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California produce growers are sounding the alarm over the state’s latest proposed regulations to implement the SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act, warning the newest draft could make compliance impossible for some fresh produce packaging and drive certain products out of the California market.
In an interview with Agri-Pulse, leaders at Western Growers said the most recent regulatory language from the California Department of Resources Recycling and Recovery, known as CalRecycle, represents a major shift from earlier drafts that agricultural groups believed were workable after months of negotiation.
“We thought we had this carve-out,” said Gail Delihant, senior director of government affairs at Western Growers. “And the way they have it written now, you might as well just delete it out of the law.”
SB 54, enacted in 2022, requires producers to reduce plastic packaging by 25% by 2032 and ensure all remaining single-use packaging is recyclable or compostable. It also establishes an extended producer responsibility framework, shifting the cost of recycling and waste mitigation from local governments to producers.
But Western Growers says the latest draft undermines key compromises that had been taking shape during the past year of rulemaking.
A long regulatory fight
The current conflict builds on more than a year of contentious debate over how SB 54 should be implemented. CalRecycle first released draft regulations in early 2025, sparking immediate backlash from industry groups that warned the rules could raise costs, threaten food safety and disrupt supply chains.
Gov. Gavin Newsom later agreed the proposal could impose unacceptable burdens on businesses and sent regulators back to revise the plan, launching a series of updated drafts and negotiations.
Gail Delihant (WGA photo)A second draft released in May also drew criticism from food producers, farm groups and manufacturers over compliance costs and the lack of clarity around exemptions for packaging required under federal food safety rules. One of the most hotly contested issues was whether certain food packaging should be categorically excluded due to its role in preventing contamination and spoilage.
Agricultural organizations, grocers and food manufacturers broadly supported those exemptions, arguing they were necessary to protect perishable products and ensure compliance with FDA and USDA standards. Yet environmental groups argued broad carve outs would undermine the law’s intent to curb single-use plastics.
Western Growers was deeply involved in those earlier negotiations. In comments submitted last fall, Delihant warned that rapid packaging changes could increase food waste and costs, while threatening product quality and safety.
Those debates appeared to be settling into a compromise heading into late 2025. But Western Growers says the newest draft has upended those expectations.
In response, a CalRecycle spokesperson stressed to Agri-Pulse that "the draft regulations do not remove a categorical exemption. Rather, they clarify how producers must demonstrate eligibility for an exclusion. Food packaging remains eligible for an exclusion when compliance with both SB 54 and federal law is not reasonably possible."
While the exemption pathway in the latest draft is technically available, the industry sees is as practically unworkable. The revised process requires companies to prove no alternative exists and, if an exemption request is denied, they may have as little as 180 days to come into compliance — a timeline out of sync with the decades of research already invested into finding alternatives, according to Western Growers.
Sen. Ben Allen, D-Santa Monica, who authored SB 54, had a stronger response to the agricultural concerns.
“Let’s be clear – food packaging was one of the primary points of focus when negotiating SB 54 and was never intended to receive such broad categorical exemptions," Allen told Agri-Pulse in a statement. "The latest draft regulations to implement the law was an attempt to narrow the gaping and illegal loophole CalRecycle left in their previous iteration, which they still failed to close."
Allen reasoned the only clarification was that only packaging required to comply with federal law may be exempt from SB 54 enforcement, which "should have been how everyone was interpreting these regulations to begin with."
He explained that SB 54 provides companies with a multi-year onramp to invest in sustainable packaging and pointed to CalRecycle's latest economic assessment showing full implementation would deliver $32 billion in public benefits.
"Our local governments and California ratepayers have been paying the price for the lack of accountability we have historically provided to those choking our infrastructure with plastic pollution," said Allen. "We are overdue in shifting this cost burden.”
‘Cart before the horse’
Melissa Koshlaychuk, Western Growers’ director of government affairs, said the group had been working closely with regulators and other stakeholders to craft a system that allowed agriculture enough time to transition.
“Where we left off was this place of no one’s getting out of having responsibility,” said Koshlaychuk. “But having that categorical exclusion allowed industries like ours to weather this storm of this cart-before-the-horse situation.”
She said CalRecycle had acknowledged in earlier conversations that infrastructure and new materials are not yet ready to support the law’s ambitious timelines.
“It was fairly workable,” said Koshlaychuk.
Under the newest draft, however, Western Growers believes the safety valve that allowed producers to seek exclusions for food safety and shelf life needs has effectively disappeared.
“They took that ability away in this last 15-day comment period,” said Delihant. “Nobody will be able to — it’s impossible.”
Delihant said fresh produce packaging has evolved over decades through extensive research and development to protect food safety and extend shelf life.
“These bags create shelf life and eliminate food waste,” she said. “That’s why your baby carrots last like 21 days in the refrigerator. That’s why the bagged salads can go for over a week or more.”
Packaging also plays a fundamental logistical role across the supply chain. Studies on fresh produce value chains consistently show that primary packaging protects against damage, contamination and spoilage, while enabling long-distance transport and storage.
Without it, Delihant argued, spoilage would increase dramatically.
“If you bought a head of lettuce and put it in the refrigerator and you didn’t have it in plastic, it’s going to die overnight,” she said.
What the research says about costs
Beyond regulatory compliance concerns, economic research is reinforcing industry warnings about the potential cost impacts of reducing plastic packaging.
Last year the Canadian government published a value-chain analysis examining the cost implications of reducing plastic in fresh produce packaging that found changes can ripple across the entire supply chain, affecting capital investment, labor, transportation and retail pricing.
The study concluded that packaging typically accounts for about 5% to 7% of the retail price of fresh produce, but switching to alternative materials can significantly increase total costs due to equipment changes, slower production speeds and supply chain inefficiencies.
In some cases, replacing low-cost plastic bags with cardboard or fiber alternatives could lead to retail price increases of about 11% for relatively simple transitions and as much as 42% when major equipment upgrades are required.
Research also found that selling produce loose — often proposed as a way to reduce plastic — can raise costs rather than reduce them. Retail audits in multiple countries found loose produce can cost consumers 24% to 39% more by weight due to labor and handling inefficiencies.
Melissa Koshlaychuk (LinkedIn photo)Those findings echo concerns raised by Western Growers that packaging changes may carry unintended economic consequences.
Beyond material costs, Western Growers is worried about the financial burden of SB 54’s fee structure.
Koshlaychuk noted that California’s law includes a unique requirement for producers to fund a $500 million annual environmental mitigation program for a decade starting in 2027.
“That’s separate from all the fees that producers will be charged to help recycle, create markets, all that,” she said.
Delihant pointed to experiences in other jurisdictions with extended producer responsibility programs as a warning. Produce companies shipping into Oregon and Canada are already receiving invoices in the hundreds of thousands or millions of dollars annually, she said.
“Our guys are getting billed over a million dollars for those fees just to ship their product into Oregon,” Delihant said. “Canada is charging like $1.5 million.”
Based on California’s size and volume, she said, some companies estimate fees could reach about $5 million annually.
“Farmers’ margins are like nothing,” she said. “Every bit of packaging that we have to buy, and even a half a cent more for the packaging eats into our bottom line.”
Costs are also being pushed down supply chains. Delihant cited examples where private-label retailers pass compliance fees back to growers.
“They send an invoice to the farmer,” she said. “They’re like, ‘We’re not paying this. You are.’”
Western Growers said the biggest long-term concern is that the recycling mandates may be unattainable for certain produce packaging.
“By 2032 their packaging won’t be 100% recyclable,” said Delihant. “So it’s like you can’t sell it into the marketplace in California.”
That could ultimately reduce the availability of fresh-cut produce, berries and leafy greens in stores, the group warned.
The research suggests that while some plastic reduction is feasible, widespread replacement faces structural and financial barriers that limit the speed of change, particularly in the short to medium term.
A familiar fight returns
The renewed clash echoes battles dating back to the initial 2019 legislation over exemptions, compostable alternatives and timelines.
“We thought we had handled it in-house,” said Delihant. “And then, boom. I feel like Charlie Brown and Lucy pulling the football out.”
Western Growers is now urging growers to submit comments and contact state leaders, including the governor’s office. Koshlaychuk said uncertainty remains about whether regulators will make further revisions or move ahead quickly due to statutory deadlines.
“They don’t want any more delays,” added Delihant. “They’re down to the wire.”
