice fruit.
Texas is the third largest citrus producing state behind
California and Florida. The Texas fresh commercial fruit market
is valued at $100 million and the juice market is valued at $8
million. We also have close to 1,000 acres dedicated solely to
organic production, which is valued at $5 million. Texas A & M
University economists estimate that the total business activity
supporting Texas citrus production is almost $200 million
annually. I know this pales in comparison to my larger
counterparts...but to my fellow growers, it's worth fighting
for.
Currently, the industry employs up to 3,000 workers in a
normal producing year, which culminates with a harvesting
period from October to May.
In my own small operation, my family and I supply all the
labor except in extreme cases when weather or pest and disease
presence dictate otherwise.
My testimony today will focus on two critical and pressing
issues facing growers in the Rio Grande Valley; I will discuss
the potential economic devastation due to the invasion of the
Mexican Fruit Fly from south of the border, as well as the
rampant spread of Huanglongbing (also known as HLB or Citrus
Greening), a disease that is capable of wiping out the entire
US citrus production unless we can find a cure.
What sets Texas apart from my colleagues in California and
Florida who are also facing many of the same issues is our
proximity to Mexico and its porous border and the backyard
citrus in our region. USDA has estimated that there are
conservatively over 750,000 citrus trees in backyards and
private homes Valley-wide. We all love our lemon and lime trees
and are very proud we can grow them, but these trees pose a
very significant threat to the commercial industry and, when
left untreated, provide a safe harbor for fruit flies and the
Asian Citrus Psyllid (ACP).
The Mexican fruit fly--or MexFly--is a fly originally found
in parts of Mexico and Central America that has now spread
beyond the border into the lower Rio Grande Valley of Texas.
The MexFly is especially problematic for oranges and
grapefruit, which are extremely susceptible to infestation and
economic losses resulting from direct damage caused by the
larvae that feed on the fruit pulp. Since 1986, Texas has
participated in a fruit fly control program headed by USDA-
APHIS, culminating in a multi-pronged initiative in 2007 to
eradicate the fruit fly from Texas and the Mexican state of
Tamaulipas. In 2012 we thought we had successfully eradicated
the MexFly but recently--due to continued violence along the
Texas-Mexico border, aging USDA rearing facilities and the
untreated backyard citrus trees, the MexFly has been found once
again in our region.
The MexFly is not just an annoying pest--for hundreds of
citrus growers in Texas, a discovery of a MexFly in your grove
results in a full government quarantine of the immediate area,
which means no fruit can be sold resulting in significant
economic loss for the grower. For example, this year proved
especially hard for one ``pick-your-own'' operation after a
Mexican fruit fly was found in a neighboring back yard tree.
The discovery triggered a quarantine and the growers was no
longer able to harvest his crop for the year, leaving thousands
of dollars of inventory on the trees with no hope for harvest.
The problem is now reaching crisis levels, since January 2014,
there have been fruit fly quarantine areas off and on in the
entire citrus growing region of South Texas.
The best solution we have for combating MexFly is a
stronger, more effective sterile fly program run by USDA-APHIS.
The agency needs to devote significant resources to upgrading
sterile fly production facilities and, perhaps more
importantly, they need to provide better management of the
existing resources.
While the Mexican fruit fly poses a real and immediate
threat, the recent finds of HLB--or citrus greening--has
growers of all sizes in south Texas extremely concerned. There
is no know cure for this disease and we've learned from our
friends in Florida that this disease is deadly serious...and
means business.
Greening was first discovered in a Texas grove in January
of 2012. Three short years later, we have confirmed that 417
residential trees and 846 commercial trees located in almost
100 groves valley wide show signs of the disease. And with the
extremely long latency period of this disease, it is unclear
how many more trees have already been infected.
What this has done to growers in terms of dollars is hard
to quantify. When it was first discovered in Texas, we removed
not only infected trees, but several of the surrounding trees
as well. That translated to lost income, and with no
replacement trees to plant, it also equated to a loss of future
income as well.
Today, positive HLB finds have become so widespread, that
most growers have discontinued tree removal. As such, it has
quickly become a numbers game, and a point of diminishing
returns that keeps spreading throughout the industry as fast as
this disease can infect neighboring trees.
In a desperate attempt to mitigate the effects of HLB, most
growers have initiated psyllid spray programs to try to slow
the spread of infestation until a cure can be found. This
strategy is in addition to our regular care programs and has
increased our grove care expenses by almost $400 per acre or
22%. I haven't had a 3% cost of living increase in years, much
less 22%.
Even with all of these preventative strategies in place,
Texas still has pockets of untreated groves, as well as the
backyard trees, that continue to pose a significant threat to
the industry. For these reasons, Texas recently created a
special entity under the Department of Agriculture to
specifically address HLB through a program that is being
tailored after the boll weevil eradication program in the
state. The industry plans to hold a referendum to assess where
we stand on a valley-wide psyllid suppression program, which
would impose additional costs on the many growers--large and
small--throughout the Valley. Some estimates have projected
program costs as high as an additional $80-$100 per acre.
Federal investments in HLB research and ACP eradication
programs are critical to the survivability of the citrus
industry in the U.S., as such, we have requested full funding
under two high priority citrus programs: the Citrus Health
Response Program (CHRP) and the Huanglongbing Multi-Agency
Coordination (MAC).
The Citrus Health Response Program is a critical source of
funding for the exclusion and eradication activities associated
with the Asian Citrus Psyllid. The funds have been used in
partnership with other state agriculture departments and citrus
industry groups to research, survey and combat both the pest
and disease.
The Huanglongbing Multi-Agency Coordination was started in
2014 when Congress authorized funding to develop solutions for
the control and eradication of ACP and HLB. It is vital that
this current funding be continued to ensure scarce federal,
state and industry funds are allocated to those projects with
the highest likelihood of developing a cure for this
devastating disease without unnecessary setbacks or duplication
of efforts.
I'd like to thank you for attention today on these dire
issues. In short, the United States citrus industry as you know
it, is in extreme trouble. We are fighting to preserve our very
way of life and are doing everything in our power to prevent
total eradication of an essential U.S. industry. With agency
collaboration and much needed support, it is our hope that we
will soon be able to eradicate ACP and HLB from our vocabulary
entirely.
Thank you again, Mr. Chairman, for holding this important
hearing and for all that you and the Committee are doing. We
look forward to working with you in the future.
Squeezed: Current Challenges for Small Citrus Operations
Hearing
June 11, 2015
Subcommittee on Agriculture, Energy and Trade
U.S. House of Representatives
Statement of Dr. Michael E. Rogers \1\
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\1\ [email protected]; 863-956-5897; www.crec.ifas.ufl.edu
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Interim Director and Associate Professor, Citrus Research and
Education Center,
Institute of Food and Agricultural Sciences,
University of Florida,
700 Experiment Station Road, Lake Alfred, FL
Chairman Curbelo, Ranking Member Meng, and members of the
subcommittee, thank you for the opportunity to speak to you
today about citrus greening, the impact this disease is having
on citrus production, and the prospects for potential research-
based solutions.
My name is Michael Rogers and I am an associate professor
of entomology at the University of Florida where I serve as
interim director of the Citrus Research and Education Center
(CREC) near Orlando, the largest research center in the world
dedicated to one crop, Citrus! The mission of the CREC is
``...to discover and deliver innovative solutions that empower
citrus and other agricultural interests to conduct responsible
and profitable business. CREC fosters scientific excellence and
efficient use of resources.'' With that charge, scientists from
CREC and throughout UF/IFAS, along with researchers from other
citrus producing states and countries, are collaborating to
solve the most devastating disease of citrus worldwide, citrus
greening disease.
Also referred to by its Chinese name Huanglongbind (HLB),
citrus greening was first documented in Asian countries in the
late 1800's. Prior to the discovery of citrus greening in
Florida in 2005, very little was known about this disease and
that lack of knowledge made commercial citrus production
economically unfeasible in those countries where the disease
was present. In the absence of citrus greening disease, the
state of Florida and the country of Brazil were the global
leaders in orange juice production.
Citrus greening disease is caused by a bacterium that is
spread tree-to-tree by an insect known as the Asian citrus
psyllid. When a psyllid carrying the bacteria feeds on a citrus
tree, it ``injects'' the disease-causing bacteria into the
vascular system of the plant. The bacteria then move throughout
the plant, increasing in number, over time destroying the
vascular system in both the above ground parts of the tree and
the below ground root system that supports overall tree health.
As the vascular system is weakened, the health of the tree
begins to decline with the trees dying a slow death. Long
before the trees completely succumb to the disease, citrus
fruit production is severely impacted. Much of the fruit on
diseased trees is reduced in size and quality, making them
unusable for processing for orange juice or for sale as fresh
fruit. After a tree has been infected for several years, the
continued deterioration of the root system results in trees
being unable to hold most of their fruit load and the
potentially harvestable fruit that growers have spend thousands
of dollars per acre growing, drops to the ground just before
its ready to be picked. Currently, this is the situation for
the majority of the mature fruit-bearing citrus groves in
Florida. As a direct result of greening disease, the 2015 all
orange harvest is predicted to be 96.4 million boxes of fruit
\2\. This is down from 240 million in 2003 and is the smallest
Florida orange crop since 1966.
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\2\ Citrus Forecast (May 2015), USDA-National Agricultural
Statistics Service. http://www.nass.usda.gov/
Statistics--by--State/Florida/Publications/
Citrus/cit/2014-15/cit0515.pdf
When citrus greening disease was first found in Florida in
2005, management programs were adopted by growers to slow the
spread of the disease until a sustainable long-term solution
could be developed. The approach implemented to manage greening
included use of insecticides to control the insect which
spreads the disease, removing infected trees from groves
because they served as a source for continued spread of the
bacteria, and where trees were removed, replanting with trees
grown in certified disease-free nurseries. Adoption of these
practices increased the production costs for Florida citrus
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growers from $800 per acre to more than $2,000 per acre.
By August 2008, citrus greening disease was confirmed to be
present in every county located within the primary citrus
growing region of Florida. Since that time, the disease has
spread to very commercial citrus grove in the state, infecting
most, if not all, of the fruit-bearing trees at present. One of
the difficulties in managing this disease is the fact that it
can take several years from the time a tree is infected until
visible symptoms are apparent. It's likely that much of the
disease found by 2008 occurred before citrus greening was
confirmed to be present in Florida and any management programs
were implemented.
Now that most of the citrus trees in Florida have greening
disease, growers have made changes to their management programs
in attempts to remain in business as long as possible. Removal
of diseased trees is no longer a viable option in most
situations. Instead, growers are attempting to maintain the
health of these infected trees using improved fertilization
programs. These improved fertilization programs appear at best
to only slow the rate of tree death, but do little to prevent
fruit drop prior to harvest.
Since the discovery of greening in Florida ten years ago,
all citrus research programs in Florida, along with citrus
researchers from other states and countries, have shifted their
emphasis to finding a solution to citrus greening disease.
Important research-based advances have been made that have
provided growers with the tools needed to slow the rate of
spread of this disease and remain in business to date. These
advances include improved efficacy and cost-effectiveness of
psyllid management programs, and improvements in tree care
through adjustments made to plant nutritional and root health
programs. However, simply put, these improvements are just a
bandage on a gaping wound. They won't solve the problem, but
instead serve to slow the bleeding.
One question I am constantly asked is ``Why is it taking so
long to find a solution to greening?'' The reason is this is a
very tough disease to work with. Our research began with
minimal accurate information on this disease. This is
complicated by the fact that the bacterium that causes the
disease had not and has still not been grown in culture in the
laboratory to date. The inability to grow the bacteria in the
lab greatly limits the research that can be done to find a
cure. Furthermore, a thorough understanding of how the disease
develops, from start to finish, is required to develop ``the
cure.'' In the case of citrus greening, this is a disease of a
perennial crop that takes years to progress through the disease
cycle. Compared to an annual crop such as wheat or corn where
you can study a complete disease cycle in a matter of months,
studying the disease cycle in a citrus tree takes years. This
increases the time to get results and requires lots of funding.
Despite these challenges, scientists have made tremendous
advances in our understanding and management of this disease.
We have learned more in the past 10 years than in the previous
100+ years this disease has been present in other countries. It
should be acknowledged that the Florida citrus growers deserve
the credit for these accomplishments that would not have been
possible without the $90+ million in research funds they
provided over the past 10 years through self-imposed taxes on
their production.
The most important scientific breakthroughs that hold
promise for developing a long term solution to greening disease
are molecular based. The genomes of the psyllid, the greening
bacterium, and citrus itself have all been sequenced. With this
information in hand, researchers are now able to target
specific genes required for survival of both the insect and the
disease-causing bacterium. For example, researchers have used
such approaches to successfully control psyllids by interfering
with their ability to fly and feed on plants, thus preventing
the insect's ability to spread the disease. Genes have also
been identified that could potentially provide resistance to
the disease-causing bacteria. Citrus trees with these genes for
resistance are being tested in field trials and the results to
date looking promising.
While there are many potential research solutions being
developed that hold promise, putting that ultimate answer in
the hand of growers is still years away. If we had a citrus
tree today that we knew for certain was resistant to this
disease, it would take 2-3 years to scale-up commercial nursery
production of that resistant tree for purchase by growers. If
the resistant plant happens to be a GMO, the regulatory red
tape adds even more time to make that a reality. Once a grower
is able to plant trees resistant to the disease, it will take
at least 4 years for those trees to being producing a
harvestable crop, and additional years beyond that time to
recover the costs required grow the trees to that plant. This
is a discouraging prospect, especially for the small citrus
grower who is currently struggling to stay in business.
However, research that has been conducted since greening
arrived in Florida is now providing exciting new potential
solutions for living with this disease in the short term while
work continues on the potential long-term solutions that hold
promise. Through the efforts of plant breeders at the CREC and
the USDA, new citrus rootstocks and scions (hereafter in this
testimony referred to collectively as varieties) have been
developed that appear to be tolerant to citrus greening
disease. These plants are described as tolerant because while
they may become infected with the greening bacterium, field
studies have shown they will survive and produce fruit for a
longer period of time in the presence of greening compared to
varieties previously grown in Florida. To date, 18 of these
potentially tolerant varieties have been made commercially
available for growers to use in replanting their groves.
Should those replanted trees become infected with greening,
a new approach to rehabilitate diseased trees has been
developed. Known as thermal therapy \3\, researchers at the
CREC have designed machines to rapidly cover trees in the field
and apply steam to kill the bacterium in the above ground parts
tree. While the steam treatment does not completely cure the
disease, it extends the life of trees, buying additional years
of positive crop yields for the grower.
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\3\ http://bit.ly/citrussteaming
Progress has been made developing other tools that could
soon be used in the near-term for managing greening disease.
Examples include the development of compounds that can be
applied to the threes to kill the bacteria in the plant.
Numerous bactericidal compounds have been screened in
laboratory and greenhouse trials. The most promising candidate
compounds are now being tested in field trials as possible
tools that can be used by growers to reduce or eliminate the
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effects of the disease.
As previously mentioned, the majority of fruit bearing
trees that are providing income to Florida growers are infected
with citrus greening disease and have been for a number of
years. As diseased trees are removed, growers must replant new
trees in their groves to maintain continuity of production
until better solutions are developed. The availability of
tolerant varieties, thermal therapy, and other short term
solutions under development will play an important role in
providing that needed continuity of production. For the grower,
time is not on their side. Growers are in desperate need of
assistance to maintain their operations. Citrus research
programs are also being negatively affected by the reduction in
fruit yields. The research funds provided by the self-imposed
grower tax are drying up, thus threatening to impede the
progress of the promising research that must be continued to
provide solutions for this disease.
Fortunately, the availability of new federal research
funds, specifically the USDA-SCRI and USDA-APHIS-MAC programs,
are providing additional support for research on citrus
greening. A sincere thank you to those who helped provide this
needed funding through the Farm Bill. A large majority of the
funding provided this past year went to support research
projects at the CREC. While these funds will provide needed
support for some very promising research projects, there are
still gaps in funding that exist for many promising areas of
research previously funded by the citrus grower generated tax.
Your financial support for further research is crucial for
the future of citrus growers not only in Florida, but
throughout the entire county. Land-grant universities in every
state are dedicated to serving the public, and federal research
dollars are crucial for universities to continue their research
to benefit economic development.
I appreciate the opportunity to address the committee and
bring to your attention these important issues facing the
citrus industry. I extend an invitation to any of the members
who are interested, to please contact me to arrange a visit to
the CREC to witness first hand the effects of this disease and
the research underway to develop solutions to this problem.
That concludes my formal statement and I am happy to answer
any questions you may have.
Thank you.
[all]