Commentary: Regulators must balance environmental and economic sustainability

Issue Date: January 20, 2010

By Corny Gallagher

Wineries, cheese plants, olive processors and other food production companies are increasingly facing more stringent water quality regulation for salt and other minerals in their wastewater. Their pending permits have been singled out by environmental activists and unfairly criticized in the media. Regulators, attempting to balance environmental and economic concerns, have also been unjustly criticized. Finding and maintaining the appropriate balance between environmental and economic sustainability will be critical as the Central Valley Regional Water Quality Control Board continues its management and regulation of salts.

California's food production and processing industry is critical to the state's overall economy and is the driving economic engine in the Central Valley. Food production companies face unprecedented global competition and must remain cost competitive to stay in business. Low dairy prices and court-imposed water pumping restrictions have already wreaked havoc on farm families and their employees throughout the San Joaquin Valley. Farm employees in these areas have been hit especially hard. Unemployment in some rural communities now exceeds 40 percent.

Likewise, the management and disposal of salt is also critical to the Central Valley and the broader state economy. Central Valley regulators have described salt management issues as a particularly vexing problem or "dilemma." And for good reason: Salt management, removal and disposal poses a complex and critical challenge for regulators as well as those being regulated. Salt management is complicated by the fact that no treatment technology exists to magically make salts and other minerals disappear. Salts can only be separated from wastewater and the concentrated brines created in the process must be appropriately managed and disposed.

Hilmar Cheese Co. is the latest food processor to be singled out for criticism. As one of the first food processing companies to face increasing regulation for salts, Hilmar's experience provides a keen perspective on evolving salt management efforts, and the need to develop sustainable solutions. Three years after formalizing a settlement with the Central Valley Regional Water Quality Control Board for not meeting salt discharge requirements, the cheese processor finds itself back before the board once again to obtain a final permit for the efforts it started long before the 2006 settlement.

Today, Hilmar continues to operate a multi-stage water treatment and reclamation facility and has invested more than $150 million in capital and operational expenses in a state-of-the-art facility, $90 million in just the last three years. Hilmar's engineers have pioneered efforts to minimize the use of potable water through extensive recycling. They have also engineered a comprehensive system to maximize the beneficial use of water, by reclaiming most process water for irrigation by local family farms.

A pioneer's path is not always easy and Hilmar has experienced its share of obstacles over the years. Central to Hilmar's difficulties is the reliance on reverse osmosis as a final stage in the treatment process. Reverse osmosis is a technology well suited to ocean water desalination, where salts can be easily separated and the concentrated brine discharged back to the ocean. The energy-intensive process does not appear, however, to be environmentally or economically sustainable for the food processing industry in the long term. Hilmar's continuing efforts to research and demonstrate alternative salt removal technologies will be important not only for the cheese processor, but to the others who follow in their footsteps.

As the Golden State tries to re-emerge from the continuing recession, regulators must remain cognizant of the need to get our economy growing again and keep it growing. Keeping the jobs we have, and creating the hundreds of thousands of new jobs we need to put people back to work, will prove critical. Balancing economic and environmental sustainability must remain co-equal goals. Economic viability is the engine that not only helps to find solutions, but also provides a clean environment for our rural communities and the people who live and work in those communities. California ag bankers care about both.

(Corny Gallagher chairs the California Bankers Association Agricultural Lending Committee, which represents the majority of financial institutions that provide credit to agricultural producers, input suppliers, and processors, food packaging, distribution and wholesaling in California. The committee has been involved in water quality issues since 2005, when it expressed its concern for finding economically viable solutions to salinity issues.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item. Top