To Create Jobs, Salinas Seeks to Tap Into the Ag-Tech Boom
Today, mayors from around the country are gathering in New York to talk about how they can rebuild their economies by courting technology companies.
Salinas already has a plan in place. The city just south of Silicon Valley is trying to capitalize on its lettuce fields by turning them into laboratories for tech entrepreneurs.
Tom Taggart, for example, has driven a lot of tractors. But the nearly 3-ton hunk of metal parked by a field in Salinas is smarter than the others.
He points to the dashboard and a screen where the rearview mirror would be. “Inside this compartment up here we’ve mounted a mini Mac computer, and it houses the lettuce program that does all this magical stuff,” Taggart said.
Taggart is the technology director at Foothill Packing, a firm that farmers hire to manage their fields. He built this device to thin out crops. It uses cameras and sensors to create perfectly symmetrical rows of leafy greens.
Taggart said farmers can be quite skeptical. “When I come out here and say I’m pixelating their crop, they think I’m really doing something bad to it.”
Taggart assures them he’s not. He’s just gathering data for a MacBook program that directs the spray nozzles on the tractor.
The final product is heads of lettuce that are exactly 10 inches apart – not a quarter-inch off.
A city turned seed investor
The smart tractor seems slick. But it’s pretty simple when you consider how far along cameras and sensors and wireless Internet have come, and how little the big farms have invested in digital tools.
There’s a lot of low-hanging fruit — no pun intended — that could change the game. The city of Salinas is trying to get in on the ag-tech boom by becoming an investor.
“When I come out here and say I’m pixelating their crop, they think I’m really doing something bad to it.”
Ray Corpuz is the city manager. He notes that beach towns pay ad agencies to attract tourists. But Salinas doesn’t have beaches. What it does have, Corpuz said, are the best lettuce fields in the country. So, the city is marketing itself as the perfect laboratory for ag tech.
The public-private partnership includes a new nonprofit called the Steinbeck Innovation Foundation -– named after John Steinbeck, a Salinas native who set his classic “The Grapes of Wrath” largely on California farms — and a new venture capital fund that will invest in technologies that help the area’s agricultural industry.
“We’re setting up a new business model actually for most local governments, for most cities,” Corpuz said. “None of them in this state of California are doing this.”
Corpuz said this is a dramatic move for Salinas. The midsize town is known for gang violence and high unemployment. Last year the city’s largest employer, Capital One Bank, shut down its local branch. More than 800 people lost their jobs.
“That’s a lot of people, so the economic setback was probably $60 million annually in payroll, which was a big hit for us,” he said.
Monterey County got federal and state grants to help laid-off workers rewrite their resumes. Salinas didn’t have access to similar funding because California shut down redevelopment programs for cities.
So, Salinas decided it would try to help create jobs by becoming a startup incubator. Corpuz said that when he tells other city managers, they look at him a bit cross-eyed and say, “It’s risky. Sounds like a great idea, but it sounds risky.”
A new venture fund
Salinas is paying SVG Partners, a venture capital firm based in San Jose, $180,000 to attract ag-tech investors and build links between local residents and Silicon Valley.
John Hartnett is the investor leading the project. He said cities need to spend less money on research and more on real-world plans.
“I didn’t need to spend a year to produce a report because it’s so obvious what needs to be done,” Hartnett said. “In many cities it’s obvious. It’s about taking the risk of execution.”
Silicon Valley’s venture-capital community already has a big appetite for clean tech. Hartnett said he can tap into that appetite for new ag-tech companies, and also get capital from the multi-billion-dollar farm industry based in the county.
Andrew Fernandez, vice president of raw product at Taylor Farms, based in Salinas, said his company is struggling with a labor shortage, as seasonal workers increasingly stay in Mexico.
“All the farms are competing with each other for labor. We need machines and tools that help ease the need,” Fernandez said. “The workers just aren’t here.”
Hartnett said he can raise $50 million for the new Salinas venture fund by January.
That goal is not legally binding. But Hartnett said, referring to the city manager, “If I’m not delivering, you know, he can fire me.”