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THE UC/AIC QUARTERLY

THE NEWSLETTER OF THE UC AGRICULTURAL ISSUES CENTER
VOLUME 13. NO. 1. 1999


Contents

Exotic Pest and Disease Conference Will Be Held May 25 in Sacramento

Measure of California Agriculture Update is Off the Press

Winegrape Outlook Workshop Scheduled

China’s Role in Agricultural Trade is Topic of Conference

Agriculture in the Digital Economy: More Information Needed

December Date is Set for Executive Seminar

Understanding California Agriculture: A Primer

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AIC Video List

Exotic Pest and Disease Conference Will Be Held May 25 in Sacramento


         A day-long public conference slated for Tuesday, May 25, 1999 in Sacramento will be an important milestone in the two-year multi- disciplinary Center project studying the implications of exotic pests and diseases to California.

General sessions at the conference will deal with the biology, economics and public policy issues involving introduced pests and diseases of animals and plants. The threat of such invasions is greater today for at least two reasons: (1) greatly increased international travel and trade, much of which flows through California, and (2) the state’s increasing vulnerability due to a growing population and more intensive agriculture.

Leaders of 14 case studies of current and potential threats to California’s agriculture, environment and even human health-ranging from yellow starthistle to foot-and-mouth disease, from the red imported fire ant to citrus canker-will report their research findings. The case studies will be topics of concurrent breakout sessions. Speakers include scientists and economists from the University of California, interested industries and groups, as well as state and federal government experts.

Biological principles and major policy issues and questions will be addressed in plenary sessions that open and close the conference. William J. (Bill) Lyons, the California Secretary of Agriculture will open the conference. Dr. Isi Siddiqui, special assistant to the U. S. Secretary of Agriculture speaks at lunch on exotic pest issues and trade negotiations. The closing plenary session will feature discussion with U.S. Deputy Secretary of Agriculture Richard Rominger and with former California Secretary and former U.S. Deputy Secretary of Agriculture Ann Veneman.

Registration is still open for the program, which will begin at 8:15 AM on May 25 in the Sacramento Convention Center, 1400 J Street, Sacramento. For a program or registration information, please phone or email Laurie Treacher at the Center.

Measure of California Agriculture Update is Off the Press

A revised edition adding new data and updated analyses to the Center’s most popular publication, The Measure of California Agriculture: Its Impact on the State Economy, is now available. First published in 1992 and revised in 1996, the 78-page volume provides information on California crops and cropland, farm population, export markets, farm and farm-related employment, and aggregate measures of the state’s food and fiber sector. It is loaded with tables and graphs, and is still easy to read.

The updating with 1997 data confirmed the general trend toward growth in California agriculture. Total farm cash receipts went up from about $20 billion in 1994 to $25 billion in 1997. New analysis showed that jobs contributed by agriculture jumped from 8.7% of the state total to 10.1%. The new version includes some changes in ranking of leading California crops. As one sign of the times, nursery products moved into third place behind milk/cream and grapes, nudging cattle/calves into fourth.

The Measure of California Agriculture is available from the Center for $10 (includes tax and postage).


Winegrape Outlook Workshop Scheduled

The Center’s second annual Winegrape Outlook Workshop will be held on Wednesday, July 7,1999.

This year, the program will feature the worldwide wine and grape outlook and trends. Increased plantings not only in the United States but also in Australia, Chile, Argentina and Europe augur for a re-examination of worldwide wine supply and demand.

The day-long event will also cover risk management issues for the wine grape industry by focusing on wine grape contracts and hired farm labor.

Hired farm labor has long been an issue. Recently, concern over rates of immigration, rural poverty and shifts to alternative non-farm work have stimulated increased discussion.

AIC is conducting a survey on the use of grower-winery contracts and preliminary results will be reported at the workshop.

Speakers will include Barry Bedwell of Allied Grape Growers, Agustin Huneeus of Quintessa Winery, Robert Nicholson of International Wine Associates, and Phil Martin and Dale Heien of UC Davis Department of Agricultural and Resource Economics.

The Center initiated the annual Outlook Workshop last year for the grape and wine industry, which is among the fastest-growing sectors in California agriculture.

The workshop will be held at UC Davis in the Buehler Alumni Center. The $50 fee includes lunch (with wine this time). Contact Laurie Treacher at the AIC for further information.


China’s Role in Agricultural Trade is Topic of Conference

In a conference cosponsored by the AIC, economists and agricultural trade specialists from throughout the world will meet in San Francisco June 25 and 26 to consider China’s agricultural trade and policy.

Leading experts on the Chinese economy and international trade as well as specialists in China’s agricultural trade and economic policy will discuss such issues as China’s membership in the World Trade Organization, the implications of income growth and urbanization for agricultural trade, the role of State Trading Enterprises, and China’s domestic farm policy. Featured speakers include D. Gale Johnson, University of Chicago; Barry J. Naughton, University of California, San Diego; Will Martin, The World Bank; Lu Feng, Beijing University; Jikun Huang, Chinese Academy of Agricultural Sciences; and Kym Anderson, University of Adelaide. AIC Associate Director Colin Carter and University of California, Davis professor Scott Rozelle also will present new research results.

The chief sponsor of the conference is the International Agricultural Trade Research Consortium (IATRC), an international group of economists from universities, governments, international organizations and the private sector. AIC Director Daniel A. Sumner, chair of the IATRC executive committee, and Professor Won Koo, North Dakota State University, head the organizing committee.

For more information, contact the Center or check the IATRC web site:
http://www.umn.edu/iatrc.


Agriculture in the Digital Economy: More Information Needed

R.A.E. Mueller and D.A. Sumner

Digital technologies-computers, networks and embedded micro-processors-are transforming the economy, and many of the technical prerequisites for a networked economy are already in place. Digital technologies are also widely applied in agriculture, and agriculture will not remain unaffected by the profound changes in the economy surrounding it. Until now, however, little research has been conducted on the dif-fusion, use, and impact of digital technology in agriculture.

A 1998 survey conducted by AIC showed that computers and the Internet are already widely used in California agriculture, but there is little information to help us understand the impacts.

Two important questions are:
  • Which applications of digital technology are of compelling practical importance to agriculture in California and elsewhere?
  • What are the economic effects of these technologies?
To help provide answers, AIC is beginning a review of agricultural applications of the Internet, focusing on use of email and the web in the dairy and wine industries. Both are important indus-tries in California and elsewhere, but there may be substantial differences in their uses of Internet applications.

We want to find out about agricultural business use of email, its impact on time and costs, how users rate the importance of email deficiencies, and practices to guard against unwanted email. We will estimate the extent of web access and web sites in the two industries, identify patterns of web use for obtaining information and for pur-chasing, study the use of web sites for providing information and for selling products, and ask users to indicate major benefits from using the web. (If you would like more information or have a sug-gestion for us, please contact the Center.)

Tools for searching for information and separating the wanted from the unwanted are indispensable. Information about how web users in the dairy and wine industries do this may help information pro- viders in government and industry adjust their offers to user practice.

Web sites have substantial costs and commen-surate returns must be expected by commercial web site owners. Information about web use will help us assess the payoff to these investments.

Our research on the use of Internet technologies by the dairy and wine industries will use the Internet as a research tool. In particular, ques-tionnaires will be distributed by email and be accessible on AIC’s web site. We will gather data by visiting the web sites of industry information providers. We hope to extend the research to other agricultural industries, and also extend it to other digital technologies used by the dairy and wine industries.


December Date is Set for Executive Seminar

As the retail food system becomes increasingly concentrated, major food suppliers are under pressure to meet the demands of fewer and more economically powerful buyers. These changes, with implications for all of agriculture, will be the theme of this year’s Executive Seminar scheduled for December 13. Co-sponsors of the event are the UC Agricultural Issues Center and the UC Center for Cooperatives.

CEO’s of major food companies will discuss their industries’ responses to the changing economic situation. Watch for upcoming announcements of program details and registration information.


Understanding California Agriculture: A Primer

by Daniel A. Sumner

We at AIC are occasionally asked by someone unfamiliar with the subject to describe the role of California agriculture in the economy-and do it succinctly and accurately. Here is one response to that challenge. The data presented here are taken in part from the newly revised edition of The Measure of California Agriculture, described elsewhere in this AIC Quarterly.

California agriculture is large, diverse, dynamic and economically important to the state, the nation and the world-both for the goods it produces and for the economic opportunity it provides. California agriculture also is tightly interconnected with the rest of the state’s economy and with its ecosystem.

Commodity Group Value-added
(billion dollars)
Jobs
(thousands)
Livestock, Poultry and Dairy
Fruit, Nuts and Vegetables
Other Commodities
California Agriculture Total

Agriculture’s share of state total
Agriculture’s share of Central Valley
14.4
40.4
21.3
76.1

7.9%
25.4%
294
747
423
1464

10.1%
32.9%


California is easily the nation’s leading agricultural state, with gross farm sales of about $26 billion yearly-roughly equal to Texas and Iowa combined-but many people do not realize how important agriculture is to the state as a whole. One in every 10 jobs in California is closely tied to agricultural productivity. This includes farmers and ranchers, the hired farm workforce and the jobs involved with supplying inputs, or processing and marketing farm output. In some regions the impact is even more dramatic. Fully one third of all jobs in the Central Valley are linked to farming. And agricultural jobs are especially important in counties with relatively high unemployment and poverty rates.

Agriculture shares California’s matchless resources with about 33 million people and the diverse economy that supports them. People enjoy living here for some of the same reasons that the state is so good for agriculture: the mild Mediterranean climate, fertile soils well adapted to farming, sub-stantial water (if not always enough in the right places), access to the Pacific Rim, a well-developed infrastructure, and a strong knowledge and technology base. Thus the pressure that a large and growing human population creates for agriculture in California is a natural outgrowth of our natural and economic environment.

California agriculture is also important inter-nationally. Farm products account for about 6.5% of all California exports. The state’s farm trade balance is strongly positive, especially with Asia. Of $7 billion in yearly farm exports, about 70% goes to the Pacific Rim with Japan

accounting for about 24%, Canada 18% and Korea 7%. Exports slowed last year as Asian economies shrank, but over the long haul foreign trade is becoming even more important as markets open and diets improve overseas. Cotton has been the number one export item, but more than half of California farm exports are horticultural products.

Commodity Value Exported
(million dollars)
Share of Output Exported
(percent)
Horticultural products
Other crops and livestock
California Agriculture
3,881
3,009
7,000
21
18
19


As with the rest of our economy, agriculture in California relies on innovation. For example, this state now produces seven times more farm value per unit of irrigation water than in 1960. Overall, farm productivity in California has grown more than 1.7% per year over the entire postwar period, faster than the rest of the economy. Like other cutting-edge industries in this technological age, the dynamism of agriculture depends on the expertise and attitudes of the people involved. The innovative spirit pervades California’s agricultural valleys as much as the Silicon Valley.
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