A speaker at a Fresno agribusiness conference tossed some cold water on the hopes of some participants that had been raised the day before when Gov. Arnold Schwarzenegger signed an $11.1 billion water bill at nearby Friant Dam.

“I’m not going to sugarcoat this,” said Jonas Minton, water policy adviser for the Planning and Conservation League in Sacramento. “Those of you that supported (a dam at) Temperance Flat, you were had in this bond because of the higher standards for your project.”

While the water bond has some favorable provisions – including helping to restore the Sacramento San Joaquin Delta – Minton said it is crafted in a way that favors expansion of Los Vaqueros Reservoir in Contra Costa County and makes the Temperance Flat project unlikely.

“If it does pass, what will people around here get — no dam and an increase in taxes to pay off the bond,” Minton said. The bond still must be approved by California voters next year.

The 28th Annual Agribusiness Management Conference, whose sponsors included Bank of America and the California Agricultural Technology Institute at Fresno State University, was packed with hot button issues and some disagreement on the course that agriculture must follow.

In addition to water, the lifeblood of farming in a state that has faced a drought and court-based cutbacks in deliveries, other topics included invasive species and cap and trade legislation in the wake of climate change.

Richard Howitt, chair and professor of agricultural and resource economics at UC Davis, brought a laugh when he said, “Let’s see, we’ve talked about the depression, disease and death. Is there anything else we should consider? Oh, yes, water.”

Howitt said drought conditions have taken the biggest toll on farming in the state, more than twice the impact of water restriction due to protection of fish by the courts. But, he added, “If it rains, biological restrictions will still bite into Delta deliveries.”

He cited a trend in California from fewer field crops to more growing of fruits, nuts and vegetables — a change he said is driven by market demand. Taking a page from the astronauts, he said, “We grow the right stuff.”

Howitt said government regulation that draws considerable fire from growers and industry groups is something that also assures survivability of agriculture in California: “Traceability and safety, it’s what we do better than anybody.”

His outlook for the future, in contrast with several of the conference speakers, was bright. He believes the industry can grow by as much as 25 percent despite reduction in land and water use because it is responding to market demands.

Minton said agriculture is using water much more efficiently: “We produce 40 percent more crop per drop than we did three decades ago.”

A look at climate change and implications of cap and trade legislation followed the discussion of water.

Don Hofstrand, co-director of the Agricultural Marketing Resource Center at Iowa State University, said agriculture is certain to be affected by cap and trade legislation that regulates greenhouse gas emissions.

Although farming is not included among regulated industries, he said, growers are likely to see adverse impacts in higher cost for fertilizer and other inputs. On the plus side, Hofstrand said, farmers may be able to provide carbon offsets for other industries.

Hofstrand believes cap and trade would drive up commodity prices, but there could be a boost to biofuels and bioelectricity production and carbon offsets would be more valuable. The timber industry, in particular could benefit, and Hofstrand said new technologies for carbon capture and sequestration could blossom.

But Cathleen Enright, vice president for government affairs for Western Growers Association, sees little value for growers of the specialty crops – fruits, vegetables and nuts – that her association represents.

Among obstacles she cites is the fact that the increase in “carbon credits” must come after Jan. 1, 2009, for example. That means that what was grown prior to that – including trees that could be linked to carbon sequestration – doesn’t count.

Moreover, she said, adding trees around vegetable crops can pose a food safety problem: “Where there are trees, there can be rodents and birds.”

Unlike the Midwest, where crops cover huge acreage, she adds, specialty crops cover only small acreage. “If Exxon is going to buy credits, it will do so from the Midwest, not from a few farms in California,” she said.

Further complicating things, she said, is that carbon credits can’t be granted if they are government mandated, and separate state law in California will call for such mandates.

Moreover, she believes those who purchase credits will be looking at long-term contracts, something that a grower in California might shun, not knowing whether, for example, in five years he or she can keep alive almond trees because of reduced water availability.

Paul Wenger, first vice president of the California Farm Bureau Federation, said California must do more to make it easier for dairies, often cited as a polluter on greenhouse gases, “to get methane digesters up and running.”

Wenger also said there should be more emphasis on use of water – in addition to solar and wind – as a generator of renewable energy, partly because it offers other amenities that include boating, fishing and other recreational pursuits.

The conference in Fresno opened with a grim outlook for the national and world economy form John B. Penson, regents professor and Stiles professor of agriculture at Texas A&M University.

Penson said that despite the fact the gross domestic product was up 3.5 percent in the third quarter of 2009, “it’s too early to pop the cork on the bottle of champagne.”

He said some of the key components for the rise in GDP were pegged to “massive stimulus money” — the “cash for clunkers” program that has ended and the credits for home buyers, which has been extended.

Penson said consumer debt is much higher than during previous recessions and that this is the broadest based global recession since 1948. He believes the weak U.S. dollar will help prop up export demand, but there will be continued, moderate increases in crude oil prices.

He expects higher interest rates and inflation as the economy recovers and says an end to the recession will not be a reality until there are three consecutive quarters of rising consumer confidence and spending.

Penson’s talk was followed by a look at invasive species, including the citrus psyllid that can carry a disease called Huanglongbing, commonly described as greening.

That insect alone – and the disease it can carry – threaten to devastate California’s $1.8 billion citrus industry.

Joel Nelsen, who heads California Citrus Mutual in Exeter, talked of the toll the insect and disease has already taken on Florida.

He also talked of the challenge facing government inspectors as more than a million people enter the United States daily and trucks, ships and airplanes stop at major California portals.

“The public service television spot running on local television about invasive species being ‘hungry and they’re here’ is right on target,” Nelsen said. “Invasives suck the lifeblood out of budgets, plant material fruits and vegetables. The costs to the state general fund equates to something approaching $64 million.”

Another cost to invasive species, he said, is the loss of organic programs and integrated pest management because of the need to spray with additional materials to keep the pests in check.

In addition, he and other speakers said, there is the potential loss of trees and bushes in residential properties that can be hosts to pests, coupled with the public relations challenge that comes with treating those landscapes.

The number of invasive pests in California is increasing ever year, said Robert Leavitt, acting director of the plant health and pest prevention services division of the California Department of Food and Agriculture.

Leavitt talked of efforts being taken to cope with Medfly infestations in Santa Monica that include stripping all fruit from trees with 100 meters of a find “at huge cost.”

He said the state remains the home of the only significant “HLB free” area for citrus on earth, though there are some smaller regions in Texas, Arizona and parts of New Mexico. Elsewhere the disease has caused significant damage.

The implications of its spread into California could be huge – and not just for farmers. “Every other house in Los Angeles, for example, has a citrus tree,” Leavitt said. “This affects your mother’s citrus tree, your cousin’s tree, and your grandmother’s.”

Leavitt rattled off a list of invasive pests, along with steps that are being taken to keep them out of the state, including use of 16 border stations and release of ballast water from ships at sea 200 miles from the state.

Timothy D. Paine, professor and entomologist with the UC Riverside, said invasive insects cause 50 percent of the losses sustained by agriculture each year.

Compounding the challenge is the fact that much of what is grown for food – or landscaping – in the United States comes from outside its borders. Given no natural enemies inside U.S. borders, a pest that damages those plants can have a field day.