Giannini Foundation of Agricultural Economics

1. Biofuel Policies: Robbing Peter to Pay Paul

Policies aimed at reducing carbon emissions from transportation have hit major obstacles in the past few years. In effect, these policies take money from petroleum producers and give it to renewable fuel producers, creating heated political and legal battles but little effect on consumers.

2. Which California Foods You Consume Makes Little Impact on Drought-Relevant Water Usage

To be relevant to California’s drought, discussions of water used to produce food items should focus on the irrigation water relevant to production in California. By that measure, drought-relevant water used to produce livestock products such as beef and milk is moderate compared to crop products such as wine and broccoli.

3. Europe's Migration Crisis

The European Union’s 28 member nations received 1.2 million applications from asylum seekers in 2015. One reason for the upsurge in asylum applicants is that German Chancellor Angela Merkel in August 2015 announced that Syrians could apply for asylum in Germany even if they passed through safe countries en route. The challenges of integrating asylum seekers are becoming clearer, prompting talk of reducing the influx, reforming EU institutions, and integrating migrants.

1. California's egg regulations became effective January 1, 2015. Immediately, egg prices in California were nearly double those in the rest of the U.S. as producers worked through an adjustment to new regulations. The price premium for eggs in California has narrowed but is likely to remain well above prices in the rest of the U.S. due to the continued regulatory uncertainty and higher costs associated with complying with the regulations.

2. Food and beverage processing is the third largest manufacturing sector in California. In 2012 California's food and beverage processing sector contributed $82 billion in value added to the California economy, 760,000 full- and part-time jobs, $10.5 billion in federal tax revenues, and $8.2 billion in state and local tax revenues.

3. The West Coast port delays that began in the summer of 2014 and lasted until near the end of February 2015 cost California agriculture dearly. As the delays extended into the winter, citrus exports were hit while exports of storable crops to Asia also slowed. The story for wine is more complex, because California both imports and exports wine through West Coast ports.

Incidence, Equity and Efficiency of Check-off Funded Research and Promoition Programs; Scale,

Diversification and Economic performance of Agricultural Producers;

The Food Quality Protection Act and California Agriculture

Rice production in California is intensive in input usage. Weed resistance has led to growing chemical usage and has raised costs for many rice producers in California. In recent years, widespread adoption of genetically modified (GM) soybeans, corn, canola, and cotton has provided growers of those crops with new production alternatives that reduce chemical usage. But GM rice has not yet been approved for commercial production in California or elsewhere. One reason that GM rice production has been delayed is that this new technology is controversial. In California, environmental groups and organic rice farmers are opposed to any cultivation of GM rice in the state. We estimate the potential economic impacts of commercialization of GM rice in California. Our findings suggest that this new technology would most likely benefit the California rice industry and offer significant economic advantages to growers.

We examine the determinants of the adoption of genetically modified (GM) corn and soybean varieties by Iowa producers using data collected from a survey of producers. The representative respondent increased or held constant his GM soybean acreage but decreased his GM corn acreage. Agreement with the statement that consumers will not accept some bioengineered foods was associated with a significant decline in the intended share of acreage devoted to GM corn but had no explanatory power for GM soybean planting intentions. Risk attitudes did not prove to be a significant explanatory factor, perhaps due to the existence of production risk and price risk, which may have offset each other in the acreage allocation decision. Other significant factors included gross farm income, the previous year’s acreage allocation, agreement with the statement that farmers will benefit from biotechnology, years of schooling (soybeans only), total corn acreage (corn only), and concern regarding European corn borer yield damage (corn only). An increase in gross farm income was associated with an increase in the share of GM acreage for both crops. The previous year’s GM acreage share for that crop was highly significant.

California’s nursery and floral industry is the largest of all the states in the U.S. with sales totaling about $3.086 billion in 2001. When floral and nursery product sales are combined, the industry ranks second among all California agricultural products. It accounts for 10.6 percent of total California agricultural output. A regional economic model was used to trace the direct, indirect, and induced effects of California nursery and floral production and lawn and garden retailing through the California economy. Overall, nursery and floral production and lawn and garden retailing contributed more than $10.3 billion in output in California in 2001 and were responsible for almost 169,000 jobs. Total value added attributed to California nursery and floral production and lawn and garden retailing was $8 billion, while the labor income impact exceeded $4.9 billion.

After several years of informal and formal negotiations, South Korea and the United States reached an agreement to move towards free trade in April 2007. Currently, both countries await congressional approval before the agreement can be implemented. This study explains the substance of the agricultural parts of the agreement and considers its agricultural implications.

Organic vegetable farms on the Central Coast region of California are generally intensive operations. That is, two and sometimes three crops may be harvested off the same acreage each year. Many approaches exist for growing and marketing organic vegetables. This publication describes the range of soil management practices, pest management, crop rotations, cover crops, and harvest and packing methods currently used by organic growers on the Central Coast of California. Marketing options and state and federal regulations governing organic commodities are also discussed. A general sequence of operations, equipment requirements, resource use, costs, yield and return ranges are presented for thirteen vegetable crops and two cover crops. The vegetables included are cabbage, cauliflower, cucumbers, garlic, lettuce (leaf and romaine), onions (red and yellow), snap peas, snow peas, bell peppers (green and red), sweet corn, and winter squash (large and small varieties). Barley and vetch are the two cover crops detailed.

The Giannini Reporter is a biennial summary of the activities of the Giannini Foundation of Agricultural Economics and its members. The purpose of the Reporter is to provide information on the ongoing research of the Foundation, the extension of that research, and other related activities. Members and associate members of the Giannini Foundation are University of California faculty and Cooperative Extension specialists in agricultural and resource economics on the Berkeley, Davis and Riverside campuses. The broad mission of the Foundation is to promote and support research and outreach activities in agricultural economics and rural development relevant to California.

The turn of the millennium was marked by hard times in California agriculture: low prices seemingly across the board, water-supply woes, contracting growth in export markets, more stringent regulatory environments, and declining farm income. The report begins by pondering several questions: “Is it as bleak as it sounds?” “California agriculture has experienced recurrent challenges over its history and survived—can it do so again?” “Will it be able to adjust and grow in the twenty-first century?” Major portions of the report include a stylized history of California agriculture from 1769 to 2000, identification of twenty important historical drivers influencing its evolution through the end of the twentieth century, and an assessment of changes likely to influence the future of California agriculture over the next half century. The chapters are as follows:

I. Introduction

* Direct and Indirect Indicators of a “Turn of the Century” Problem?

* External/Indirect Factors

* Consequences for California Agriculture

II. A Stylized History of California Agriculture from 1769 to 2000

* Pre-20th Century Epochs

* Epochs of the First Half of the 20th Century

* Epochs of the Second Half of the 20th Century

* At Century’s End

III. The Changing Structure of California Agriculture, Statistics, and Financial Indicators: 1950–2000

* The Changing Character of California Agriculture: 1950–2000

* Agricultural Exports

* Selected Farm Statistics: 1950–2000

* Summary

IV. Drivers of California Agriculture

* Factors (Drivers) Influencing Evolution of California Agriculture—Past

* Future Threats and/or Future Opportunities

* Drivers Influencing the Future of California Agriculture

* Concluding Comment: Factors Affecting the Future of

* California’s Agriculture

V. A Possible Prognosis for the Future

* Why California Agriculture Is Different

* Bottom Line: What Are California Agriculture’s Chances?

* Bottom-Bottom Line

VI. References

VII. Appendix

For the past twenty-five years, Dusansky and his associated co-authors have published a long series of papers which are based on the same price-dependent utility function. The alleged price dependence, however, is fictitious in the sense that the level of exogenous money income can replace the commodity prices. The consequence is that the demand functions derived from Dusansky’s utility function are identical and observationally equivalent to the demand functions obtained from a prototypical utility function. Since all the market and environmental effects are revealed only through the demand functions, the specification and use of a utility function such as that used by Dusansky is irrelevant and uninformative for the analysis of any economic problem where prices enter the consumer utility function and whose goal is the detection of the effects of price-dependent preferences on the demand for real goods.

The Giannini Reporter is a biennial publication that provides information on the ongoing research of the Giannini Foundation of Agricultural Economics, the extension of that research, and other related activities.