House Agriculture & Livestock – July 17, 2018

The House Agriculture & Livestock committee met on July 17^th, 2018 to take up interim charges related to the Texas Department of Agriculture’s and the Texas Animal Health Commission’s role in the response to Hurricane Harvey, the Texas olive and olive oil industry, the Seed Certification Program, the uses of industrial hemp and the economic feasibility of developing an industrial hemp market.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Review the Texas Department of Agriculture’s and the Texas Animal Health Commission’s role in the response to Hurricane Harvey. Examine the short term and long-term economic and agricultural impacts to producers in the agriculture and livestock industries in Texas as a result of Harvey. Identify ways to mitigate the impact and prevent substantial losses from Harvey and future natural disasters.

Jason Fearneyhough, Texas Department of Agriculture

• Gave a brief overview of damages suffered by Texas because of Harvey
• Texas A&M estimates $200 million in damage to the agriculture industry
• TDA is not a first responder, but instead a support service to other agencies that may require help
• Opened a hay service hotline for farmers & began a mosquito control response due to the large number of mosquitos present in the aftermath of Harvey
• Worked with USDA national organic program to insure exemptions and protections for organic farmers located in the area, usually a spray like that could void their organic status
• Our biggest impact on Harvey was the food and nutrition program, we were able to shift the resources from feeding school children to feeding the affected population
• Launched interactive online map as a resource for people to use to find food distribution sites, which resulted in 8,000 cases of food to those in need
• Community development block grant was also employed totaling $4.4 million in 15 communities to help those impacted
• The food translates to roughly $232,000, appreciates HEB’s assistance with this
• Gonzalez – Are you doing the work to institutionalize some of the projects and programs you created to benefit Harvey?
  • We have. The leadership looked at what we could improve on, we want to insure functionality across administrations no matter when it changes. We want maximum efficiency from our staff.

 

Andy Schwartz, Texas Animal Health Commission

• We are not first responders, but we are planners & responders to coordinate animal response programs
• TAHC develops relationships with veterinarians to aid in disaster relief efforts
• In advance of the hurricane, we set up animal protection facilities to help give them relief from the upcoming storm, also used the 211 hotlines to direct owners where they can keep their livestock safe
• In total, 119 of our 180 employees were involved with our response efforts
• We waived our Coggins test requirements, Abbott agreed and granted a temporary waiver to insure horses could be moved without violating regulations
• Assisted in 16,000 head of livestock with either feeding or evacuation
• AHC plans to continue working with local agencies to develop further mitigation practices

 

Monty Dozier, Texas A&M AgriLife Extension Service

• We deployed 120 extension personnel to help the local agents with animal supply ports
• Received $1.3 million in donations of food and other items to aid animal relief
• Largest agricultural losses were in the cotton industry, $93 million loss in livestock and accompanying materials/structures for livestock
• Helped with car seat deployment in the aftermath of the storm – anyone who lost their vehicle also lost the accompanying car seat in that vehicle
• Helped identify road & bridges that would need repairs, also developed a well testing service to help treat those for bacterial contamination generated by Harvey floodwaters
• Hosted a series of emergency agricultural losses meetings across impacted areas

 

Patrick Tarlton, E.D. of Texas Deer Association

• Reviewed the damages to the deer industry because of Harvey
• Hopes to develop a formal emergency response plan to the deer farming industry in Texas to help save more lives
  • Wants to be able to move animals into safe areas without the normal methods of traceability, and then deal with the paper trail in the aftermath
• Gonzalez – Is this a statute or rule change?
  • Something we could work alongside the agencies. It would probably need to be an MOU.
• Gonzalez – So during Harvey, you had trouble moving deer because of regulations?
  • We couldn’t open transfer programs fast enough to get the deer out.
• Burrows – Had transferability rules been changed, would we have seen less loss?
  • Just wants to develop a formal plan. So say next time we know there is a hurricane coming, we can begin moving animals maybe even a month in advance
• King – How did the 10 day rule impact your people?
  • We had fences blown over, acquiring the deer is a long process, it’s not as easy as rounding up cattle. Moving the deer to fulfill contractual obligations was quite difficult. Parks and Wildlife didn’t always approve the Governor’s waiver.

 

Glen Miracle, Laughing Frog Farm

• Our farm is operated like a prairie; we drained immediately and were working the next day
• We don’t plough, we use cover crops, we rotate animals. We believe this can be done on a commercial, industrial level
• This is not new technology; our current farming methods are 1950s technology
• There was a short-term loss initially, however after 20 years his profits have nearly doubled. You don’t make money initially because the microbiology needs a couple years to regenerate
• Urges committee to develop incentives for shifting to this kind of farming
• Brazos river floods because of what comes from pasture and vacant farms

 

Study the Texas olive and olive oil industry. Provide suggestions to improve, promote, and standardize the industry. Examine current policy related to the industry and examine factors such as research, marketing, labeling, standards, data collection, and the necessity of creating a commodity board or similar type of organization.

Michael Paz, president of Texas Association of Olive Oil

• Olive crops are understudied in Texas
• Essential that our association provides growers with the necessary tools for success and sustainability
• 38 growers of olives and 562 planted acres in the state
• We have 20% annual growth rate, totaling 400%
• Wants a direct relationship with elected representatives, believes the relationships will be beneficial for the industry to get on the same page
• Wants to create and adopt industry labeling standards, specifically for extra virgin olive oil
• 98% of olive oil is imported, of the 2% produced in the US majority comes from California
• King – How is the price of domestically produced olive oil relative to imported?
  • $1.75 for 200 ML from Walmart. For the same product purely produced in Texas, I’d anticipate between $12.75 and $16.75
  • We just can’t compete with the much larger companies who source from 6 or 7 different locations
• Wants to see a similar result to the Texas wine industry, a level playing field

 

Jim Henry, Texas Olive Ranch

• Olive oil industry is not profitable at this point
• Most important issue is truth in labeling. Specifying domestic oils from imported ones
• Growing olives in Texas is dependent on weather, a lot of emerging research in the area
• Wants to see studies, a unified organization that represents all the olive farmers in Texas

 

Monte Nesbitt, Texas A&M AgriLife Extension 

• Established a coordinated study on olive varieties in the state
• Our goal was to study varieties and performance measures in relation to weather and other factors
• We believe long term study and consistent production is essential to this industry
• Stability and consistent production are a challenge to us

 

Review the Texas Department of Agriculture’s Seed Certification Program and related areas. Consider any benefits or drawbacks to privatizing the program through a nonprofit crop improvement association.

Jason Fearneyhough, Deputy Commissioner Texas Department of Agriculture

• Gives brief overview of seed certification currently
  • Value of commercial seed production at the farm level is $217 million dollars
  • 65,000 acres are inspected every year, totals 15 million pounds of seed that we are certifying each year
  • This is all done through 35 inspectors, each crop requires 40 to 100 hours of training to receive certification
• Fees have been raised significantly, had been funded at GR however we have since lost that. We are down to one revenue source to run this program, and that is fees
• Burrows – Wants to know about expenses, have they stayed the same since 2012? Wants a walkthrough.
  • 2012 budget was $889,000. In 2017, $868,000. Projected to be $840,000-$850,000 in the coming years.
• We can reduce the fees if we get some alternate funding back. References the lack of GR funding
• Anderson – Wants to make a recommendation to alter the way we fund TDA
• Gonzalez – At what point will the fees plateau, and is the agency sustainable for the next 5-10 years
  • I believe its sustainable. I cannot promise we won’t raise fees again. Those tools allow us to take leftover money at the end of the fiscal year and roll it over. I also can’t move money amongst my own programs.
• Gonzalez – Wants to see the agency prove to Senate Finance that they deserve to have this privilege reinstated. The relationship needs to be improved with the people who do make these decisions.

 

Bryan Gench, Texas Seed Trade Association

• We don’t view this as a strict regulatory program, it is voluntarily entered
• Intellectual property owners require certification, and when shipping seeds internationally they also require certification (OECD).
• Worked with legislature to increase fees by 20%-25% voluntarily, we were successful in this endeavor to save the programs without the TDA’s help
• We incurred 151% fee increase in seed certification and verification of seed quality
• We don’t have an issue with the way TDA does things, our issue is with cost. Eventually the cost doesn’t justify the certification
• Higher the fees go, the less people we have participating in a voluntary program
• 36 other states certify privately, its been 40 years since the crop improvement association has been formed
• Seed law hasn’t been looked at since its inception in 1938
• This was a great program while it was subsidized, but since then it is the most expensive state now to certify seeds
• We have a strong desire to make this movement private
• King – What kind of money are we talking about when fees increase 150%?
  • It’s not uncommon that it equates to a full-time position at an executive level, roughly $40,000-$60,000. Larger companies spend 2-3 times that much
  • Most common certified crops are wheat and peanuts
• Concerned about the long-term viability of this program if it stays the responsibility of TDA
• With advances in plant genetics, seed certification is an ever-changing process. In order to keep up with the tech, they will be passing their costs on to us via fees
• We believe that by using contractual services we can save a substantial amount of money
• Also concerned about TDA’s ability to keep up with the technology and the associated costs that will undoubtedly follow with it
• Burrows – Have you came up with a number for how much this might cost you?
  • We think we can do it for about 50%-60%
• Stucky – How does being a border state impact this?
  • All the other border states are less expensive, however it would be on an individual crop basis. If you average these numbers, we are still higher than California who is widely regarded as one of the most expensive seed certifying states
• Our producers are choosing to certify in other states, which is something they would rather not do
• Cyrier – What kind of time window are we looking at if we adopted something like this?
  • Earliest it could happen if we are successful with out proposed legislation on September 1, 2019.
• King – Would any of the current inspectors be willing to move over to this program?
  • Haven’t talked to them. Spoke largely with retired inspectors

 

David Drinnon, Richardson Seeds Company

• Roughly 80% of the Sorghum comes out of the Texas panhandle
• Primary concern is the onerous fees our business incurs, we spend the equivalent of a salary on certification
• King – Expected that it was significant, however didn’t know it was such a large number.

 

Bill Rogers, Wilco Peanuts

• Peanut production is second behind wheat, roughly 20,000 acres of peanuts are certified
• Largest concern is the feedback I get after the inspections, shares story about rejection of certification and the lack of timely feedback to the seed industry
• King – When was the inspection done?
  • September, they didn’t get the results back until December
• Issue is that rejected seeds contaminate healthy seeds and storing the two together is a costly mistake. Farmers don’t know that they’ve been rejected until its too late
• Burrows – This isn’t an easy decision. You’re under the impression if we privatize it’ll be better and cheaper?
  • It’ll be more streamlined

 

Brent Batchelor, Turfgrass Producers of Texas

• Small organization, only 70 members
• Turf grass is also impacted by this program, pretty much all the turf in Texas comes from our members

 

Review the rules, regulations, and enforcement authority of the Texas Department of Agriculture’s Structural Pest Control Service.

Todd Kercheval, Texas Pest Control Association

• We have made great progress with the TDA, although its not over yet we are actively getting closer to our end goal
• King – Can you shed light on recent legislation?
  • Regulating advertising. We didn’t exactly agree, we got it to the governor’s desk who then determined that the legislation was not needed.
• King – You said you’ve seen improvements with TDA?
  • Yes, they are trying to do what they can where they can.

 

Dale Burnett, President of Texas Pest Control Association

• Two basic issues with TDA
  • First is issue of enforcement when the agencies were merged, however in the last 18 months we’ve seen TDA become more methodical in its approach
  • Communication between TDA and the public was also poor. When TDA proposed regulations, it was incredibly misleading (appeared as all new legislation)
• Statistics given to the LBB can be misleading
• Because of the nature of our business, we are in every part of people’s homes which is why criminal background checks are so vital in this industry

 

Phillip Wright, Administrator for agriculture and production TDA

• TDA conducts CBCs on all industrial pest control employees
• The type of licenses we issue are commercial applicators, noncommercial applicators and apprentices

 

Evaluate the uses of industrial hemp and the economic feasibility of developing an industrial hemp market under existing or future state and federal regulations. Examine the processing and manufacturing process requirements of multiple bi-products, including feed, food, fiber, cosmetics, supplements, and building materials.

Jonathan Miller, US Hemp Roundtable

• Kentucky Congressional representatives & state legislature worked to ensure legality of hemp growth, assured that hemp could be cultivated if low in THC (<.3%)
• Estimates roughly a $2 billion industry by 2020, 100s of jobs have been created in processing, etc. in Kentucky
• US Sen. Mitch McConnel introduced bill to legalize cultivation of hemp, 2018 farm bill has passed both Senate & House, expecting conference committee work within the next few days
• Confident that bill will pass at federal level, but states can still restrict the cultivation; Miller urges state legislature to follow other 40 state who have legalized cultivation of hemp
• Does not have model legislation, but highlights 2018 farm bill; Texas should look at hemp definitions in bill that could allow proper state regulation
• In January of next year, US Hemp Roundtable will be involved in creation of entity that certifies                 hemp products as legal & safe
• Chair King – Assuming that the farm bill passes & hemp provisions stays in tact at federal level, your position is that states should still pass legislation?
  • Yes, bill is designed for state regulation
• Stucky – Are the fields in Kentucky tested for <.3% THC content?
  • Yes, there are exceptions for negligence, etc., but there are criminal penalties for intentional cultivation of marijuana
  • Need to reach 1% THC for intoxicating effect
• Stucky – Asks after cross-pollination from potentially having marijuana crops hidden in hemp fields
  • Hemp cross-pollination will dilute and ruin the marijuana crop
  • Could pose challenges to hemp crop, but only illegal actors would do this
• Anderson – What are the challenges for the hemp crop?
  • Possible that marijuana could bring hemp up to slightly higher THC levels
• Anderson – Could there be individuals who kid be intoxicated from hemp due to age, size, etc. variations
  • Can have variations, but <.3% will not intoxicate anyone; standards are international
• Rinaldi – How can you differentiate a hemp field from a marijuana field with GPS?
  • Hemp growing registrations are linked to GPS coordinates
• Rinaldi – If hemp were excluded from the federal controlled substances act, what state law would prohibit growth in Texas?
  • Most states have local versions of the controlled substances act defining any cannabis plants as marijuana
  • Texas does not have a hemp statute & hemp crops could be considered marijuana crops
  • Gray area, Texas does have hemp products available for sale
• Rinaldi – Would be helpful for committee to have some legal analysis on whether it would fall under any state law
  • If I were to grow hemp in Kentucky without registration, I would be committing a crime; must be done in partnership with state or University of Kentucky
  • Current farm bill allows for similar regulations via the state
• Rinaldi – So it is more allowing the state to establish a regulatory scheme to allow cultivation
• Gonzalez – Texas is a different growth market than Kentucky, in what ways could hemp growth affect research dollars and other crop growth in Texas?
  • Hemp farming act does not provide subsidies for hemp, does not impact any programs existing that apply to other crop types

 

Jeff Williams, US Hemp Roundtable

• Have heard concerns about cross-pollination between hemp and marijuana crops, there have been some instances where THC levels have risen above .3% & this would lead to crop destruction under regulations in the bill
• Is not aware of any disease from hemp crops that could affect other cultivated crops
• Gonzalez – Could you give me examples of diseases that hemp crops would need to be protected from?
  • None to my knowledge
  • No pesticides, etc. that are labeled for hemp usage currently
• Burrows – Have seen excitement of possibility of crop that could be grown in difficult conditions; I’ve heard conflicting reports of drought resistance and water needed to grow hemp
  • I’ve been told that hemp is a very resistant crop as well, hemp is a very efficient user of water; after a certain growth threshold, hem p does not consume much water
  • Needs to be some more work in this area
  • Many are looking towards Texas, personally believes this to be a farmer’s rights issue

 

Coleman Hemphill, Texas Hemp Industries Association

• Stucky – India has a fibrous type product that can be used to make bags, etc.; does hemp have a similar property that could be used in a similar way?
  • Yes, have researched this with University of Kentucky, hemp cellulose can be used in production of plastics
• Stucky – Would it be subject to degradation?
  • Many stores in Austin use a corn-based or other plant-based plastic, does break down
  • Many companies across the US are exploring hemp-based plastics
• Highlights that hemp crop pollination differs from marijuana pollination, hemp is self-pollinating & marijuana requires male and female plants

 

Shawn Hauser, Hemp Practice Group Vicente Sederberg LLC

• Hemp is the non-psychoactive part of the cannabis plant, thousands of uses in many industries
• Current form of the program under upcoming bill would allow Texas to submit regulatory scheme to the USDA & allow for state-regulated hemp growth
• Texas is uniquely positioned to take advantage of hemp cultivation; local cultivation could offset Texas’ need to rely on foreign hemp products
• Hemp can be more economically viable than other crop types like cotton

 

Jim Reeves, Texas Farm Bureau

• Gonzalez – Have you heard of concerns with hemp cultivation adoption?
  • Have not heard major concerns, if any
• Stucky – Is this something specific to a region of Texas?
  • Had resolutions from communities out of West Texas

 

Rick Trojan, Colorado Hemp Cultivator

• Cross-pollination turns high-THC crops into low-THC crops within two seasons, herbicides and pesticides are not necessarily used in hemp cultivation
• Burrows – Is there any risk of false-positives in drug tests with hemp?
  • No, all residues are washed away in processing
• Stucky – In Colorado is most of the crop dry land or irrigated?
  • Currently irrigated, got a 40% yield when crop was dry farmed

 

Richard Thornton, Patagonia

• Industrial hemp has potential to lower environmental impacts, promote small farms, and grow jobs
• Hemp cultivation improves soil health, hemp is a strong fiber that is easy to cultivate
• Many Texas farmers have the capacity and desire to grow Texas hemp, Patagonia has a commitment to buy locally, but is currently importing hemp from China
• Marijuana/hemp confusion can be overcome with outreach and education

 

Henry Valles, Texas Hemp Industry Association

• Highlights “hempcrete” as a building material, lightweight insulation that is mold, pest, etc. resistant; efficient, economic, and environmentally sound
• Sees hempcrete as a huge boon to building/development industry, would like to see building industry as a catalyst to help support hemp cultivation
• Anderson – Can the insulation qualities be used instead of the regular insulation?
  • Yes, acts as the insulation and weather protectant for the home, have seen insulative potential in his own developments
• Chair King – Asks Trojan, can you tell the difference between hemp and marijuana crop?
  • Yes, hemp is in tighter formations and crop format, high THC cannabis is more separate and “Christmas tree-like”

 

Coleman Hemphill, Texas Hemp Industries Association

• Hemp is a reduced timeframe crop as well, shorter timeframe naturally reduces liabilities and water consumption versus cotton, etc.
• Certainly a lot of room for advancement and research in how to utilize the hemp crop, though crop is resilient