The nursery and greenhouse industry is once again Oregon’s top agricultural commodity by value, according to a sales estimate for 2018.
High-quality plants and green goods continue to be in demand here and abroad.
With this momentum at our back, we now must turn the page to 2020. The new year promises a tumultuous presidential campaign, the possibility of harmful laws at the state and federal level, and the specter of a looming economic recession.
As the Great Recession taught us, it is seldom just one thing that contributes to hard times. When one thing stacks on top of the next, the cumulative impact can decimate an industry.
OAN members play important roles in all stages of the nursery industry supply chain. Our members hold diverse opinions on critical issues, and that is a strength. It means we can be solution oriented. No one can pigeon-hole us as liberal or conservative.
OAN members care about their employees, paying decent wages and providing benefits that contribute to a good standard of living. Members are part of the community and support fair taxation, public services, and schools. However, they also care about a healthy regulatory climate for business — which is seldom guaranteed.
The fall of NORPAC Foods
As I write this, NORPAC Foods — an agricultural cooperative that sells fruits and vegetables from more than 200 growers — has announced that it will close all of its plants in Oregon. NORPAC’s crops are harvested on more than 40,000 acres of Willamette Valley soil. The resulting layoffs will put more than 900 employees out of work, right before the Christmas holiday.
It was not just one thing. NORPAC earlier filed for bankruptcy and struck a deal to sell its assets, but the agreement fell apart. Selling a complicated asset, such as a cooperative, is tough under any circumstances.
This will have a large impact on farmers. OAN has two influential members serving on the NORPAC board. They suffered from making this decision.
In situations like these, fingers get pointed. However, I have often stated that when something like this happens, there were usually warning signs that someone raised, and someone else in power dimissed. The common retort is, “You really won’t go anywhere, or close your operation.”
When the chickens come home to roost, the lack of accountability by policymakers is disheartening. Our sector is not fully enjoying the benefits of the booming economy. We may not pack up and leave, but we can lose important businesses such as NORPAC.
Losing ag operations isn’t just about us as producers. The community loses jobs, secondary services and the carbon sequestration our operations provide. The foundations of many rural communities are further eroded. NORPAC had some unique issues, but their demise shows our collective vulnerability as high-volume, low-margin operators.
Runaway cost of doing business
When policies are discussed outside a partisan context, we can assess the merits and the likely impacts on OAN members of all sizes, markets and types. Reasonable minds can project different outcomes. The association welcomes these discussions.
We have been through the implementation of the Obama Administration’s Affordable Care Act, Oregon’s paid sick leave requirement, the state’s new paid family leave, the state’s mandatory retirement accounts requirement, and many others. All of these create an administrative burden for businesses. Big corporations can absorb these cost inputs or pass them on, but smaller operations must either add people or consultants to do this work.
In Oregon, we also have one of the highest minimum wages in the country. Adding to that, the 2019 Legislature passed a tax that will directly harm agriculture. The new commercial activities tax, which taxes Oregon businesses based on in-state gross (not net) sales of greater than $1 million, takes effect after the first of the year.
In the 2020 Legislature, we expect to another attempt at passing a carbon bill. This will significantly increase the cost of fuel to move products, as well as the natural gas nurseries need to heat greenhouses.
New employer mandates are queued up for 2020 and 2021. If passed, these will burden nursery operations even more.
Many of our nursery and greenhouse operators compete against growers that have much lower cost burdens, and are closer to the same markets. At what point does Oregon’s ace in the hole — the highest quality plant material — lose its competitive edge? What then? Who will be accountable and take responsibility?
Lending your voice
We all have a voice, and a stake in the communities we share. When we are part of an association, that voice is magnified. It carries greater weight with policymakers.
Our association’s mission statement is simple: The Oregon Association of Nurseries is the community dedicated to the long-term success, profitability and excellence of Oregon’s nursery and greenhouse industry.
Please lend your voice to the discussions that impact your business. We need you.
Complex issues rarely have a clean answer. The nursery and greenhouse industry should continue to work with all interests to make our state and nation a better place to live and work.
But it is critical that we do not allow public sector decisions to encourage private sector failures. Policymakers need to recognize that policies do not act in isolation. It’s not “just one thing” when they impose new costs and regulations on our family operations. It’s “one more thing.” The burden is cumulative. At some point, that “one more thing” is the difference between staying viable, and going out of business.
