Opinion: How to Destroy Family Farms

Small California wineries are facing new levels of compliance requirements under new wastewater rules. Some fear the rules will drive small producers out of business.

Yesterday morning we led with Anheuser-Busch being the first consumer package goods producer to receive certification for using 95% U.S.-produced agricultural products in its beers. Yesterday afternoon we read an interesting story in Wine Business that notes new California wastewater regulations could drive some (many?) small wineries out of business.

The article notes that many small producers are "more often than not family run organizations who are making wines due to a passion. They put an inordinate amount of time and thought and focus, and they're making incredible wines, and they have a wonderful story to tell. Consumers respond positively to that. And that's why these wineries get to exist. 

“But soon as you add this layer of compliance that they've never had to do before, it distracts them from their job that they're doing. And they're out of their element.  So what happens is, at the end of the day, the unintended consequence of a lot of these sweeping compliance issues is that the small producer finally throws up his or her hands, and says, ‘I'm out.’”

So what happens next? We all know the drill: A large firm with the legal and financial muscle to contend with the new requirements swoops in, buys up the family farm, and begins churning out standardized, cookie-cutter wines.

That happened in the Central Valley of California in the dairy industry. Smaller dairies got gobbled up by larger dairies.

The next step is also predictable. Bernie Sanders and Elizabeth Warren will denounce the growth of corporate agriculture. But they won't discuss the role that government regulation has played in driving the smaller family farm or winery out.

Is increased regulation of wastewater discharge by California wineries necessary? We don't know. What we are virtually certain of, however, is that the regulations were not written with the smaller winery in mind.

The regulators who wrote the rules most likely aren't farmers, and most likely aren't from farming backgrounds. The rules themselves are shaped by the loudest voices in the room – in this case, the environmental lobby and large wineries. Small wineries don't have time or resources to lobby; they are simply focused on producing the most exceptional wine they can.

But what about the trade associations? you may ask. Take a look at Wine Institute's board of directors – its chairman is Randall Lange of LangeTwins Family Vineyards & Winery. With 7,000 acres of vineyard, it's a safe bet he hasn't a clue about the challenges faced by small wineries.

Wine Institute's first vice chairman is Matt Gallo of E&J Gallo Winery, the world's largest. Alpha Omega Winery's website doesn't tell us how many acres it actually controls, but it does note that in addition to its own production it buys from some of the top names in California wine. Robin Baggett of Alpha Omega is second vice chairman. Gretchen Roddick of Hope Family Wines Gretchen Roddick of Hope Family Wines is treasurer; Hope Family owns 99 acres and has some 1,112 acres under long-term contract, and Ben Dollard of Treasury Wine Estates America, is secretary.

None of the people – not the regulators, not the trade associations, not the large wineries – are bad people. They simply aren't concerned one way or the other with the fortunes or futures of small wineries.

Is there a solution? I don't know. If you have one, please comment.

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