THE UC/AIC QUARTERLY

THE NEWSLETTER OF THE UC AGRICULTURAL ISSUES CENTER
VOLUME 12. NO. 2. 1998

Director’s Message
by Daniel A. Sumner

Regular readers of the AIC quarterly may have noticed how much of what we do at the Agricultural Issues Center has an international flavor. This does not reflect a conscious choice to emphasize the global nature of California agriculture as much as recognition of an inescapable reality.

Our current major project on non-indigenous agricultural pests and diseases involves international issues in fundamental ways. First, international commerce and visitors are the source of many of the pest invasion threats with which the state’s programs of exclusion, control or eradication must deal. Second, much of the concern about exotic pests reflects the potential harm that their establishment here would do to California’s ability to export agricultural products. The goal of exotic pest policy is to maintain a protective system for California agriculture that is both science-based and reasonable, and also to recognize the legitimate objectives of other countries in maintaining their own systems. Indeed, one objective of trade negotiation for California and the United States is to ensure that import rules imposed by other countries are truly science-based and reasonable. Trade is always a two-way street, and technical trade rules must protect against pests while allowing legitimate trade.

Another project illustrating the importance of international trade is the Center’s current effort to help the CDFA and others provide more accurate agricultural export data on a state-by-state basis. It turns out to be difficult to measure the actual scale of California agriculture’s international trade. Data, either in-total or by-commodity, simply are not available from official sources. The AIC project will help provide more reliable data.

A third topic with clear international significance is measuring the contribution of agricultural research and extension, and implications for organizing and financing public research and extension. Even more than agricultural goods, ideas flow readily, if not freely, across international boundaries. This means our research in California has benefits for agriculture in other countries. It also means that we gain from innovations created elsewhere. Further, consumers and others in California benefit from innovations used in California agriculture, regardless of their source. Californians also benefit from innovations imbedded in products we import, just as customers around the world benefit from our innovation. Any reasonable evaluation of research and extension programs in California must take into account important international spill-ins and spill-outs. In the world of ideas, as in the world of commodities, we are in a global market.

Valuing Foot and mouth disease surveillance

An upcoming AIC report deals with a crucial “if” question involving public policy and regulation: What if a highly contagious livestock disease-foot-and-mouth disease, in this case-suddenly appeared in California?

More specifically, how much economic loss could be avoided by quick and effective control measures? What are the possibilities for quick and effective control? The study involves an intensive study and provides sobering results.

The chances of such a disaster are unknown, but may be increasing because of more intensive international travel and trade. The AIC publication describes seven possible scenarios that might follow an outbreak of foot-and-mouth disease in Tulare County, where dairy cows and other livestock are concentrated and therefore more vulnerable to the disease. It also reviews current planned strategies in case of an outbreak, identifying potential problems and suggesting actions.

The 150-page publication is titled The Potential Impact of Foot-and-Mouth Disease in California. The author is Javier M. Ekboir, formerly a post-doctoral fellow in the Department of Agricultural and Resource Economics at UC Davis. (Now with CIMMYT in Mexico City.) Ekboir’s project was in cooperation with the UC School of Veterinary Medicine, and was supported by the California Department of Food and Agriculture.

Foot-and-mouth disease (FMD) presents no danger to humans, and in fact most adult livestock can recover from the disease. But because the virus can spread so rapidly, both livestock and livestock products from a FMD-infected region or country are embargoed throughout much of the world. In the past, outbreaks in FMD-free zones have been commonly met with “stamping-out” programs-which means slaughtering all exposed as well as all infected animals, cleaning and disinfecting all livestock premises, and then waiting to be declared FMD-free again. That is the official policy in California, in case of an outbreak here.

The total cost of an outbreak would be the sum of eradication costs (including compensation to livestock growers), production losses and, even more significant, loss of prime national and international markets for months or years. In the various scenarios, those costs in California are projected from about $2.5 billion to about $4.5 billion-and that’s assuming the outbreak is contained in the South Valley (Fresno, Kern, Kings and Tulare counties). Total U.S. trade losses would be substantially greater.

A crucial finding of the model scenarios is that, in an area crowded with livestock like Tulare County, a day or two delay in diagnosing the disease, establishing a quarantine zone, and starting the stamping-out program could make the difference between a contained outbreak and a statewide economic disaster. “The opportunity for decisive intervention lasts only one week,” the report emphasizes.

But for various reasons, including lack of awareness of the threat and lack of immediately available resources in case of an emergency, “it is highly likely that implementation of this stamping-out policy would face enormous problems which would seriously compromise its chances of success,” the report says. In the concluding chapter, those problems are analyzed and recommended actions listed.

The foot-and-mouth disease study preceded, but will contribute to, a more comprehensive extensive AIC project on exotic pest and disease policy in California. The large AIC project is considering a wide variety of pests and diseases and involves scientists, economists and others from several UC campuses, CDFA, USDA and the private sector. A conference and major report are planned for 1999.

The Potential Impact of Foot-and-Mouth Disease in California will be available later this summer from AIC.

Exotic Pest and Disease Project

The Center’s new study on exotic pest and disease policy will be comprehensive in its scope of issues, but will focus in depth on a limited number of case studies. At an advisory committee meeting on June 5, 23 attendees looked over the project plans. Represented on the committe are state, local and federal governments, UC research and extension, and the public, including agriculture.

Under consideration for case studies are exotic Newcastle disease, foot-and-mouth disease, the Medfly, rice blast, citrus canker and tamarisk.

The project’s goal is to provide a much stronger objective scientific basis for policy decisions about exotic pests and diseases, and to increase overall public understanding of the issues. Multidisciplinary research teams will review information on exotic pests and on affected crops, animals, and “third parties,” as well as relevant regulations and trade aspects, before undertaking economic analyses. USDA-APHIS and CDFA will collaborate with the UC-led research teams.

These public policy issues, and others, are on the project’s agenda:

  • What are the potential economic and environmental consequences of the establishment of non-indigenous agricultural pests and diseases?
  • How effective are current regulations in preventing new introductions?
  • What will be the effects of recent changes in import regulations and international trade barriers?
  • How much does exclusion, eradication or managed control of exotic pests benefit and costs the overall public?

Since our last report we have accelerated the project timeline with an eye to reporting preliminary findings at a public conference in May, 1999.

UPCOMING AIC EVENTS

Three workshops and seminars sponsored or co-sponsored by the Center are scheduled during the next few months. To register or get more information about these events, contact Laurie Treacher at the Center. Phone: 530-752-2320; fax: 530-752-5451; email: agissues@ucdavis.edu.

Winegrape Outlook Workshop, Friday, July 24, in Sacramento. There is still time to register for this event, which will address the outlook for winegrape demand and supply, pricing and trade issues. John Kautz, president of the California State Board of Food and Agriculture and chairman of the board of Ironstone Winery, will be the luncheon speaker. The panel of industry and academic experts includes:

  • Barry Bedwell, President of Allied Grape Growers.
  • Dale Heien, UC Davis professor of agricultural and resource economics.
  • Vaughn Kiligian, President of the Raisin Bargaining Association.
  • George Schofield, industry consultant.
  • Eric Sims, a key analyst for the Motto, Kryla and Fisher study 1998 Grape Trends: An MKF Research Report.
  • Robert Smiley, Dean of the UC Davis Graduate School of Management.
  • Bill Turrentine, of Turrentine Brokerage in San Mateo.

Daniel Sumner, Director of the Agricultural Issues Center, will moderate the panel.

The workshop is scheduled from 10 am to 3 pm at the Hyatt Regency at Capitol Park in Sacramento. Lunch is included in the $30 registration fee.

Risk Management Seminar for Agribusiness Producers, Wednesday, October 21, in Sacramento. Co-sponsored with the USDA’s Risk Management Agency, this event will include sessions dealing with:

  • Financial and marketing risks.
  • Farm labor.
  • Environmental issues.
  • Water supply.
  • Estate planning and family business organization.

Joe Glauber, USDA Senior Economist for Policy Analysis, will be the opening speaker at the seminar, which will be in the Doubletree Hotel, Sacramento. Details will be announced later.

Executive Seminar on Agricultural Issues, Tuesday, December 8, in Sacramento. Sponsored by UC’s Giannini Foundation for Agricultural Economics and by the Center, this year’s seminar has the theme “Risks and Opportunities for California Agriculture.” It will focus on the risks and uncertainties of regulations, policies and the marketing environment, as well as opportunities for California agriculture. A marketing and financial outlook session will open the seminar, followed by sessions on risks and opportunities for fruits, nuts, vegetables, field crops and animal agriculture. Vernon M. Crowder, vice-president and senior economist for Bank America Corporation, will be the lead speaker. The seminar will be held in the Hyatt-Regency Hotel, Sacramento. Details will be announced later.

Awards and Honors

Colin A. Carter, a UC Davis professor of agricultural economics and AIC Associate Director, has received the Distinguished Policy Contribution Award of the American Agricultural Economics Association. The AAEA award cited his contribution in “objectively analyzing the issues surrounding single desk selling.”

Heather Benson, an AIC student assistant, was named the Western Agricultural Economics Association’s Outstanding Senior at UC Davis. Ms. Benson graduated in June and leaves AIC in August on her way to law school at Vanderbilt University.

Farmland Publication

An upcoming AIC report is previewed in the May-June issue of California Agriculture, published by UC’s Division of Agriculture and Natural Resources. A special section of the DANR publication, with spectacular color photos, probes crucial land-use issues in California involving farmland protection, the urban fringe, growth policies, and land trusts.

The articles are condensed from several chapters in California Farmland and Urban Pressures: Statewide and Regional Perspectives, to be published by the Center later this year. The editors are Al Medvitz, a Solano County rancher and land-use specialist, and Al Sokolow, public policy specialist at UC Davis. The authors are from the academic, private and governmental sectors.

The papers, focusing on both statewide patterns and regional profiles, were first presented at meetings of the American Association for the Advancement of Science (AAAS).

AIC-Generated Export Statistics

An ongoing AIC project will generate revised and more accurate agricultural export statistics for the State of California. These data will be officially released by the California Department of Food and Agriculture in August.

Until about 1990, California farm export statistics were produced by an intensive system of information-gathering. This system proved too costly, but the procedures used subsequently did not produce reliable numbers. The Center has analysed the situation and is using a procedure that produces more accurate results in a cost-effective way. Since the need for reliable agricultural export statistics is nationwide, other states have expressed interest in the Center-designed system and are cooperating in its development.

Accurate agricultural export figures are important for planning and decision-making by government agencies, financial institutions, industries and others.