Your source for CAWG and industry news
December 20 , 2018

January 29-31
Unified Wine & Grape Symposium, Sacramento

January 17
CAWG / Lodi District Grape Growers Joint Meeting, Lodi

January 30
Winegrape Growers of America Leadership Luncheon, Sacramento

February 26
CAWG Board of Directors meeting, Sacramento

April 10
CAWG Day in the Capitol, Sacramento

April 10
CAWG Foundation Wine Reception, Sacramento

April 11
CAWG Board of Directors Meeting, Sacramento

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The CAWG office will be closed Dec. 24, Dec. 25, Dec. 31 and Jan. 1. 
CAWG eNews will take a holiday hiatus next week and will return on Jan. 3.  CAWG staff wishes you and your families a wonderful, festive and safe holiday season. Thank you to all CAWG members for your support this year. Cheers!!
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It's Official! Farm Bill Signed into Law
President Trump earlier today held a signing ceremony for the farm bill ( H.R. 2 - Agriculture Improvement Act of 2018). Among those joining him were House and Senate Agriculture Committee leaders and USDA Secretary Sonny Perdue. "We're here to celebrate a really tremendous victory for the American farmer," Trump said in his opening remarks. "[It's] a big deal for agriculture, a big deal for the U.S. economy, ag economy, for food security and national security," Perdue said.  This was the first time since 1990 that a farm bill was enacted the same year it was introduced.

Substitution Drawback Final Rule
On Dec. 18, the U.S. Treasury and Customs and Border Protection (CBP) published a final rule in the Federal Register that substantially restricts the substitution drawback program, sometimes referred to as "duty drawback" or "double drawback."
CAWG has a history of interest in the substitution drawback program. Supporters of the program contend substitution drawback is a subsidy that promotes wine exports. Critics of the program contend the drawback program allows imported wine into the U.S. without having to pay alcohol excise taxes, putting domestically produced wine at a competitive disadvantage. The reality is the substitution drawback program is complicated and its effects on California winegrape growers is a mixed bag. The program is neither exclusively a subsidy for imports nor exports, but in fact is a subsidy program for wine industry enterprises that both import and export wine.
Last September, CAWG submitted comments on CBP's proposal to substantially restrict drawback subsidies. A key flaw in the drawback subsidy program is the lack of data and transparency. In written comments to CBP, CAWG stated: "The lack of publicly available data on drawback subsidies claimed on the basis of wine varietal (cabernet sauvignon, chardonnay, merlot, sauvignon blanc, etc.), country of origin, destination country, price point and dates make it impossible to accurately assess which communities of growers are helped or hurt by this program. This lack of transparency is highly problematic because imported bulk wines compete with domestic growers of the same wine varietals."

Government Relations Report
A California court recently issued a decision clarifying that commute time does not constitute work time under California law. This decision is welcome news to employers that provide workers with a company vehicle.
In Hernandez v. Pacific Bell, the California Third District Court of Appeal held that when an employer provides a company vehicle to employees to use in traveling from their homes to their first customer appointments of the day and home from the last appointments of the day, that commute time does not constitute "hours worked." This decision affects dozens of industries, including agriculture.
For example, if the decision had gone the other way, growers or vineyard management companies that provide a truck for their workers' use may be required to pay wages for commute time driving to a vineyard. This decision may also help make it clear that when a grower provides transportation to migrant and seasonal workers, the work day begins when the workers arrive at the work site, not when they begin the commute. 
While this decision is definitely good news, please check with your legal counsel for how this decision applies to your company.

In two weeks, Mike Schaefer will be sworn in as a member of the Board of Equalization (BOE). Shaefer (D) defeated Sen. Joel Anderson (R) in a historically Republican district that covers all or parts of San Diego, Imperial, San Bernardino, Riverside and Orange counties. While several Democrats won traditionally Republican seats this year, this seat is most indicative of how voters made decisions in November.
Schaefer, a one-time Republican, is a perennial candidate who has run for several offices. He carries incredible baggage, such as being indicted and later acquitted as part of a Yellow Cab bribery scandal. The Los Angeles Times referred to him as, "one of California's most notorious slumlords." He was also convicted of misdemeanor spousal abuse. Additionally, he was disbarred in Nevada and hit with a restraining order (unrelated to the spousal abuse).
It seems that voters focused more on Schaefer's party affiliation than his checkered past. Nonetheless, his service on the BOE may be short-lived. Last year, Gov. Brown and state Legislature stripped the BOE of much of its power. This year, the Legislature is considering a constitutional amendment to eliminate the BOE altogether. 
Nonetheless, this race shows how very deep blue California has become.

-- Michael Miiller / / 916-379-8995 

Food and Farm Groups to USTR: Include Ag in US-EU Trade Talks
More than 50 U.S. food and farm groups -- including WineAmerica and American Farm Bureau Federation -- are urging the Trump administration to address ag issues in any free trade agreement negotiations between the U.S. and the European Union (EU). "An agreement that eliminates tariffs and quotas and removes all non-science-based regulatory barriers would cause an exponential increase in U.S. food and agriculture exports, create new jobs and eliminate the absurd trade deficit in food and agriculture that the United States has with the EU," the groups wrote in a Dec. 18 letter to U.S. Trade Representative Robert Lighthizer. According to the letter, the nation's trade deficit in food and agricultural goods with the EU has grown from $1.8 billion in 2000 to nearly $11 billion last year.

TTB Expands AVA in California
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is expanding the 18,240-acre Arroyo Seco AVA in Monterey County by approximately 90 acres. The final rule is effective Jan. 14, 2019. Both the Arroyo Seco AVA -- established in 1983 -- and the expansion area are located within the Monterey AVA and the larger Central Coast AVA.  The rulemaking was in response to a petition submitted by a vineyard owner whose vineyard is located within the expansion area.

E. & J. Gallo Winery Earns Spot on 2019 Best Places to Work List
Congratulations to CAWG member E. & J. Gallo Winery for being ranked No. 37 on Glassdoor's Best Places to Work in 2019 list (1,000 or more employees). This is the company's third straight year on the list, part of its Employees' Choice Awards, which are based on the input of employees who voluntarily provide anonymous feedback about their job, work environment and employer. Glassdoor is one of the world's largest job and recruiting sites.

USDA Pesticide Residues Report Shows No Food Safety Concerns
More than 99 percent of commodity samples tested in USDA's Pesticide Data Program (PDP) had pesticide residue levels well below the tolerances set by the EPA. In addition , 53 percent of samples had no detectable pesticide residues. The PDP tests a wide variety of domestic and imported foods; of the 10,541 samples collected for the report, 83 percent were fresh and processed fruit and vegetables.


Highlights from Dec. 11 Lodi Vineyard Mechanization Showcase.
Stockton Record, Dec. 16

A three-part series about invasive pests, the efforts of Customs and Border Protection inspectors to prevent them entering the state, and the Plant Quarantine Law of 1912.
KALW Public Radio (SF), Dec. 17


Congressional leaders reached a short-term spending deal Wednesday that effectively punts most of the contentious funding decisions into the new year.
Sacramento Bee, Dec. 19

Southern Californians could lose billions of gallons of water a year to Central Valley farmers under a deal Gov. Brown's administration has struck with water officials working for President Trump.
Sacramento Bee, Dec. 15

DWR and the Bureau of Reclamation reached agreement on updating how the State Water Project and Central Valley Water Project are operated to meet environmental regulations.
DWR press release, Dec. 14

Seminar: Lowering Your Farming Risk with Crop Insurance
Several Lake and Mendocino agricultural organizations are co-hosting a crop insurance seminar where growers can listen to experts about how crop insurance can be used to help lower farming risk. 
Presenters include representatives from Pan American, CAWG, USDA Farm Service Agency, USDA Risk Management Agency and NAU Country Insurance.
WHEN: January 8 / 9 to 11:30 a.m.
WHERE: The Lodge at Blue Lakes, Upper Lake

SAVE THE DATE!  CAWG / Lodi District Grape Growers Joint Meeting
Join CAWG and the Lodi District Grape Growers for a meeting about winegrape grower contracts and enforcement, plus the role of the California Winegrape Inspection Advisory Board. 

Speakers include Dale Stern of Downey Brand, CDFA Market Enforcement Branch and John Gilstrap, California Winegrape Inspection Advisory Board.
WHEN: Thursday, Jan. 17
8:30 a.m. -- Registration, coffee and pastries
9:00 a.m. -- Meeting
WHERE: Lodi Grape Festival--Burgundy Hall 413 E. Lockeford St, Lodi
RSVP: Natalie Collins  at  or (916) 379-8995

Standard Mileage Rates Increase in 2019
The Internal Revenue Service has issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.  Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (plus vans, pickups or panel trucks) will be 58 cents for every mile of business travel driven, up 3.5 cents from the rate for 2018.

California Heritage Club Seeks Applicants
Has your operation been in business in California for 100 years or longer? The California Agriculture Heritage Club is a prestigious group of families and businesses that are descendants of pioneer ranches, farms and agribusiness of early California, and have shown dedication to preserving agriculture's heritage and moving the industry forward. The club's purpose is to recognize those that have maintained a financial responsibility in agriculture for at least 100 years. Inductees and members will be honored on July 17, 2019.


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Lance Winters, master distiller at St. George Spirits. 
Daily/hourly program.
Don't miss out - several valuable opportunities at various levels are still available. Visit the Unified website or discuss with Jenny Devine at (916) 379-8995.
CAWG members must register by Jan. 22 to receive a $200 discount. To register by phone, call 888-559-9530. If you need your Unified code, contact CAWG at 916-379-8995.