THE UC/AIC QUARTERLY

THE NEWSLETTER OF THE UC AGRICULTURAL ISSUES CENTER
VOLUME 12. NO. 1. 1998
DIRECTOR’S MESSAGEBY DANIEL A. SUMNER

California agriculture is known for its diversity. We often think of this in the context of the more than 250 commodities produced on the state’s farms and ranches. But California agriculture is also diverse in the range of issues it faces. The issues are like crops in that some are “annuals”—the cycle from when the idea is planted to when the research results are “harvested” is within a single year. Of course, some of the annuals also appear in the rotation again in a few years. However, many issues are perennials. We harvest useful results periodically, but the issue remains.

This diversity of issues is a continuing challenge here at the Center. We must allocate our efforts among important new issues and long-standing issues that continue to demand attention.

A first principle of economics is that with limited resources one must choose among competing potential activities. Our strategy at AIC is to try to make the most effective use of our resources developing useful research-based information. This Quarterly describes a number of current activities and highlights some recent publications. In addition to these, we are pursuing a number of topics that have been mentioned in previous issues by our associate directors. It would, of course, be valuable to be able to undertake even more projects, but AIC has limits, too.

Among the topic areas we plan to pursue more fully in the near future is an analysis of science policy for California agriculture. In recent years, the University of California’s Office of the Vice President of the Division of Agriculture and Natural Resources has organized and led a major effort to consider Divisionwide organization, priorities, and program evaluation. I have been participating in this effort as chair of the Program Planning Advisory Committee for Agricultural Resources. The role of the University of California in agricultural research and outreach, the process of priority setting and the evaluation of the contributions are all issues of vital importance to California. AIC can play a role in this process by helping to bring to bear economic analysis and other information from the field of agricultural science policy. This effort will build on the well-received AIC report Valuing UC Agricultural Research and Extension and the recent AIC Issues Brief, Science and Technology in California Agriculture.Agricultural science policy is a topic of major global importance. It is an area where AIC has unique resources and it is particularly vital to California agriculture.

We are enthusiastic about pursuing these issues. Priority setting and evaluation is at the heart of economics and management. This is something AIC faces in its own program, and it is an area where the Center can bring expertise and experience to help contribute to productivity, growth and other improvements in California agriculture.


HAROLD O.CARTER ENDOWMENT UPDATE

A reception and dinner honoring AIC Founding Director Harold O. Carter highlighted a recent AIC Advisory Board meeting. The event also marked the official beginning of the fund-raising campaign for the Harold O. Carter Endowment.

Carter’s contributions to the University and to California agriculture were noted and praised by, among others, Barbara Schneeman, dean of the College of Agricultural and Environmental Sciences; W.R. Gomes, UC vice-president for the Division of Agriculture and Natural Resources; and Ann Veneman, California’s secretary of Food and Agriculture. A letter from Governor Pete Wilson commended Carter’s career as a UC faculty member and as founding director of the Agricultural Issues Center. AIC Board chair Bill Allewelt presented him with an engraved silver tray from the Center board and staff.

It was announced that lead gifts to the Carter Endowment totalled more than $200,000. This excellent start will be followed by personal solicitation visits to prospective donors from Rick Swantz, development officer for the College of Agricultural and Environmental Sciences; Daniel A. Sumner, current Center director, and Bill Allewelt. Advisory Board members and campaign steering committee members were encourged to help identify individuals and corporations who might contribute to the Endowment.

The campaign is being led by AIC Board members and the following co-chairs: Howard Marguleas, chairman emeritus, Sun World International, Inc.; Graydon Nichols, president, Nichols Farms, Inc.; and Ann Veneman, secretary, California Department of Food and Agriculture. The steering committee includes: Robert Egerton, senior vice president, CoBank; Michael Fitch, agriculture consultant and Wells Fargo Bank, retired; John Kautz, owner, John Kautz Farms and Ironstone Winery; Bill McFarlane, McFarlane and McFarlane Farms; Terry Scranton, executive vice president, Bank of America; and Ron Schuler, president, California Canning Peach Association.

Materials outlining the varied ways to make charitable contributions are available from the co-chairs, from AIC and from Rick Swantz.

EXOTIC PEST PROJECT UNDERWAY

An advisory committee and multidisciplinary research teams are being organized for the Center’s new major project on exotic pest and disease policy in California—an issue that has even greater importance with the state’s increasing role in a globalized food system. The project will be broad in scope and expertise, involving university researchers, and Extension specialists, state and federal agency staff, and agricultural and other public-sector representatives.

The goal is to create a stronger scientific basis for decision-making related to non-indigenous pests in California, including assessment of both costs and benefits of public policies and programs. Criteria for the systematic selection of case studies are now under discussion.

AIC associate directors Jerry Siebert and Keith Knapp join AIC director Sumner in assuming lead roles on this project. Also providing important guidance are veterinarian James MacLachlan, chair of the Department of Pathology, Microbiology and Immunology in the UC Davis School of Veterinary Medicine; Joseph Morse, a professor in the Department of Entomology at UC Riverside and director of the UC Center for Exotic Pest Research; and Deborah Golino, director of the UC Davis Foundation Plant Materials Service and a Cooperative Extension specialist in plant pathology. Policy leaders and scientists at CDFA and USDA Animal and Plant Health Inspection Service (APHIS) will also be collaborating. Overall project coordination will be provided by Center analyst Marcia Kreith.

Economic models will be combined with appropriate scientific data and analysis to evaluate current and potential effects of exotic pests and of exclusion or control programs on (1) costs of California plant and animal commodity production, (2) demand (especially international) for California food and fiber products, (3) import of goods and national or international travel, and (4) the environment and urban communities. Integral to the evaluation is consideration of the “public good” nature of exotic pest and disease exclusion and control.

During the next year, several research teams, of four to eight members each, will undertake investigative and analytical work. Participants have expertise in an array of disciplines from biology to law, from epidemiology to economics, and many others.

Discussion of preliminary results is expected in spring of 1999, with a major conference scheduled for the fall of that year. Results will be disseminated through publications and workshops.

EXPORT PROJECT CONTINUES

The Center’s agricultural export data project is well under way. Most recently we surveyed state departments of agriculture in the United States to assess current and potential methodologies used to report their agricultural export statistics.

The response to the survey has been positive, generating great interest and support for the project outside of California. We continue to get information daily.

In late March we held a panel discussion at the California Department of Food and Agriculture in Sacramento to discuss the uses and expectations of state agricultural export data. Fourteen participants represented government, banking, academia, and industry. Export data, they said, is primarily used for public relations, policy-making, funding decisions, and research. The panelists stressed the need for accurate information that does not lead to public misconceptions, research errors or incorrect decisions.

They also made it clear that they have an interest in high quality data for California agriculture, and expressed enthusiasm for working with the AIC effort to improve the information available.

The information from the survey and the panel discussion will enable us, by this summer, to propose a methodology for more accurate estimates as well as produce improved export statistics for California.

THREE NEW ISSUES BRIEFS

Three upcoming AIC Issues Briefs demonstrate the diversity of this Center publication series. The wide-ranging topics are (1) grower reactions to the federal Farm Act, (2) potential impacts of groundwater market transfers, and (3) a statistical study of organic agriculture in California. Each in its own way involves important public policy issues.


Last year was the first growing season in which farm operators and land managers could fully respond to the federal Farm Act. Two researchers, Warren Johnston of UC, Davis, and Lyle Schertz of US Department of Agriculture (both retired), set out to learn how farm decision-makers were responding or planning to respond to the new rules. They organized a series of eight focus-group panels of farmers and farm managers in five regions of the US, including the Sacramento Valley. This Issues Brief focuses on the Sacramento Valley panelists, and places their responses in context with those elsewhere in the nation.

All groups believed that the new law creates need to shift acreage among different crops, and to pay more attention to marketing. The Sacramento Valley panelists, mostly rice growers, were less likely than those elsewhere to respond by adopting new technology—and were more concerned with price volatility. The study also asked what forces were considered most likely to influence future management decisions. The California growers focused on environmental concerns and regulations, and on higher input prices.

This Issues Brief is titled Management Changes and Impacts of the 1966 Farm Act: A National Study and a California Viewpoint.


The groundwater study looks at Kern County, where water marketing proposals are relatively advanced. It considers this question: Suppose either 10 or 20 percent of the region’s yearly water supply is transferred to Southern California (with offsetting imports during wet years). What would be the effects on the water table? On crop revenues? Would there be potential benefits of groundwater management, as distinct from an unregulated “common-property” scenario? Answers, hypothetical but based on real-world measurements, are provided by an economic model. As might be expected, the projected difference in impact between transferring 10 and 20 percent of the water supply is substantial.

This Issues Brief, titled Water Transfers and Groundwater Management: An Economic Analysis, is in the final editing stages. The authors are Marca Weinberg, UC Davis; Keith C. Knapp, UC Riverside; Richard Howitt, UC Davis; and Judith Posnikoff, Collins Associates, Newport Beach.


What is the overall size, value and growth potential of organic agriculture in California? Two UC researchers have gone to the only public source of information to provide at least some answers to that question. Laura Tourte and Karen Klonsky of the Department of Agricultural and Resource Economics at UC Davis studied thousands of registration forms supplied by growers, processors and handlers during the first three years of the California Organic Foods Act program (1992-95).

They have prepared the results as an 80-page statistical description of the state’s organic agriculture industry. Their report, being readied for publication by the Center, is summarized in an AIC Issues Brief.

Organic agriculture accounts for less than 1 percent of crop production in California, but the industry is growing faster than agriculture in general. In 1994-95, the third year studied, there were 1,372 registered organic farms in California, reporting $95.1 million in sales from more than 70 commodities grown on 45,070 acres. The AIC Issues Brief, titled Organic Agriculture in California: A Statistical Review, describes regional patterns of production, growth trends, and farm size and income statistics. Among the significant findings: In 1994-95, over half of the revenues from organic agriculture in California went to only 2 percent of the growers.

1998 EXECUTIVE SEMINAR ANNOUNCED

The AIC Executive Seminar will once again be held in December in Sacramento at the Hyatt Regency. This year’s theme is Risks and Opportunities for California Agriculture. Topics to be covered include: food safety regulations, environmental regulations including pesticide, trade rules and regulations, federal farm programs, farm labor and policy risks. The organizing committe is AIC director Sumner, associate director Jerry Siebert, Bees Butler and Roberta Cook, extension specialists, Department of Agricultural & Resource Economics, UC Davis. If you have suggestions for specific themes, speakers or panelists, please contact one of the committee members.

GOOD RESPONSE TO AIC SURVEY OF INTERNET USE

AIC’s internet survey is proceeding well. As discussed in the last AIC Quarterly, the questionnaire is intended to gather the information needed to guide improvements in the AIC web site. It will also provide a baseline on computer and internet use for an important segment of California agriculture. We believe that this information will be of broad interest and we will provide a summary as soon as the data is available. We thank those of you who have already returned your questionnaire and we would be delighted to receive additional responses. If you have not yet returned the questionnaire, please send it in. We want the results of the survey to be fully representative of our readership, even those of you who do not use the internet regularly. If anyone needs a copy of the questionnaire, please contact the AIC office.