Ag Order 4.0 Economic Impact Analysis

The Central Coast Regional Water Quality Control Board (CCWB) published its General Waste Discharge Requirements for Discharges from Irrigated Lands, known as Ag Order 4.0, and associated Final Environmental Impact Report (EIR). Ag Order 4.0 specifies a set of complex requirements for farming operations in the Central Coast ranging from targets/limits to fertilizer applications and discharge from fields to additional reporting requirements and management of riparian corridors. ERA Economics was engaged by a consortium of clients, collectively known as the Ag Partners, to prepare a reconnaissance-level review of the economic analyses and documentation prepared by CCWB.

The ERA team reviewed the analysis and materials prepared by CCWB, including reviewing assumptions for crop values, production, acreage, and production costs. We quickly identified areas where the analysis could be improved to support a solution that would both achieve CCWB water quality objectives and lower potential economic costs for the region’s agricultural industries.

ERA also completed a technical review of CCWB analyses, which identified omissions of fact and studies that were not correctly interpreted to support the Ag Order 4.0 approach. An alternative economic analysis was developed applying a standard economic framework. This included reviewing the work completed by other regional boards and how it would apply to the Central Coast regions. A series of farm-level budgets were developed to illustrate the magnitude of costs imposed by the proposed Ag Order 4.0.

ERA’s economic analysis illustrated the regulatory impacts of the Ag Order 4.0 in several different metrics. A field-level budget was developed to illustrate the costs to growers and shippers, and a stochastic risk assessment was prepared to illustrate the variability in returns to farming. This was related to regional economic impacts that describe the value of the affected farming industries to jobs, income, and local communities across the Central Coast.

ERA worked under tight timelines and in close coordination with legal counsel and other consultants to prepare technical analysis and deliverables. Two technical memoranda were prepared and submitted as part of public comments [1] [2]. ERA principals provided testimony at the Central Coast Regional Board hearing in September 2020.