Category Archives: Agriculture

Contributions to transportation technologies evolved throughout the past 150 years

The list includes development of large-grain combines, crawler tractors, the centrifugal irrigation pump, mechanical fruit and nut harvesting systems, aerial application systems, etc. Unlike much of U.S. agriculture, which is dependent on machinery and equipment lines of large national manufacturers, California producers rely on mechanical technologies from several sources—from large machinery and equipment lines for general purpose tractors and combines, from foreign manufacturers for specialized, precision equipment for special production uses , and from local inventor-manufacturers who design and/or take over the manufacture of equipment that was first developed on farms and ranches for very specific needs. The industry will maintain its reliance on productivity-improving and/ or cost-reducing mechanical technologies for continued economic success.An open border and a global economy bring the possibility of new pests that adversely affect the economic productivity of California agriculture. It is increasingly difficult to provide both effective monitoring of local production areas and thorough inspection of incoming plant and animal materials for potential threats to the state’s agriculture. Some examples: the Mediterranean fruit fly threatened the state’s fruit industry in the 1980s; foot and mouth disease, mad cow disease, and Newcastle’s disease are of constant concern to the livestock and poultry industries; African bees could imperil the apiculture industry; the spread of Pierce’s disease by the glassy-winged sharpshooter has already decimated southern grape-growing regions and has the potential to cause great economic damage if introduced into other major grape-growing regions; the spread of phylloxera required removal of grapevines and replanting on resistant root stock, etc. Adaptive pest management, required to maintain the economic viability of agricultural production through variety selection,square plastic pot integrated pest-management programs, eradication programs, cultural practices, and the like, will continue to be critically important to 21st Century agriculture.

Technology will be important in delivering quality products in larger quantities to diverse markets worldwide. Drivers 8 and 9 are listed separately in our table, but here they are discussed together as they are often of joint importance to market delivery of high quality products to both domestic and export buyers. In a demand-driven system, products must be quickly delivered to consumers in an assured form and quality. The produce of California’s farms and ranches has always greatly depended on national and international markets. Early on, international markets, which could be reached by sea, were more accessible than were interior domestic markets. That changed with completion of the transcontinental railroad in the late 19th Century. Ice cooling opened domestic markets for perishables in the early 20th Century. Post-WWII construction of the interstate highway system triggered another shift in the mode of transport—from rail to refrigerated trucks—for servicing domestic and nearby Canadian and Mexican markets. More recent innovations—refrigerated container shipments and air freight—permitted development of overseas export markets. Each major innovation led to structural changes in product mixes from extensive to increasingly intensive types of agricultural production. Efficient, timely transportation will continue to be of paramount importance to the economic viability of California agriculture. Early expansions of commercial agriculture featured livestock products and nonperishable commodities —products that required minimal processing and, in a relative sense, did not require extraordinary storage skills to maintain market acceptability. Subsequent development of the fruit industry went through several major changes, first from dried fruit to development of markets for processed and frozen products and then to a major emphasis on fresh fruits. Simultaneously, the challenge also was to deliver products to markets located more distant from producing orchards and vineyards. Scientific understanding of the post harvest physiology of harvested crops grew to be of paramount importance in the 20th Century, leading to practices that include quick post harvest cooling and control of atmospheric conditions during packing, storage, and shipping.

Parallel shifts are noted for the vegetable industry, which has also moved to a predominantly fresh product form for domestic and foreign consumers. In summary, the import of improved transportation technologies impacted the industry earlier than did a focus on processing and storage. In contrast, contributions to improved or new processing and storage technologies have been of growing significance, especially during the post-WWII period, underpinning the transformation of California agriculture from a majority dependence on extensive field and livestock products to one dominated by more intensive production of fruits, nuts, and dairy products that move to worldwide markets.Financial problems in the last two decades of the 20th Century and the related wave of megamergers of regional banks into national banks have changed the lending environment. Agricultural firms no longer compete in segmented capital pools for agricultural-related loans. This has been a major structural change. Now, credit markets are mostly nationwide markets with little or no differentiation in the designated portions of loan portfolios dedicated to agricultural firms—farms and businesses. The result is that all firms compete in much larger markets, putting additional stress and uncertainty on many small- to medium-sized farms and agribusinesses. Smaller firms may be competitively disadvantaged unless they have an economically viable niche market for product or services or unless they have non-farm sources of income. The distribution of farms by size of farm has become increasingly bimodal as the industry has been exposed to the several financial challenges during the recent two decades. In California and the United States there are growing shares of small-sized farms of minor commercial significance and a relatively small number of large farms that produce the majority of agricultural production. In between there is a group of small-sized commercial farms with operators who are dependent on farm sales as the chief source of income. Our assessment continues to acknowledge the realities of a capital-intensive industry facing significant structural changes in product markets that generally favor larger over smaller producers in meeting the quantity and quality specifications of supply contracts. Some will require capital not only to expand production but also to integrate production with processing and marketing activities , involving themselves in production of a wider suite of products or in other production regions —all efforts to maximize returns on internal and external sources of capital.

Thus, for these firms, access to capital will continue to be important if they are to respond successfully to changing economic realities into the 21st Century. Our assessment also recognizes the increasing scrutiny of the creditworthiness of small- and medium-sized firms, which require higher levels of internal funding for loan security. While changes in capital markets are of limited concern to small farms that are characterized by residential, retirement, or part-time farming interests, financial stress will likely persist for medium-sized operations attempting to remain commercially viable. Viability is challenged by the low return on small levels of production and the difficulty in competing for production contracts favorable enough to attract adequate levels of external financing. Without a successful adjustment outcome, they will be destined to either exit the industry or, at best, experience even lower levels of returns on management and internal capital and/or be increasingly dependent on non-farm incomes.Labor availability and cost, always important to California growers and processors, will be influenced to greater degrees by global political and competitive conditions. The entry of waves of cheap labor pools from Asia and the Americas has been, over time, fostered both by legislated programs and illegal immigration. While past periods of uncertain labor availability and/or rising labor costs have fostered development of important labor-saving technologies, the magnitude of recent growth, as well as the intensification of agricultural production, has resulted in more than offsetting increases in labor requirements. Total hired-worker employment in agriculture grew from about 200,000 man-year equivalents in the early 1960s to nearly a quarter million by the mid-1990s. While the number of regular workers did not increase over the period,square plant pot seasonal employment did increase significantly, rising from 50 percent to 64 percent of average employment . Agriculture’s need for a cheap supply of relatively unskilled seasonal labor, as unattractive as this initial employment opportunity may be, has provided a common starting point for numerous immigrant groups who later move to more attractive jobs throughout the economy. At a time when California agriculture is nervously watching the production potentials of low-labor-cost competitors for U.S. and world market shares, two domestic policy issues loom on the horizon, casting much uncertainty about ample labor supplies. First, continued high recessionary unemployment may reduce prospects for legal, guest-worker types of federal programs. Second, tighter borders instituted as a part of elevated homeland security measures could reduce available supplies of low-cost labor to both agriculture and non-farm service employers. President Bush’s recently proposed immigration reform may reduce labor uncertainty if legislation follows to move a portion of the illegal immigrant workforce to legal, green-card status. Overall, drivers 10 and 11 are judged to be less positive for agriculture in the coming years. Both are critically important. They differ only in their effect on farms with different characteristics. Increased segmentation of financing favors farms with more favorable commercial opportunities; medium-sized farms will continue to be financially challenged. Labor availability issues concern firms of all sizes.Superior management capability and effective implementation are the hallmark of firms that achieve better economic performance even while constantly undergoing structural adjustment. Management expertise is one characteristic of firms surviving turbulent economic challenges. Successful California farmers and producers have accepted forces of change, including those often thrust upon them from external sources, as they seek to reduce per-unit costs of production as well as to react positively to production innovations and opportunities for new commodities and product forms.

Adaptive skills are a necessity, including an acceptance of inherent risks and uncertainties along with strategies for managing potential risks to the firm, whether it be a farm, a ranch, or an agribusiness that extends beyond the farm gate. Our evaluations of the three major historical epochs reflect the ever-increasing contribution of superior managerial skills to development of California agriculture. California farms and ranches, often more diverse in structure than is common elsewhere, are extremely demanding of managerial skills. The existence of multi-product, integrated firms requires higher levels of managerial expertise. Smaller firms also require superior management in order to compete. The premium for a range of superior management skills will continue to be valued in forthcoming responses and initiatives that will be key to success and survival in California agriculture.Marketing is obviously important to California farms and agribusinesses. Management and important institutional innovations contributed mightily to the growth and development of California’s agriculture, especially in the early 1900s. Among the important institutional innovations were an exemption from U.S. antitrust laws, permitting growers to act collectively to process and market their crops and to share information; bargaining through grower cooperatives ; and growers’ ability to act collectively to control various aspects of marketing their products by federal legislation and state legislation . These were especially important to the growth of specialty-crop production . As the state’s capacity to produce specialty crops expanded, several commodities quickly developed a dominant marketing cooperative that controlled a majority of the California market volume. Examples included Sunkist , Sunsweet , Sun-Maid , Almond Growers Exchange , Blue Anchor , Nulaid , Diamond Walnut , Calavo , California Canners and Growers, and Tri Valley Growers . Early emergence of marketing cooperatives especially fostered the growth and development of irrigated agricultural production featuring more perishable fruits and specialty crops, but several cooperatives also emerged for field crops, e.g., RGA and CalCot . Cooperatives gave growers the opportunity to achieve scale economies by integrating collectively to gain benefits of larger volume processing and marketing activities as well as to benefit from joint information sharing and bargaining activity . Government-organized federal and state agricultural marketing agreements also grew from inception in popularity and importance, recently accounting for 54 percent of California’s agricultural output, being most important for animal products, vegetables, and fruits and nuts and least important for field and nursery crops . Depending on the specific marketing order, producers are required by law to contribute toward financing mandated marketing programs, the most common being for quality control involving standardized grades and minimum-quality standards by inspection, generic advertising and promotion in domestic and foreign markets, and research. The contribution of both cooperatives and marketing orders has been increasingly challenged in the recent past, such that we must conclude that their importance has declined in the late 1900s and will likely continue to decline in the future .

Water then replaced labor as the dominant issue in California agriculture

Expansion of agricultural production caused groundwater overdrafts to resume in the 1940s. However, construction on the CVP was suspended during the war years , delaying the availability of new surface-water supplies to production areas with over drafted groundwater supplies. In 1948, California permanently took over as the largest agricultural state in the Union in terms of value of production .California emerged from the first half of the 20th Century as the leading state in the U.S. military/industrial complex. Its agriculture had weathered the Depression, had regained health during WWII, and was poised to expand as the CVP came online. At mid-century, the future must have been seen as a time of great promise for the state. The second half of the century, at least until the 1990s, met that promise. California’s population grew in the next 50 years from 10 to 35 million people. California gross domestic product generally grew faster than that of the United States, meaning per-capita California GDP exceeded the U.S. GDP in most years. In fact, by the end of the century, California was being touted as either the fifth or sixth largest economy in the world, exceeding Canada in both population and GDP and Italy in GDP. The growth was fueled by rapid expansion, first in the aerospace industry and then in electronics and computers. California led the nation in both fields. Also, military expenditures remained high through the 1980s. For example, in the 1960s California received 20 percent of all U.S. defense contracts . Of course, when defense cutbacks came in the 1990s, California suffered a disproportionately high share of defense reduction. Immigration slowed substantially,drainage gutter a severe recession struck the state in the early 1990s, and the state continued to suffer through a prolonged and severe drought.

A rapid recovery in the second half of the 1990s, fueled in part by the “dot com” boom, quickly collapsed into a recession in the first years of the 21st Century, bringing with it severe financial difficulties for the state. We now proceed with the last two vignettes in our epochal history. It goes without saying that it becomes more difficult to describe California agriculture in simple or brief terms. Still, despite the increased complexity, the need for brevity persists. Therefore, what follows in Epoch 7 and Epoch 8 are at best highlights and more likely are selective illustrative anecdotes.The decades of the 1950s and 1960s were boom periods in California. The population nearly doubled from a little more than ten million in 1950 to almost 20 million in 1970. The 1950s were particularly explosive; population increased by 5.1 million—a more than 50 percent increase within one decade. Incomes grew quickly as the Cold War spurred rapid economic growth, particularly in the new aircraft and electronics industries as well as in older line industries such as agriculture and motion pictures. Massive investments in infrastructure continued in water projects, highways, airports, ports, higher education, and urban development. Virtually all of the increase in population was in burgeoning urban areas on the south coast, particularly in the Los Angeles basin and the San Francisco Bay Area to the north. With rapidly expanding housing growth, mostly in sprawling single-home subdivisions, urbanization accelerated the takeover of agricultural land. In just 20 years, Los Angeles County went from producing the highest value of agricultural production in the state—and in the nation—to being out of the “top ten” California counties in 1970. Vast stretches of Orange and San Diego Counties, longtime major producers of citrus and subtropical fruits and vegetables, were developed quickly, beginning in the 1960s with the Irvine Ranch and continuing through the 1970s and 1980s.

In the north rapid urbanization quickly consumed much of Santa Clara County’s agriculture, pushing fresh- and dried-fruit production into the Sacramento and northern San Joaquin Valleys. The rapid relocation of production was able to occur, in part, because the state’s stock of irrigated land increased from less than five million acres in 1945 to more than seven million acres in 1970, peaking at around 8.5 million acres in the 1980s. Virtually all of the expansion came from publicly funded large-scale projects. Water in the Delta-Mendota Canal in 1953 signaled completion of the CVP, which “brought over a million additional acres of San Joaquin Valley land into production by the mid 1950s” . The SWP was nearing completion at the end of the 1960s, bringing in excess of a half-million new acres into production in the southern San Joaquin Valley. The cumulative impacts of population and income growth, urbanization, and new production opportunities opened by water transfer led to rapid and significant changes in California agriculture. The changes involved expansion both in the suite of crops produced and in alterations in the location of production. We identify three examples. First, Southern California’s dairy industry moved from southern Los Angeles and northern Orange Counties to eastern Los Angeles County and then to western San Bernardino and Riverside Counties in the 1950s and 1960s. The dairy industry eventually migrated north into the southern San Joaquin Valley, where it is now concentrated in Tulare and Merced Counties. Second, the citrus industry experienced a similar migration, first east to Riverside and San Bernardino, then north. Today, more than 50 percent of the state’s production is in Tulare County, compared to nearly 45 percent of production in Los Angeles and Orange Counties in 1950. Third, rapid urban development in the south San Francisco Bay Area pushed deciduous fruit production out of the Santa Clara Valley into the Sacramento and Northern San Joaquin Valleys. Using prunes as an example , in 1950 nearly 80 percent of the 100,000 bearing acres of prunes were on the central coast. The ratio of non-bearing to bearing acreage was “0.09”.3 By 1960, the non-bearing to bearing ratio for the state had tripled to 0.34, but in the Sacramento Valley it was an astounding 0.82. In those two decades, prune acreage in the Sacramento Valley increased from 20,000 to 50,000 bearing acres.

By the end of the century, virtually all prunes would be grown in the upper Sacramento Valley. And with this massive relocation came substantial increases in yields because of new trees, better varieties, higher planting densities, and new cultural practices. Prune yield in 1950 was 1.46 tons per acre, in 1970 it was 2.08, and in 1987 it topped 3.0 tons. Crops also moved as new water became available. One significant example is almonds. In 1950 half of the state’s almonds were grown in the Sacramento Valley, 25 percent in the San Joaquin Valley, and the remainder in coastal counties. There were 90,000 bearing acres and about 18,000 non-bearing acres geographically distributed in the same ratio as production. Yields averaged 0.42 tons per acre. Statewide in 1970 there were 148,000 bearing acres and nearly 90,000 non-bearing acres . Of these, 74,000 bearing acres and 70,000 non-bearing acres were in the San Joaquin Valley. In 20 years, yields doubled to 0.84 tons per acre. By 2000, 80 percent of production was in the San Joaquin Valley, 20 percent in the Sacramento Valley, and virtually none on the coast. Yields now average well over a ton per acre. The expanded availability of both federal and state water,large square pots coupled with relatively high federal commodity price supports, also led to rapid expansions in cotton and rice production despite generally low and declining field-crop prices in the 1950s and 1960s. Along with an increase in production, a significant change in U.S. commodity policy in 1965 rapidly increased exports of basic commodities because these exports were now priced competitively in world markets. The bottom line is that the 1950s and 1960s saw the beginning of a second fundamental transformation of California crop agriculture in terms of expansion, changing composition, relocation, and greatly enhanced yields. The dominant driver of this transformation was productivity growth. Traditional field crops, as a share of production, declined steadily, to be replaced by higher-valued, income-sensitive crops. Higher incomes plus urbanization accounted for the rising importance of fresh vegetables and horticulture products in California agriculture. Rising incomes after WWII also fueled a rapid expansion in consumer demand for beef. U.S. consumption rose from somewhat more than 50 pounds per capita in 1950 to almost 95 pounds in the mid-1970s. California’s livestock sector responded to that demand expansion in a big way. One of the most phenomenal growth patterns observed was the practice of fattening slaughter beef in confined feedlots. Cattle numbers in California had been flat from 1900 to 1940, at approximately 1.4 million head. Numbers increased to 3.9 million head in 1969—a 250 percent increase . Again, California led the nation in new approaches to large-scale agricultural production. However, by the 1970s, large-scale feedlots were established in Arizona, Colorado, Texas, and the Midwest, areas generally more proximate to Great Plains and Midwestern feed supplies. Also, per-capita beef consumption steadily declined after the 1970s, stabilizing around 66 pounds per capita in the 1990s and early 2000s. California’s second beef boom was replaced by the significant expansion of the dairy industry. In 1950 there were 780,000 dairy cows in California—19,428 farms with an average of 40 cows per farm. Average production per cow was 7,700 pounds of milk per year. In 1970 there were slightly less than 5,000 farms, nearly a 400 percent reduction, but the average number of cows per farm had nearly quadrupled to 150. Each cow now produced an average of almost 13,000 pounds per year—yields nearly doubling in 20 years.

The dairy transformation had begun. It would play out dramatically over the next 30 years so that in 2001 there were but 2,157 dairy farms with an average of 721 cows each and yielding more than 21,000 pounds of milk per cow. Production increased even more rapidly because the number of cows also increased from 700,000 to 800,000 in the 1950s and 1960s to 1,555,000 in 2001. The dairy industry emerged as the dominant commodity in the agricultural portfolio of California. In 1993 California overtook Wisconsin as the number one milk producer in the nation and now accounts for 48 percent of the U.S. nonfat dry milk production , 28 percent of U.S. butter , and 18 percent of U.S. cheese production . There are many other stories that could be told about the boom period of the 1950s and 1960s, but the picture that emerges is clear: a dynamic, demand-driven agriculture responding to each instance of production relocation with substantially increased productivity. Aided and abetted by a constant supply of new technology, agriculture in the 1950s and 1960s grew rapidly. It existed in a state that was growing very rapidly and getting rich fast. Despite this record of rapid growth, the next three decades were going to be even more explosive but also more unstable. Whereas the 1950s and 1960s were characterized by relatively stable prices, increased price volatility in the next three decades would lead to substantial swings in the profitability and economic sustainability of firms in California agriculture.As California agriculture entered the last three decades of the 20th Century, and despite ongoing growth in specialty-crop production, it maintained a predominant basic-commodity orientation. Field crops together with livestock and livestock products accounted for 56 percent of the value of agricultural sales in 1970. Basic commodities were priced in national markets, and California producers responded to these national prices and transportation differentials. Government policy supported stable prices. By the end of the epoch, less government policy emphasis on domestic prices became the norm along with wider price swings induced by rapid changes in both consumer and export demand for California’s agricultural produce. Many vegetables, fruits, and nuts were exclusively produced in California. At the very least, if not exclusive to the entire U.S. production, they were definitely exclusive during certain production seasons. Specialty crops enjoyed multiple market options , but those options would become less easily accessible over time. European and Asian economies, which were growing markets throughout this period, gradually gained increased influence over agricultural prices, making the California producer more exposed to offshore economic conditions. While foreign economic conditions were not a significant factor at the start of this period, they emerged abruptly in the mid-1970s and added considerable turbulence to agricultural markets during the 1990s.

A large public health literature suggests that exposure to PM harms health

The bio-chars used in this study contained both carbonized and non-carbonized domains, which potentially can express varied reactivities with sorbates and thus represent present different sorption mechanisms.Analysis of the sorption data suggests that monuron, diuron and linuron are likely binding to the bio-chars via multiple sorption mechanisms. The non-linearity of absorption isotherms varied between bio-chars. The non-linearity of sorption isotherms for monuron, diuron and linuron observed on the bio-chars is a characteristic of sorption processes arising from site-specific interactions occurring on the carbonized phase of the bio-char.The carbonized fraction of bio-chars is sometimes referred to as a “glassy” domain, whereas the non-carbonized soil organic matter is a rubbery domain.Generally, the sorption of organic compounds such as herbicides on carbonized phase of bio-char can be characterized by nonlinear adsorption ; however, sorption on the non-carbonized phase is better described by a partitioning mechanism that follows a linear isotherm.A lower non-linearity was observed in the low temperature bio-char sorption results and higher non-linearity was observed in the high temperature bio-char . These results indicate that a “glassy” domain sorption mechanism is involved in sorption of phenyluea herbicides to bio-char produced under high temperatures. The mechanism of low temperature produced bio-char sorption is similar to that involved in sorption to soil organic matter. The incomplete carbonization of low temperature bio-char results in bio-char with larger amounts of noncarbonized carbon than high temperature bio-char.

The microbial availability of carbon associated with the rubbery domain of low temperature bio-char is relatively higher than that associated with the carbonized phase of higher temperature bio-char.Hence,plastic garden pots the sorption capacity of phenylurea herbicides to high rubbery domain bio-char may be reduced over time due to degradation of the rubbery domain as bio-char ages after field application. Abundance of rubbery and glassy domains can also be inferred from the bio-char H/C ratios. Bio-chars with high H/C ratios, such as EB, contain larger amounts of the original organic residues. A decrease in H/C ratio indicates more complete carbonization and higher saturation in the bio-char. The 1/n value for diuron and linuron sorption data increased with the atomic H/C ratio of bio-chars, which indicates that the higher the aromaticity of sorbent, the higher the non-linearity of the sorption isotherms. It is noted that this positive correlation was observed in the higher Kow herbicides , but not in the lower Kow herbicide . This indicates that glassy domain of bio-chars plays an important role in high lipophilic herbicide sorption. The high sorption capacity of bio-chars for the phenylurea herbicides reported in this study is consistent with previously published data.Bio-char amendment to agricultural soil significantly enhanced sorption of linuron and diuron and reduced leaching of 12 kinds of phenylurea herbicides from soil to groundwater.The large capacity for bio-charsto adsorb herbicides also substantially reduced leaching of linuron, alachlor, and metalaxyl in a sandy soil. Sorption capacity of herbicides to bio-char amended soil can be lower than theoretical sorption capacity based on bio-char and soil sorption capacity measured by batch sorption experiments. Organo-mineral interactions between soil and bio-char can compete binding sites on bio-char surface with herbicides, which can diminish bio-char herbicide sorption capacity.During the ageing of bio-char, the organo-mineral interactions can also convert binding sites on bio-char surface, which can also influence herbicide sorption capacity of bio-char amended soil, both positive and negative impacts reported previously.On the other hand, bio-char amendment can reduce the effectiveness of pesticides in soil and has been shown to reduce the bio-availability of herbicides to weeds in soils.

This could require increased inputs of herbicides and increased costs of agricultural management. However, the increased adsorption capacity, if managed correctly, could possibly provide a mechanism that would permit a slow release source of herbicide from bio-char and thus lengthen the period of effectiveness of the herbicide application. Based on both lab and field scale experiments, the transport of herbicides in soil depends not only on soil properties but also climatic conditions, especially hydrological processes, such as rainfall events and soil moisture condition. These two factors can also impact the long term effects of bio-char soil amendment and interact in the ageing of bio-char. Sorption capacity of aged bio-char has been observed in some cases to decrease with time and, in other cases, remain similar to the behavior of freshly added bio-char.Based on the results above, herbicide application rates may need to be adjusted depending on how a particular bio-char ages and particular environmental conditions; this topic deserves more research. The deliberate setting of fires as a tool for agricultural management has a long history that remains ubiquitous around the world today . In modern agriculture, the principal benefit from these fires takes the form of avoided labor costs otherwise required to clear brush, remove crop residues, and manage invasive plant species . At the same time, these fires generate considerable smoke comprised of a number of pollutants that are known to be harmful to human health . Yet, the direct study of the causal relationship between agricultural fires on human health has been greatly hampered by concerns of endogeneity and the competing benefits and costs from local fires. One notable exception is the recent study by Rangel and Vogl , which examines the impacts of sugarcane harvest fires in Brazil on infant health by exploiting wind direction for empirical identification. Given the emergent literature showing that pollution can also harm a range of other human capital outcomes , the goal of this paper is to examine the impacts of agricultural fires on one important component of human capital – cognitive performance.

Our analysis of impacts on young and healthy adults in a high-stakes environment, generalizes and extends evidence from a recent working paper that examines the impact of fires on survey-based measures of cognitive decline amongst the elderly in China . More specifically, we exploit high-resolution satellite data on agricultural fires in the granary regions of China and a unique geocoded dataset on test performance on the Chinese National College Entrance Examination to investigate the impacts of fires on cognitive performance. This setting is attractive for a number of reasons. First, the majority of agricultural fires take place in the developing world where environmental controls are less stringent and the returns to human capital are generally substantial. China, in particular, is the largest grain producer in the world, with approximately one-third of all grain cropland managed through burning practices. 1 Second, the NCEE is one of the most important institutions in China. It is taken by all seniors in high school and the exam score is almost the sole determinant of admission to institutions of higher learning in China. As such, the NCEE serves as a critical channel for social mobility with important implications for earnings over the life cycle . Test takers face high-powered incentives to do as well as possible on the test and thus any impact from agricultural fires is likely to represent an impact on cognitive performance rather than effort. Finally,square pots several features of the NCEE make it particularly well suited to causal inference. The exam date is fixed, and thus self-selection on test dates are impossible. Fortuitously for our research design, the exam takes place during the height of the agricultural burning season. Moreover, students must take the exam in the county of their household registration , rendering self-selection on exam locations virtually impossible. Our NCEE data includes test scores for the universe of students who were admitted into colleges and universities between 2005–2011 from the granary regions which form the basis of our study. Despite the many virtues of our empirical setting, identifying the causal effect of agricultural fires on cognitive performance is challenging for reasons alluded to earlier. Agricultural fires are designed to reduce labor demands and improve farm profitability, both of which could also impact test performance. For example, if some agricultural labor is typically supplied by students, agricultural fires could improve test performance by providing them with more time to prepare for their exams. To address concerns of this type, we follow the approach recently pioneered by Rangel and Vogl , and leverage exogenous variation in local wind direction during the exam period. Specifically, we compare the effect of upwind and downwind fires on students’ test scores, and interpret that difference as the causal effect of pollution exposure on students’ cognitive performance net of economic impacts. The implicit assumption under this approach is that, ceteris parabus, students upwind and downwind of the fire are differentially exposed to its pollution but share equally in its economic influences. Our results suggest that a one-standard-deviation increase in the difference between upwind and downwind fires during the NCEE decreases the total exam score by 1.42 percent of a standard deviation , and further decreases the probability of getting into first-tier universities by 0.51 percent of a standard deviation. These impacts are entirely contemporaneous. Fires one to four weeks before the exam have no impact on performance. Reassuringly, neither do fires one to four weeks after the exam. The results are robust to alternative approaches for assigning pollution to test takers as well as a number of other specification checks. While a lack of pollution data from our study period does not allow us to utilize fires as an instrumental variable, data from a more recent period suggests that, consistent with evidence from Israel these cognitive impairments are likely the result of exposure to fine and coarse particulate matter. Together, these results suggest that agricultural fires impose non-trivial external costs on the citizens living near them. They also contribute to ongoing debates about the appropriate role of standardized testing in determining access to higher education and employment opportunities .

While our analysis is based on NCEE test performance, the impacts are likely much broader, touching all aspects of life that rely on sharp thinking and careful calculations. Indeed, the impacts in lower-stakes environs may well be larger as the incentives to succumb to the fatigue and lack of focus that also typically accompanies exposure to pollution are greater, and thus more likely to exacerbate any impacts on cognitive decision making. Given the importance of human capital for economic growth , these impacts should play an important role in the calculus of developing country policy makers when designing rules to manage the use of agricultural fires. The rest of the paper is organized as follows. In Section 2, we provide more background on the institutional setting. In Section 3 we describe each of the elements in our merged dataset. Section 4 describes our empirical strategy followed by our results in Section 5. Section 6 offers some concluding remarks. The practice of burning crop residues after an agricultural harvest in order to cheaply prepare the land for the next planting is commonplace across the developing world . While such burning can greatly reduce labor costs to farmers and potentially help with pest management, it also generates considerable particulate matter pollution . Particulate matter consists of airborne solid and liquid particles that can remain suspended in the air for extended periods of time and travel lengthy distances.These risks arise primarily from changes in pulmonary and cardiovascular functioning , which may, in turn, impair cognitive performance due to increased fatigue and decreased focus. Particles at the finer end of the spectrum are particularly important in our empirical setting since they are small enough to be absorbed into the bloodstream and can even become embedded deep within the brain stem . This can lead to inflammation of the central nervous system, cortical stress, and cerebrovascular damage . As such, greater exposure to fine particles is associated with lower intelligence and diminished performance over a range of cognitive domains . Consistent with this epidemiological evidence, a recent study of Israeli teenagers found that students perform worse on high-stakes exams on days with higher PM levels . As the name suggests, the NCEE is a national exam used to determine admission into higher education institutions at the undergraduate level in China. It is held annually on June 7th and 8th, and is generally taken by students in their last year of high school. In contrast to college testing in the U.S., it is almost the sole determinant for higher education admission in China.

Capsules have been used to encapsulate a variety of hydrophobic agrochemicals

Amphiphilicity was invoked by partially functionalizing hydrophobic PSI to form hydrophilic units, allowing for the polymer toself-assemble with a core that sequestered the model water insoluble agricultural compounds: Nile Red, Coumarin, or naphthaleneacetic acid. Upon exposure to alkaline pH, the hydrophobic succinimide portion of the polymer hydrolyzed to water-soluble aspartic acids, and the hydrophobic cargo was released from the now fully hydrophilic polymers. Furthermore, the small size of the nanoparticles and negative surface charge enhanced their internalization into plant cells, demonstrating promise as a smart nanodelivery system for delivery of agrochemicals in plant phloem. Similarly, the Sawamoto and Maynard lab collaborated to create a self-folding, amphiphilic copolymer of trehalose monomer, fluorinated monomer, and PEG monomer.Here, the fluorinated hydrophobic segment enabled the capture of a fluorinated pesticide in water. However, efficient release of the pesticide from the nanoparticles was not demonstrated, so the use of these fluorous interactions for the delivery of agrochemicals needs to be explored further.Liposomes are vesicles with inner aqueous cores surrounded by a lipid bilayer that are stable in aqueous environments, making them effective carriers of hydrophilic cargo.While liposomes have been used for agricultural application, their combination with polymers has been minimally explored, despite promising results. Karny et al. created a 100 nm polymeric liposome and tested for its ability to penetrate and distribute throughout tomato plants. They loaded the system with europium or fluorescein so the bio-distribution of liposomes could be monitored and saw translocation from the plant leaves to the roots and adjacent leaves. In cells,macetas de 5 litros the liposomes were closely associated with the nuclei, and the internalized dye released, staining the entire cell body.

Finally, the liposomes were loaded with Mg or Fe and sprayed onto Mg- and Fe-deficient tomato plants. After two weeks, the tomato plants with these treatments demonstrated significantly improved recovery compared to the commercial control formulations, demonstrating that liposomes could be promising materials for intracellular delivery of plant nutrients.Lin et al. developed a polyelectrolyte complex through electrostatic interactions between a cationic feather keratin and anionic carboxymethyl cellulose to encapsulate hydrophobic insecticide, avermectin.The hydrophobic feather keratin and avermectin assembled in the core of the complexes while the carboxymethyl cellulose polymers assembled on the exterior. Notably, the study demonstrated that as the pH of the release buffer increased, the mechanism of release transitioned from Fick diffusion to non-Fick diffusion. The authors hypothesized that this was due to the negative charge on keratin at higher pHs, resulting in repulsion from chitosan and disassembly of the complex. Polymeric materials have also exploited host-guest chemistry where hydrophobic guest molecules are sequestered in the core of a host molecule with a hydrophobic core and hydrophilic exterior. Chitosan or alginate polymeric nanoparticles functionalized with b-cyclodextrin, a host molecule, have been utilized to form inclusion complexes with hydrophobic and volatile insecticides, carvacrol and/or linalool.While these systems do not rely on self-assembly of the nanoparticles, the addition of b-cyclodextrin to the hydrophilic polymers created an amphiphilic system that captured hydrophobic actives, and the system enhanced the water solubility while decreasing the volatility of these compounds. The system demonstrated high encapsulation efficiencies while being more active against mites than the free insecticides. Micro- and nano- capsules are carriers that are typically made with a hydrophilic, water permeating polymeric shell and lipophilic core which carries hydrophobic cargo.

Capsules with liquid cores are typically created by templating emulsions and traditionally have used toxic emulsifiers and organic solvents.For a more sustainable and green approach, Tang et al. used Pickering emulsions to create polydopamine microcapsules for the encapsulation of an essential oil, turpentine, and pesticide, 4-chloro-2-methylphenoxyacetic acid .Emulsions of turpentine and 2,4-D were stabilized by solid cinnamoyl chloride-modified cellulose nanocrystals and acted as a template to produce the PDA capsules. Both turpentine and 2,4-D were slowly released from the capsule as compared to the free pesticide controls. Another intriguing example of a capsule system utilized proteinoid polymers, produced by the step-growth polymerization of natural and unnatural amino acids, that self-assembled into a nanosized hollow nanoparticle to balance the hydrophobic and hydrophilic components within the proteinoid backbone.This system was implemented for the encapsulation of auxin plant hormones and was externally modified with dodecyl aldehyde or Cyanine3 dye to increase the particle hydrophobicity for better foliar application or allow tracking of the nanoparticles within a plant’s vascular system, respectively. Interestingly, a proteinoid backbone contained a conjugated amino acid herbicide was also tested and found to be toxic to plants without any internalized actives. Previous studies demonstrated that the amino acid is only active in its monomeric form, so the authors hypothesized that the free amino acid herbicide was releasing from the peptide chain via biodegradation. Although this idea was not further explored in this study, other conjugated actives have been explored in agricultural settings. In addition to formulations based on non-covalent interactions, agrochemicals have also benefited from chemically binding to small molecules or polymers which further optimize formulation physicochemical properties, selectivity, and biological activity . Amino acid or glucose conjugation of fungicides and insecticides have improved their plant phloem mobility,lipid-like amphiphilic-conjugates of agrochemicals have induced self-assembling behavior,and hydrophobic moiety conjugates of herbicides have enhanced their water and soil stability.

While some of these conjugation strategies are irreversible, others form reversible linkages which eventually convert to an active parent ingredient , thus improving their selectivity.Traditionally, propesticides are inactive and require a transformation event within the target organism or surrounding environment to release an active chemical. Studies have focused on the chemical linkage of a limited set of agrochemicals containing carboxylic acid, amine, or alcohol functional groups. These groups provide scaffolds to form hydrolytically- or enzymatically-reversible ester or amide linkages. While some of the systems discussed in this section exist in forms discussed in the previous section , these examples are specifically highlighted here for their chemical linkage and cleavage strategies. Agrochemicals with carboxylic acid moieties are hydrophilic in nature and are therefore susceptible to leaching and contaminating groundwater. To prevent these adverse effects, herbicides and plant growth hormones with carboxyl functional groups have been modified with polymers through ester or amide linkages. The herbicides 2-methyl-4-chlorophenoxyacetic acid or 2,4-D have been applied as an anionic initiator for ring opening polymerizations to form ester-linked, end-functionalized degradable polymers.Compared to the free herbicide, these polymers released lower concentrations of the herbicide over time while still effectively preventing weed growth. Additionally, the herbicide-polymer conjugate was incorporated into a biodegradable mulch film, demonstrating the potential functional versatility of polymeric formulations. Through amide or ester linkages, 2,4-D has also been incorporated as a pendant group of a degradable polymeric backbone. One study demonstrated pH-dependent hydrolysis of a combined ester-amide linkage with the herbicide releasing faster in alkaline versus acidic conditions.Another study used a cysteamine- modified 2,4-D, creating an amide linkage and free thiol that could react with PDA nanoparticles via Michael addition.This study compared the release of conjugated 2,4-D and the release of non-conjugated 2,4- D from PDA nanoparticles. They observed a significant difference in the release kinetics, where, over 190 hours, only 10 % of the amide conjugated herbicide released in various pH solutions as opposed to 30-60 % release of 2,4-D when only physically encapsulated. This direct comparison shows release kinetics can be tuned by conjugated agrochemicals. However, the conjugated nanoparticles did adhere less to leaves than their physical encapsulation counterparts, indicating that when some of the PDA catechols are substituted, their adhesive properties diminish.

While these examples focus on the hydrolytic response of the herbicide release and polymer degradation, other reports have demonstrated that herbicide conjugates with amide and ester linkages can also be cleaved when exposed to photochemical or biochemical stimuli. Yin and Yi reported the grafting of 2,4-D to PEG through an ester-linkage to a photo-labile onitrobenzyl group.Due to the amphiphilic nature of the hydrophilic PEG polymer with hydrophobic 2,4-D-modified end group, micelle formation in aqueous conditions was reported. The micelles were photo-responsive, demonstrating no herbicidal release without light irradiation and quantitative release over nine days with solar simulated irradiation. These types of systems also have the potential to increase the water solubility of the hydrophobic active ingredients they carry. Enzymatically-responsive amide-linked systems have also been prepared with gibberellin, plant growth regulator,macetas cultivo conjugated to amino groups on the biopolymer.118 While the conjugate slowly released gibberellin when subjected to hydrolysis, the response was much faster when subjected to amidase or amidohydrolases, enzymes abundant in plants. Moreover, the conjugate improved the solubility of gibberellin and protected it against thermal- and photo-degradation.Similarly, agrochemicals with hydroxyl groups have been conjugated to polymers through ester linkages. In particular, plant growth enhancing brass inosteroid synthetic analogues have been modified with carboxylic acid-containing PEG micelles,chitosan, hyaluronic acid and silk fibroin.Due to the hydrophobicity and quick metabolism in plants of brassinosteroids, their application in agriculture has been limited. However, when modified with PEG, the amphiphilic conjugate forms a micelle in aqueous solutions and establishes controlled release and extendedstabilization of the steroids. Moreover, bio-assays of radish seeds with the conjugate demonstrated increased biomass compared to the unconjugated control. The other polymeric conjugates with biopolymers, silk fibroin, chitosan, and hyaluronic acid, exhibited pH and/or temperature controlled release of the steroids in aqueous solutions. These systems show the modularity available in conjugate systems; various polymers can be utilized with the same agrochemicals as long as they contain a compatible functional groupAgrochemicals with amino groups have also been chemically grafted to carboxyl groups on polymers, forming amide linkages. Emamectin benzoate, a photochemically-labile insecticide with a free amine, was transformed into an acrylamide monomer and co-polymerized with butyl acrylate and methyl methacrylate monomers to form nanoparticles.The nanoparticles dramatically improved the stability of emamectin benzoate with approximately 30 % decomposed after three days under simulated sunlight, compared to 90 % decomposition of the control pesticide.

Additionally, the particles demonstrated enhanced toxicity against Helicorvapa armigera pests compared to free emamectin benzoate. Here, reversibility was not demonstrated, so it is unclear if the conjugate itself is active or if it is a proinsecticide. Another amide conjugate was synthesized through the amino group of kasugamycin, an antibiotic used for plant disease control, and the carboxyls of the biopolymer pectin.The conjugate was stable to UV irradiation and a range of pH and temperatures, but released upon incubation with a pathogenic bacteria that causes melon bacterial angular leaf spot, Pseudomonas syringae pv. lachrymans, due to its enzymatic response.Hydrogels are three-dimensional polymeric networks that hold large quantities of water and have been utilized in a myriad of applications due to their tunable properties. Natural or synthetic polymers can form these scaffolds where synthetic polymers offer more control over gel properties and less batch-to-batch variability than natural polymers.Depending on the functionality of the polymers and implemented cross-linking strategy, synthetic hydrogels have been used for diverse applications such as tissue engineering,drug-delivery,and soil amendments.In particular, they are attractive scaffolds for the encapsulation, stabilization, and controlled-release of water-soluble bio-macromolecules like proteins due to their porous structure and water content. The encapsulation of proteins can occur during hydrogel formation11 or via diffusion into the hydrogel’s pores post-synthesis.The latter method allows for the synthesis of bulk hydrogels, which can later be employed to immobilize a scope of proteins, including enzymes that are used for various industrial applications. In this work, trehalose hydrogels were prepared for the encapsulation of enzymes and subsequent protection to thermal stress, which is known to inactivate proteins often via changes in protein conformation and formation of insoluble aggregates.Trehalose is a disaccharide formed by a,a-1,1-linked glucopyranose units and is upregulated by organisms during prolonged terms of desiccation.The accumulation of trehalose protects proteins,allowing the survival of these organisms in extreme environments including high temperatures. We have previously developed trehalose-functionalized materials for thermostabilization of proteins,including a trehalose hydrogel.However, the yield , scalability, and sustainability of the hydrogel synthesis needed significant improvement to be useful. Herein, we report a scalable trehalose hydrogel synthesis with high yields that employs more environmentally benign solvents. Additionally, the ability of the gel to thermostabilize three major enzymes utilized in animal feed, as well as a relevant enzyme release rate, is described, supporting its potential usefulness for the livestock industry.We reported a straight-forward gel synthesis by first modifying trehalose via Williamson etherification using 4-vinylbenzyl chloride and sodium hydroxide in dimethylsulfoxide to produce mono- or multi-functional styrenyl-trehalose.After a precipitation step to remove DMSO and other impurities and to isolate the crude reaction mixture, the mixture was dried to a yellow powder prior to polymerization in water.

The California version of the CAFO problem largely involves the development of larger dairy farms

California agriculture during this period also became a more regulated industry, particularly in the use of pesticides and other chemicals and in its impacts on water quality, as a result of the expanded public interest in environmental and health protection. By now it is a truism in California that the agricultural-urban edge problem is a serious consequence of our continuing urbanization and land use patterns. Along with decrying the urban “paving over” of rich farmland, newspaper accounts frequently document specific examples of edge conflicts between farmers and residential neighbors. In some respects edge conflicts are a more serious California problem than the direct loss of farmland to urban uses. While the farmland conversion rate currently averages about 50,000 acres statewide annually, edge tensions continually affect many times as many agricultural acres. This discussion, however, is largely informed by anecdotes and impressions. It lacks a body of solid and research-derived evidence about problem causes, circumstances, and solutions. We recognize the widespread existence of the edge problem in California, but we don’t understand in a systematic way how it varies in intensity and impacts different communities, farm commodities, urban configurations, and other circumstances. Clearly conflicts and negative impacts are not found in all the places where farming and urban residences are in close proximity; some edges are characterized by a peaceful coexistence between farmers and urban neighbors. This paper is an exploratory examination of the edge problem in California agriculture that is drawn from a variety of sources. Considering the lack of systematic research in California,cultivo de la frambuesa some of these sources are studies carried out in other states.

We review here available information about the extent of urban-farm borders in the state, the nature of impacts on both sides of the edge, variations in the extent of the problem, farm operator adaptations in urban-influenced areas, and policy and private-sector mechanisms for dealing with the problem.Agricultural-urban edges are pervasive throughout California. By one linear measure, in 1998 urban areas throughout the state were bordered by 17,301 kilometers of all kinds of agricultural uses—or 10,726 miles. About two-thirds of this total represented cropland and one-third grazing land. The calculations are based on the digitized maps generated by the Farmland Mapping and Monitoring Program of the California Department of Conservation. Combining soil survey information with the results of aerial photographs, the FMMP every two years maps the agricultural and urban land uses of most of the non public lands territory of the state with an emphasis on tracking farmland conversions to urban use. The estimate of 10,726 miles is probably an under count of true extent of the total edge distance, since the FMMP does not map a few agricultural areas of the state where modern soil information is lacking, and the mapping does not capture isolated urban pockets of less than 10 acres . This thin, linear measure does not give us a sense of how many farms or how much agricultural land is actually located adjacent to urban uses in California. It is difficult to translate kilometers and miles into a more meaningful area measure, such as acres, without knowing more about farm sizes in relation to linear borders. A conservative estimate is that about 2.2 million agricultural acres statewide are located adjacent to urban edges, based on the assumption that urbanization affects farm operations up to a third of a mile on the average from urban borders. This represents about 8 percent of California’s 28 million total agricultural acres.The same assumption produces an estimate of 1.5 million cropland acres in edge areas, about 13 percent of all cropland in the state.Cropland edges in California are concentrated in the leading agricultural counties—the counties with the highest farm market values and most of the best cropland defined as prime farmland. Table 1 makes this point in examining the edge circumstances of cropland in the 12 top counties in farm market value, including seven Central Valley and three coastal counties.

All but the bottom two on the list had market values in 2000 of at least $1 billion each. Most of the state’s urban-cropland borders are found in these high value counties—6,465 kilometers in 1998, or about 90 percent of the state’s total. Moreover, they are among the leading counties in prime farmland, 2.6 million acres in 1998, most of the state’s total of about 4.3 million prime acres. Table 1 also notes the large increase in cropland-urban edge borders in the ten years between 1988 and 1998—an average of a 22.9 percent increase in edge kilometers for the 12 counties. This reflects of course the comparable increases in population and urban areas during the approximate or same ten-year periods. However, for several counties—Fresno, Tulare, Monterey, Kern, and San Diego—percentage increases in cropland edge kilometers vastly exceeded the increases in population and acres devoted to urban use.Identifying the extent and location of geographical edges tells us little about the incidence and intensity of the conflicts and the specific issues that arise from the close proximity of farms and urban neighbors. We can speculate that such conflicts are concentrated in a relatively few places throughout the state, while farm-urban relations are generally peaceful in most edge areas. The reasons are that urbanization proceeds at varying rates in different communities, farmers generally adjust their operations to edge realities, and most residential neighbors learn to tolerate some discomfort from nearby agricultural operations as the price to pay for living in the countryside. Still there is substantial anecdotal information about the types of impacts that qualify as edge problems. The common understanding in California’s agricultural areas is that farm operators and residential neighbors are affected in particular ways by their respective behaviors. As duplicated in Table 2, a short list of such issues was included in the summary report of the 1996 conference, California’s Future: Maintaining Viable Agriculture at the Urban Edge, organized by the UC Agricultural Issues Center. Longer lists of edge issues are found in other reports, including those issued in other states.

A New York State guidebook on reducing edge conflicts, for example, identifies 26 different kinds of rural residents’ complaints against farmers, including unsightly farmsteads, trash, inconsiderate behavior by farmers, and wandering livestock . What is clear from Table 2 is that farmers and residents at the edge differ in their interests and views of how they are negatively affected by their interactions. For farmers, the issues largely concern the costs and efficiencies of producing their commodities—largely economic considerations. For residential neighbors, the impacts deal with questions of health and quality of life. This difference in how edge issues are defined bythe respective parties suggests how difficult it may be to resolve such issues when conflicting positions are strongly held.Obviously edge issues are not equal in their distribution and how they are perceived by the parties to these conflicts. We expect the extent and intensity of edge problems to vary from location to location, depending on the characteristics of both the agricultural and urban sides of the boundary. Critical agricultural variables are the types of commodities grown and the farm practices used to produce them. In California,macetas de 10 litros conflicts over the agricultural use of pesticides and herbicides seem to be more visible and widespread than in most other farm states. Our state specializes in tree, vine, and vegetable crops that require extensive cultivation and protection from pests. Much of the production of such crops occurs in edge areas, where high costs for purchasing or renting agricultural land impels operators to grow high value and high yield commodities. What may limit in many localities the extent of neighborhood opposition to farm use of pesticides and other chemicals is the tight regulation of such applications by state and local governments in California. Human health risks and potential water contamination are controversial issues. Regulation takes place primarily through the permitting actions of county agricultural commissioners, the licensing of applicators, and the work of county health departments. Despite these controls, excessive drift from aerial and ground spraying is an ever-present concern. Residents in some agricultural communities, either attributing specific health problems to spray drift or fearing the risk, have organized to protest chemical use and to question the adequacy of the regulatory system . In many other states the most conflictual farm-urban issues increasingly revolve around the location and effects of concentrated animal feeding operations, a type of agricultural activity that now has its own acronym—CAFOs. Reflected here is the growing industrialization of animal agriculture in the nation, marked especially by the trend in southern, eastern, and mid-western states to larger and more specialized hog and poultry raising operations . Local operators typically are integrated via contractual arrangements into the feed, processing, and marketing processes of national firms. From a community and environmental perspective, the most critical feature of these factory farms is the concentration of so much animal waste in such small areas—the “piling up of too much stuff in one place” according to one observer . The threat to surface waters and aquifers is the central issue.

Public agencies are not always aggressive in controlling the citing of such farms and in overseeing their waste disposal processes. CAFOs also generate other negative impacts in their neighborhoods, primarily odor and air pollution.As noted above, this is a major public policy issue in the southern San Joaquin Valley, now the most productive milk shed in the nation. County governments through their planning and land use powers are largely responsible for controlling the location of new or enlarged dairies, while the water quality aspects of dairy operations are in the hands of environmental regulators in state and federal governments.The key variables on the urban side of edge areas are the characteristics of residents and the configurations of their urban neighborhoods. Certainly the negative impacts of living next to certain kinds of intensive farming operations have a clear and objective reality. Nobody likes dust on their backyard laundry, to be awakened at 5 a.m. by the sound of heavy machinery, or to be subject to possible exposure to the drift from chemical applications. Yet, perceptions also determine how people personally regard and react—or don’t—to such conditions. Levels of tolerance to farm operations vary quite a bit, with some urban neighbors more disposed than others to identify specific incidents as more than minor annoyances and more inclined to complain to farmers and government offices. What seem to generate such perceptual differences, according to anecdotal information, are lifestyle backgrounds. The generalization is that newcomers who move to agricultural locations directly from urban areas are less tolerant of the discomforts of living close to farms than longtime residents who have farm or other rural backgrounds . Particularly contributing to the unhappiness of urban newcomers with their new neighborhoods is how the realities of intensive agricultural practices clash with their expectations of pleasant living in the country. Notes the major of Patterson, an expanding small city in western Stanislaus County: “Most of us have grown up with crop-dusters at dawn, but not the new constituents” . Lacking so far systematic research on the topic, this generalization about levels of tolerance is merely a reasonable hypothesis. The configuration of residential neighborhoods in edge areas also likely affects the extent of conflict. The larger the exposure or interface between farm activities and non-farm residences, the more opportunity for problems. By implication, this is an argument for planning and residential design that confines urban development in relatively small blocks, as compared to a pattern of scattered home sites throughout an agricultural area. The difference is between sharp, solid edges separating farms and residences and ill-defined and fragmented edges that blur the distinction. A separate kind of problem is posed by the location in the middle of agricultural areas of schools, churches, and other facilities that concentrate large numbers of people at certain times.As well as immediate impacts, there are also long-term consequences for agricultural operations located in areas of ongoing urbanization. Some writers refer to the “impermanence syndrome,” a term which takes in a variety of meanings, but generally suggests a high degree of uncertainty among farmers about their ability to continue productive operations in areas beset by rapid population increase and land use change.

It may be that this is a change in reporting practices rather than an actual change in acreage

Society may seek to provide assistance to the farmer both for protecting the environment and for maintaining the rural way of life. This desire to maintain the scenic and recreational amenities of agricultural areas can also translate to private incentives for conservation of agricultural activities and the environment. For example, vineyards in northern California’s wine country are sources of tourist revenue as well as income from wine production. The wineries benefit directly from the crowds of visitors who crowd the tasting rooms every weekend, and the region is home to numerous bed and breakfasts to house these guests. Such examples of “agri-tourism” can be pursued anywhere that farm activities are scenic, rather than noxious, from the point of view of the potential visitor. In California, agri-tourism activities also include dude ranches, self-pick berry and apple farms, corn mazes, and farm-animal petting zoos . The potential economic impact of these activities is unknown, but it may be informative to note that golf courses, a quasi-agricultural land use, resulted in a total sales impact in California of $7.8 billion in 2000, directly supporting over 62,000 jobs . In the preceding discussion of dairy production, we noted that the negative externalities involved in dairy production counteract the other benefits of having these facilities located close to population centers. In contrast,frambueso maceta the positive externalities associated with the recreational and environmental amenities of some farming activities are magnified when these operations are located closer to urban areas. Although Napa Valley wine would still taste as sweet if it were located 200 miles further from San Francisco, there would be far fewer people enjoying a drive through wine country on any given Sunday. Everything being equal, farmers who are closer to population centers will be able to reap greater private benefit from provision of new agri-tourism opportunities.

The California Organic Foods Act , signed into law in 1990, provides protection to producers, processors, handlers and consumers in that foods produced and marketed as organic must meet specified standards. As part of the regulatory process, COFA requires annual registration of all processors, growers and handlers of commodities labeled as organic. State registration is separate from, and does not act as a substitute for, organic certification. Registration is mandated by state law and is administered by CDFA while certification is mandated by federal law and is conducted by certification organizations accredited by USDA. The Organic Foods Production Act of 1990 requires the United States Department of Agriculture to develop national organic standards for organically produced agriculture and to develop an organic certification program. The final regulations for implementation of the OFPA were published in the Federal Register in December, 2000. The new rule took effect April 21, 2001 and marked the beginning of the transition period. Full compliance with the rule was required by October 20, 2002 at which time products began to use the National Organic Program organic label. The final rule includes a list of allowed synthetic and prohibited non-synthetic materials as well as labeling requirements. Unlike COFA, OFPA requires all growers grossing $5,000 or more to obtain certification from a USDA accredited certification organization.Interest in organic agricultural production has never been greater due to the continuous and rapid rate of expansion and the relatively higher prices commanded for organic products. This chapter quantifies the current size and growth of the organic industry in California with respect to acres, farm gate sales, and number of growers. The chapter looks at size and growth with respect to major commodity groups and sub-regions of California. The state’s counties are divided into eight geographic regions based on similar groupings used by the California Department of Food and Agriculture in their annual statistical reports . The six major commodity group classifications presented also parallel the CDFA reports and include: field crops; fruit crops; nut crops; livestock, poultry and products; nursery, forestry and flowers; and vegetable crops . The most important individual commodities will also be discussed.

When interpreting the results, the following points should be considered. The numbers contained in this chapter are derived solely from information provided in the annual registration forms of organic growers. In other words, the numbers are presented as reported to CDFA by growers. Only sales from products marketed as organic are required to be reported to CDFA. This means that income from sales of organically grown products sold in the conventional market may not be included. Similarly, income from government payments is not reported. Further, the registration information does not reveal whether or not a farm also has conventional production. Therefore, the size of the farm operation is not known from the registration data; only the size of the organic enterprise is known. There are a number of conventional growers in California who devote only a portion of their total acreage to organic crop production. Therefore, some of the growers that are categorized as “small” or “medium-sized” organic farmers may actually be larger conventional growers experimenting or diversifying with some organic acreage. Under CDFA regulations, producers of organic commodities pay graduated registration fees based on an operation’s total sales. However, registrants grossing over $5 million annually were not obligated to report sales above that amount prior to 2003. While most registrants reported actual amounts over $5 million, some registrants reported at the ceiling. Therefore, the total value of production in this chapter is undoubtedly underestimated because income realized by some high-revenue producers may not have been fully accounted for.Produce includes the commodity groups of most consequence to registered organic agriculture in California. In 2002, produce was grown by the majority of organic farms and acreage . Compared to all of California agriculture, produce is an even greater proportion of organic marketings than conventional marketings, representing 84 percent of total organic sales and 60 percent of total sales from California’s agricultural commodities. In contrast, livestock, poultry and products represent only 8 percent of organic sales in 2002 but routinely contribute more than one fourth of statewide income from agriculture. In 2002 there were 45 different commodities with over $1 million in organic sales. The highest grossing commodity was grapes followed by lettuces, carrots, strawberries and tomatoes . Of the top 20 grossing commodities, eight were fruit crops , seven vegetable crops , two livestock commodities and one nut crop . The top 20 commodities represented 60 percent of total sales.Produce growers represented 78 percent of the total number of growers in 2002 . Almost half of all organic growers produced fruit crops, about one fourth grew vegetable crops and 11 percent grew nut crops.

Field crops were grown by 11 percent of producers, nursery and flowers by 8 percent and livestock, poultry and products by only 3 percent. These percentages don’t add to 100 because over one third of organic growers reported sales in more than one commodity group,cultivar frambuesas most typically vegetable crops and fruit crops. Over half of the registered organic growers grossed under $10,000 in 2002 while three percent grossed over a million dollars . Ninety percent of sales were from the 17 percent of growers grossing $100,000 or more. The remaining 10 percent of sales was captured by the 83 percent of growers grossing under $100,000 in annual sales. Over one third of the state’s total organic acreage was located in the San Joaquin Valley in 2002 . Vegetable crops comprised 42 percent of that acreage, fruit and nut crops 27 percent, and field crops 26 percent. The Sacramento Valley recorded 17 percent of the state’s organic acreage, with three fourths of the region’s acreage planted to field crops and the rest mostly divided among fruit, nut, and vegetable crops. The Central Coast represented 13 percent of the total acreage . Eighty percent of that acreage was planted to vegetable crops. The South Coast had another 10 percent of the acreage of which almost three fourths was fruit crops. The North Coast and Cascade-Sierra each had 9 percent of the acreage. Half of the North Coast acreage was devoted to fruit crops while 91 percent of the acreage in the CascadeSierra was in field crops.The San Joaquin Valley was the leading region for fruit production with 32 percent of the acreage and 26 percent of sales. The South Coast followed closely with 30 percent of the acreage and 25 percent of the sales. The North Coast had 17 percent of the acreage and 16 percent of the sales. Two thirds of the nut acreage was in the San Joaquin Valley and Sacramento Valleys with 89 percent of the sales split between these two regions. The remaining nut production was split between the Central Coast and North Coast. Three fourths of the vegetable crop production took place in the Central Coast and San Joaquin Valley. These two regions accounted for 58 percent of sales. The Central Coast had 30 percent of the acreage and 37 percent of the sales while the San Joaquin Valley had 43 percent of the acreage but only 21 percent of sales. Field crops were grown primarily in the Sacramento Valley and San Joaquin Valley with two thirds of the acreage and three fourths of the sales. Livestock and poultry production took place primarily in the North Coast and San Joaquin Valley with 95 percent of the acreage and 97 percent of the sales.The number of registered organic farms in California increased by over 50 percent during the eleven-year period 1992-2002 from 1,273 to 1,949 growers . But the growth has not been even, with the largest growth in 1994, 1998, and 2000.The numbers actually declined from the previous year in 1993 and 2002. By far the largest absolute change in number of growers has been in fruit and nut crops, increasing by over 700 growers.The number of growers increased by a much smaller percentage than the number of farmed acres, suggesting that established growers increased crop acreage and/or that some new growers entered the program with above average farm size . This is consistent with the observation that almost 40 percent of the growth in acreage was in field crops which tend to have much higher acreage per farming unit than produce crops. Acreage also grew at a faster rate than gross sales.

This is again attributable to an increasing importance of field crops that have lower sales per acre than any of the other commodity groups.Comparing the organic sub-sector to the whole of California agriculture, gross sales of organically grown commodities tripled between 1992 and 2002 while overall agricultural sales in California increased by 30 percent over the same period. Growth in organic sales averaged 20 percent a year between 1993 and 1998 but slowed to an average of eight percent from 1998 to 2002. In the five year period 1998-2002, organic sales increased by 33 percent while state total sales were stagnant. Organic crop acreage increased four-fold between 1992 and 2002 despite a decrease in land in farms for the state over the same period. Organic agriculture nevertheless represented only 1 percent of total cash income for California by 2002. Organic produce was slightly more prominent, with 2 percent of vegetable sales and 1.4 percent of fruit and nut sales in 2002.From 1998-2002, vegetable crops posted a 48 percent increase in the number of acres but only a 22 percent increase in total sales , although this varied widely across regions. Over 90 percent of the increase in vegetable crop acreage took place in the Central Coast and the San Joaquin Valley. Vegetable crops with the greatest increase in sales include spinach, celery, endive, mushrooms, lettuces, and fresh market tomatoes. Salad mix sales actually decreased over the period. Commodities with the largest increase in acreage include salad mix, lettuces, spinach, carrots and mustard. The acreage data can be somewhat misleading in that the greatest increase came from fallow acreage and acreage in cover crops for rotation purposes.Considering all salad crops as lettuces the greatest increase in acreage attributed to a vegetable commodity came from lettuces expanding from 2,600 acres in 1998 to 6,500 acres in 2002. In fact, lettuces account for over one third of the increase in vegetable acreage. However, sales did not increase in proportion to the acreage, increasing by 23 percent due, primarily, to the decrease in sales from salad mix.

Farmers in the past often provided housing in order to attract and retain good workers

The cost of mandatory fringe benefits was $1.67 an hour or nine percent of total compensation, and employers provided voluntary fringe benefits worth $4.33 or 19 percent of total compensation, including $1.42 an hour for paid leave and $1.36 for health and other insurance.Fringe benefits can be expensive for farm workers with low earnings, since benefits such as health insurance for workers and their families that cover off-the-job injuries and illnesses require monthly payments that are independent of earnings. A low-cost $160 a month or $1 an hour health insurance premium for a full time worker adds 16 percent to the cost of a worker earning $6 an hour and 7 percent to the cost of a $14 an hour worker.However, poor farm worker housing led to higher standards and, since farmers are not required to provide housing, many responded to tougher housing rules by closing their housing. Farm workers were thus pushed into cities and towns in agricultural areas, where they competed with other tenants for housing, sometimes living in rented houses or sheds that were no better than the on-farm housing that was closed. However, the cost of living in cities was usually more than what farmers charged—often $50 to $100 a week—and workers living away from the fields must usually pay for rides to work, which adds another $20 to $25 a week to their costs of working. The government, which used to regulate farmer-provided housing, macetas de plastico 30 litros today primarily makes grants and loans to provide subsidized housing for farm workers, often families with children.

Alvardo and Luna found that 13 percent of SJV farm workers in 2001 lived in housing provided by their employers, and 50 percent lived with non-family members; they paid an average $238 a month in rent. Fewer than a third of the workers interviewed had a California drivers’ license, and 70 percent paid an average $5 a day for transportation from the city or town in which they lived to their farm job.The third key labor market function is retention—identifying and keeping the best workers, or encouraging the best seasonal workers to return next year. Most U.S. employers have formal evaluation systems under which supervisors evaluate each worker, and these evaluations are used to determine promotions and wage increases. Few farm employers have formal personnel systems. Instead, there are two methods of recruitment and worker evaluation that illustrate agricultural extremes in personnel practices. Some farmers, especially those who work closely with one or a few year round workers in dairies and similar operations, treat hired workers “as part of the family,” selecting workers carefully and providing them with housing near the farmer’s home . The other extreme is exemplified by a grower who hires a crew of workers through a contractor or a foreman, and never deals directly with workers. Crew-based hiring explains why recruitment and retention are often part of the same labor market function in agriculture. Indeed, an analogy to obtaining irrigation water may be helpful to understand the recruitment and retention options. There are two major ways to supply irrigation water to crops: a field can be “flooded” with water so that some trickles to each tree or vine, or fields can be irrigated with a drip system that involves laying plastic pipes down or under the rows and dripping water and nutrients to each tree or vine. If water is cheap, farmers flood fields with water; if water is expensive, farmers may invest in drip irrigation systems. The analogy to recruitment and retention is clear: farmers more often work collectively to flood the labor market with workers, usually by getting border gates opened or left ajar, instead of recruiting and retaining the best farm workers for their operation, the drip irrigation model.

The best way to ensure plenty of irrigation water is to invest in more dams and canals; the best way to flood the labor market is to invest in politicians willing to ease access to foreign workers.Farm workers were not granted federal collective bargaining rights in the 1935 National Labor Relations Act, and remain excluded from the NLRA. In 1975, California enacted the Agricultural Labor Relations Act to provide state-level organizing and bargaining rights: the purpose of the ALRA was to end a decade of strife in the fields, to “ensure peace in the agricultural fields by guaranteeing justice for all agricultural workers and stability in labor relations.” The ALRA includes three major elements: organizing and bargaining rights for farm workers, unfair labor practices that employers and unions can commit when they interfere with these worker rights, and a state agency, the Agricultural Labor Relations Board , to supervise elections in which farm workers decide if they want to be represented by unions and to remedy ULPs. Between 1975 and 1984, there were over 1000 elections on California farms, and unions were certified by the ALRB to represent workers on 70 percent of these farms . Since then, there have been fewer than 250 elections, and unions were certified on less than 50 percent of the farms on which they requested elections .Farm worker unions were often unable to negotiate first agreements with most of the farms on which they were certified to represent workers, and in many cases, were unable to re-negotiate first agreements. The number of collective bargaining agreements in California agriculture has never exceeded 300 at any time, and in 2002 was about 225—80 percent of the current contracts cover 3-4 workers under Christian Labor Association contracts with dairy and poultry farms. The United Farm Workers , Teamsters, and other unions representing field workers have fewer than 30 contracts covering less than 25,000 workers. Unions such as the UFW charge that farm employers are able to avoid reaching first or subsequent contracts by refusing to bargain toward agreement. In 2002, the UFW led an effort to amend the ALRA to provide for state intervention to ensure contracts on farms on which workers voted for union representation.

The UFW’s original goal was binding arbitration, under which a union and employer that cannot negotiate a contract typically go through a three-step procedure. First is mediation, when a neutral third party listens to each party separately and makes suggestions to narrow differences and allow them to reach a voluntary settlement. Second is fact finding, when a neutral party listens to both sides and proposes a non-binding settlement. Third is binding arbitration, when a neutral party proposes either any settlement deemed best or when the arbitrator is required to recommend one of the party’s final offers at the bargaining table. Binding arbitration is normally restricted to public employees such as police and firefighters who cannot strike lawfully. The California Legislature approved binding arbitration in agriculture, but Governor Gray Davis threatened to veto the bill, so a last-minute compromise, “mandatory mediation,” was approved. Mandatory mediation, which went into effect January 1, 2003, requires unions and farm employers to bargain for at least 180 days for a first contract. If they cannot reach agreement, a mediator tries to help the parties to resolve their differences for another 30 days but, if mediation fails to produce an agreement, the mediator must, within 21 days, recommend the terms of a collective bargaining agreement that the ALRB can then impose on the parties. Although mandatory mediation might result in a greater number of collective bargaining agreements, other factors suggest that the new law will not affect a large number of agricultural employers or employees while it is in effect through at least 2007.The hired farm workers of tomorrow are growing up today outside the U.S.,cultivo hidroponico usually in rural Mexico and Central America. A major federal policy issue is what conditions, including what housing provisions, U.S. farm employers should satisfy to get access to these foreign workers. The U.S. has a guest worker program for farm workers, known as the H-2A program. It requires DOL to certify a farmer’s need for H-2A guest workers. In order to obtain certification, a farmer must satisfy certain recruitment, wage, and housing regulations, including applying for certification and trying to recruit U.S. workers at least 45 days before they are needed, offering to pay the higher of the minimum, prevailing, or Adverse Effect Wage Rate, and offering to provide free and approved housing to out-of-area U.S. and H-2A workers.Except for sheep farmers, California farm employers have traditionally not obtained workers through the H-2A program; most admissions have been in eastern states such as North Carolina. But the number of H-2A admissions in these eastern states has been rising, and H-2A workers for non-shepherding jobs were approved in California in March 2002, when a Ventura county custom harvester/FLC brought 38 H-2A workers from Mexico to California to harvest lemons, possibly a precursor to more H-2A farm workers.

If the H-2A program expands, there would likely be an increased demand for barracks or dorm style housing, and inspectors to check it. Instead of expanding the H-2A program, three other concepts are being debated to regulate the access of farmers to foreign farm workers: temporary guest workers, legalization, and earned legalization. Temporary guest workers are non-immigrants, persons in the U.S. to work generally for one employer, who must leave when the work ends—guest workers, under U.S. law, do not generally obtain any preference for admission as immigrants. During the 1990s, the SAWs—unauthorized farm workers legalized in 1987- 88—and their replacement with newly arrived unauthorized workers increased the risk to farmers that they may be fined or lose their workers at critical harvest times. Farmers could avoid such risks by having DOL certify their need for H-2A workers, but certification required offering at least a DOL-set wage and free housing. Many California farmers want an alternative guest worker program that does not require certification, and they do not want to offer free housing to legal guest workers. In July 1998, the U.S. Senate approved one grower proposal, the Agricultural Job Opportunity Benefits and Security Act , which avoided the need for farmers to be certified by creating a registry in each state to enroll legally authorized farm workers. Under AgJOBS, farmers would apply to the registry, for example, requesting 100 workers. If only 60 registry workers were available, the farmer would be automatically “certified” to recruit and have admitted to the U.S. 40 foreign workers. AgJOBS would also end the housing requirement by allowing the governor to certify that there is “sufficient” farm worker housing in the area, and then the farmer could offer a housing allowance equivalent to “the statewide average fair market rental for existing housing for non-metropolitan counties for the State…based on a two bedroom dwelling unit and an assumption of two persons per bedroom,” about $500 a month in the northern Sacramento Valley and $800 a month in San Benito in 2000. However, most California agriculture is in metro counties, where 40th percentile fair market rents in 2000 are about $525 to $1,100 for two-bedroom units. Under AgJOBS, typical housing payments for guest workers would have been $125 to $150 per worker per month in California. President Clinton opposed AgJOBS, and issued a statement: “When these programs were tried in the past, many temporary guest workers stayed permanently and illegally in this country. Hundreds of thousands of immigrants now residing in the U.S. first came as temporary workers, and their presence became a magnet for other illegal immigration.” In 1999, after consultations with worker advocates, a new concept was added to AgJOBS: earned legalization. Legalizing unauthorized farm workers might encourage many of them to leave for non-farm jobs, as SAWs did in the 1990s, so farmers who wanted guest workers and worker advocates who wanted legalization agreed to a program that would grant unauthorized workers a temporary legal status.Under their compromise, unauthorized workers who could prove that they did 100 or 150 days of farm work in the preceding year would get a temporary legal status that permitted them to live and work in the U.S.In order to maintain this temporary legal status, and eventually apply to become a regular U.S. immigrant, the temporary worker would have to do a certain amount of farm work each year for several years, e.g., 80 or 100 days of farm work for three to five years. Thus, after several years and 240 or 500 days of farm work, the temporary legal worker could earn an immigrant status.

Canada insisted that dairy be largely outside that bilateral free trade regime

The United States maintains binding tariff-rate quotas with high in-quota tariffs for imports of most major dairy products. These trade barriers have insulated U.S. dairy product markets from world market forces, with domestic prices for major agricultural products typically significantly higher than world prices. California’s dairy industry, which produces nearly half of the nation’s non-fat dry milk and approximately 20 percent of its cheese, benefits from these border measures. As part of the Uruguay Round Agreement on Agriculture that took effect in 1995, the system of absolute quotas gave way to a system of tariff-rate quotas . However, the second-tier tariffs that limit over-quota imports are prohibitively high; therefore, the effects of the TRQs remain the same as the absolute quotas that were replaced. The Uruguay Round GATT agreement also provided for a gradual increase in the quantity of dairy product imports into the United States under the TRQs. This provision allowed for a gradual increase in import access into the U.S. dairy market until 2000. The North American Free Trade Agreement , which became effective in 1994, eliminated dairy trade barriers with Mexico, but Mexico is a high-cost milk producer and so no new imports have arrived.Imports of some products, notably casein and milk protein concentrates are outside the TRQ regime. The U.S. dairy industry has proposed imposing new trade barriers to limit imports of these products,30 litre pots but such proposed legislation is still pending and would require some accommodation with WTO trading partners. Current trade negotiations, initiated with the Doha Round, might increase that import access further.

Even under the proposal urged by the United States substantial increases in imports would be likely. However, a multilateral deal would also allow more imports into Europe and protected Asian markets and reduce export subsidies from Europe, so world prices would be likely to rise substantially. Dairy trade is a significant issue in the proposed free trade agreement with Australia. Australia is a major non-subsidized dairy product exporter and opening the border with Australia would likely place downward pressure on U.S. and California milk prices, especially through the impact on the price of products that contain milk fat. California shares in the impacts of the import barriers. As noted in Table 2, by raising the domestic price of milk above the world price, the import barriers alone contribute more than 1.15 billion to the dairy PSE in California . Subsidized exports, along with donations to domestic food programs and international food aid, have long been used to dispose of stocks of dairy products acquired under the federal price support program. Subsidized exports have been considered a market for U.S. dairy products that does not disrupt domestic commercial sales. In addition to the disposal of government stocks, the Dairy Export Incentive Program has provided explicit price subsidies for commercial dairy product exports since 1989. The DEIP has been scaled back over the 1995-2000 period as part of the Uruguay Round Agreement. The average 1999-2001 dairy export subsidy had a relatively small impact on the dairy industry with a value of $20 million. The 2002 Farm Act also extended DEIP through FY 2007. DEIP payments in 2002 were higher at about $28 million, of which, under the Uruguay Round WTO agreement most went to exports of NFDM. Federal milk marketing orders in the United States are regional in their implementation. California is the only significant dairy state that is not a part of the federal system of milk marketing orders. Both the California and federal milk marketing orders establish specific minimum prices that must be paid for raw milk according to the class of its end use .

Marketing orders also establish pool pricing for farms such that individual farmers receive weighted average prices of milk sold in the marketing order. Federal milk marketing orders calculate a single, separate pool price for all milk under each of the regional orders . The FAIR Act of 1996 required the USDA to consolidate current federal orders from about 33 to between 10 and 14 within three years. Today, there are 11 federal marketing orders for milk. The California milk marketing order operates with five classes of milk designated by end use. These classes provide separate prices for milk sold for fluid use and for manufactured products such as yogurt, ice cream, cheese, butter or NFDM. The California milk marketing order provides for price discrimination, with different minimum prices set by the state for fluid products with relatively inelastic demands. The California marketing order provides for two producer “pool” prices. Individual farmers in California receive a weighted average of the two prices, with these weights determined by individual ownership of milk quota . The California milk quota program provided that owners of milk quota received benefits from this program by receiving a bonus for quota milk equal to the differences between the average of the high price uses and the average of the low price uses. This difference averaged approximately $1.70 per hundredweight. The total annual flow return to quota ownership has been about $154 million per year. This figure is taken as an estimate of the value of the marketing order in the PSE calculation. The underlying assumption is that the flow benefits to quota owners has represented the approximate flow to the dairy industry from price discrimination that nets out the transfer from those who own less quota to those who own more than the average quota amount. The FSRI Act of 2002 introduced a new direct payment for dairy, the Milk Income Loss Contract . This payment was designed to limit the total payment to individual producers, thus favoring smaller producers.

Research has shown that supply responses to the payments resulted in lower milk prices and that for most California producers, as well as large producers throughout the country, reduced milk revenues due to lower milk prices have outweighed the MILC payment . The direct payments from the MILC payment to California dairy producers totaled approximately $75 million in 2002.Aside from dairy, import barriers also apply for the sugar sector in California. The trade restrictions for sugar have resulted in a U.S. domestic sugar price twice that of sugar traded on world markets. The proliferation of high fructose corn syrup as a sweetener is a by-product of the relatively high prices of sugar in the United States. The sugar import barrier provides California sugar beet producers with over 80 percent of total support. Other trade barriers for California commodities have relatively small effects. A potential exception relates to selected phytosanitary or food safety and sanitary regulations . Most countries restrict imports of commodities that may transmit diseases, pests, or parasites, in order to keep the infection from developing domestically. For example, beef products from countries that have herds with endemic Foot and Mouth Disease infections are generally banned from import into countries free of the disease. These kinds of regulations can be considered protectionist trade barriers when they are not based upon sound scientific principles. The United States has challenged a number of barriers of other countries, and a few U.S. barriers have likewise been challenged on these grounds. For example, the phytosanitary regulations blocking avocado imports from Mexico to the United States were challenged, and the barrier was slightly relaxed in 1993 and again in 1997 and 2002 . Following the practice of OECD and USDA, we have not attempted to judge which technical restrictions are protectionist. Therefore, trade restrictions based on technical considerations have not been included in calculating the Producer Support Estimates. In the 1980s and early 1990s, explicit export subsidy programs were important for selected grains and oil seed products. For wheat and a few other commodities,40l plant pot the United States has operated the Export Enhancement Program since 1985. The Uruguay Round Agreement on Agriculture implied no significant commitments for domestic subsidies in the United States, but it did impose limits on direct export price subsidies . Limits were placed on subsidy outlays and quantities subsidized by commodity. The EEP was continued in the FAIR Act. The FSRI Act of 2002 extended the annual funding through 2007 at the current funding level of $478 million per year. Budget projections suggest that these authorizations will not be used. Export credit guarantees, food aid and export promotion programs were not explicitly included among the export subsidy programs facing restrictions in the WTO. However, some of these programs are being challenged in WTO disputes. In this chapter, we have included foreign market development and credit programs as part of export assistance. The Market Promotion Program , renamed to Market Access Program in the FAIR Act, and the Foreign Market Development programs are market development programs that provide funds for advertising and product promotion in overseas markets.

Under these programs, non-profit trade organizations, state and regional trade groups, private companies and agricultural cooperatives use government money to develop markets mostly for high-value and processed products. The FSRI Act of 2002 increased MAP funding from $90 million to $100 million in 2002 and then to $200 million in 2007. The FSRI Act of 2002 authorized the use of CCC funds to support the FMD program and increased funding to $34 million per year.Until the FAIR Act of 1996, the deficiency payment program was the key government price and income support program for cotton, rice, wheat and feed grains . The FAIR Act eliminated deficiency payment programs and authority for acreage reduction programs. The price support and marketing loan programs were retained and under the direct payments base land may be used for almost any agricultural activity, including fallow, except fruit and vegetable production . Under the FAIR Act, participants were to receive a predetermined payment each year for seven years, based on a declining percentage of past deficiency payments. These payments were to be independent of market prices and allow a large range of “agricultural” uses for program base land . However, agricultural prices fell considerably and remained depressed in the late 1990s through 2001. At the same time federal budget deficits became surpluses and Congress responded with annual ad hoc legislation payments that raised direct payments by 50 percent in 1998 and doubled payments for 1999 through 2001. In addition, the continuing marketing loan programs triggered billions of additional payments. According to the USDA , subsidies jumped from about $4.6 billion in fiscal year 1996 to $19.2 billion in fiscal year 1999 and $32.3 billion in fiscal year 2000. By 2002, subsidies had fallen to $15.6 billion, because market prices had risen. The 2002 FSRI Act reauthorized the marketing loan program at slightly adjusted loan rates. Marketing loan programs are also made available for peanuts, wool, mohair,honey, small chickpeas, lentils, and dry peas. The 2002 Act further replaced the production flexibility contract payments of the FAIR Act with direct payments that are roughly equal to the payments that applied in 2001. These payments are not tied directly to current production of any crop, but are based on historical payments of a specific program crop and continue to forbid planting of wild rice, fruits, tree nuts or vegetables on base land. In addition, farmers were allowed to update the base areas used to determine payments. The third main payment program in the FSRI Act, the counter-cyclical program was designed to replace the ad hoc MLA payments that were made from 1998 to 2001. In 2003 payments under the new CCP program were lower than the magnitude of MLA payments in 2001.The Conservation Reserve Program , and related long-term land idling schemes that focus on water quality and wetlands, cost the U.S. taxpayers about $2 billion per year and idle about 37 million acres in total. Land idled by the CRP has significant effects on grain supply and price. In the spring of 1997, the U.S. Secretary of Agriculture accepted bids for land to enter a smaller reformed CRP for the next 10 years. Of the national total, fewer than 200,000 acres were in California. Due to the relatively small use of CRP in California, and the requirement of the land idling offset the value of the payments received, CRP contracts were not included in our PSE calculations. Under the 2002 FSRI Act, the CRP along with other major conservation programs was reauthorized and extended. The CRP ceiling increased from 36.4 million acres to 39.2 million acres, so that additional land will be removed from crop production for 10-year periods.

Additional litigation is working its way through the court system

The periodic renewal votes conducted for most programs reveal their popularity, with positive votes typically above 90 percent. A number of marketing programs have, however, encountered problems. As a group, the programs using quantity controls to practice price discrimination have lost governmental and legislative support, due to perceived adverse impacts on U.S. consumers. The programs with the strongest potential for increasing producer prices, including hops, lemons, Navel oranges, and Valencia oranges, have been terminated by the Secretary of Agriculture. Those orders with quantity controls nowadays use them infrequently.Informed observers agree that it will be very difficult to gain approval for a new marketing order with strong quantity controls. Programs compelling producer and handler support of commodity advertising programs have faced withering legal challenges in recent years based upon the argument that they represent an undue restriction on commercial free speech under the First Amendment to the U.S. Constitution. Two recent rulings on the issue by the U.S. Supreme Court have done little to clarify matters.If the courts find ultimately that producers and handlers cannot be compelled to support an industry’s advertising program, it will likely fail due to free-rider problems. If the courts decide in favor of mandatory support, current programs will continue and new programs may emerge. There will, however, be increased monitoring of program costs and benefits to assure program supporters that their funds are being well-spent. Research funding pressures may require commodity groups to increase their support for research programs, if they want research to be done. The mandated programs provide a proven means for commodity-based research support,blueberry grow pot and they may take on an increased research role, as has been done by the California strawberry industry.

California agricultural producers rely on foreign markets for a significant portion of their revenues and export relatively more than producers in other states do. The value of California agricultural exports totaled about $6.5 billion in 2002, or about 20 percent of the value of agricultural commodities produced in California.While it is not surprising that California’s export earnings exceed those of every other state since its farm cash receipts are the highest in the country, exports are relatively more important to California than to other states. While California accounts for 12 percent of national farm cash receipts , it accounts for an estimated 15 percent of total U.S. agricultural export revenue. To put these figures in an international context, the state of California exports more agricultural products than some leading agricultural countries do, including such countries as Chile and China. The annual value of Mexico’s agricultural exports is only slightly larger than California’s estimated value . California exports a wide variety of high-value specialty crops. As shown in table 1, the top six food product exports from California in 2002 were almonds, cotton, wine, table grapes, dairy, and oranges. The state is not a significant producer or exporter of grain crops such as corn, wheat, or soybeans. In fact, the state is a net importer of feed grains. Figure 1 highlights the diversity of California’s exports. The top five products account for just over one-third of California’s agricultural exports by value. Even when exports are aggregated into commodity groups, as opposed to individual products, the range of products exported by California is striking . According to UC Agricultural Issues Center statistics, fruit exports comprise 25 percent of the state’s agricultural exports, followed by field crops , tree nuts , vegetables , animal products and wine . This diversity of exports reflects California’s production diversity and differentiates the state from other important agricultural states in the U.S., which tend to produce only a few commodities. For instance, the agricultural sector in Iowa and Illinois is concentrated in just three commodities: corn, soybeans and hogs, which account for 70-80 percent of those states’ farm cash receipts.

Nebraska’s production of corn and cattle generates over 70 percent of that state’s farm receipts. Texas depends on the cattle sector, which produces 50 percent of its farm cash receipts . Of any other state in the U.S., the profile of Florida’s agriculture is perhaps most similar to California’s. While the value of agricultural production in Florida is about 25 percent of that in California, Florida’s agriculture is quite diversified and the state produces fruits, vegetables, and dairy products. However, Florida is not as dependent on foreign markets as California is; many of the state’s fruits and vegetables are sold domestically. Not surprisingly, this means that Florida’s growers tend to be more protectionist than growers in California. As we explain a little later, California growers have a great deal to gain from breaking down foreign barriers to trade in fruits and vegetables; this is less true for Florida growers. California’s exports are destined for a diverse group of relatively high income countries, with the exception of the increasingly important Chinese market. The major foreign markets for almonds and wine are in Europe, while significant markets for the other top commodities are in Canada, Mexico, and Asia. Penetration of these desirable markets is all the more impressive because these countries remain quite protectionist with respect to agriculture, as discussed in the next section. It is estimated that about 40 percent of California agricultural exports is destined for Asia, 20 percent to Europe, and 30 percent to North America. California exports nearly twice as much of its agricultural output to the relatively wealthy European Union markets compared to the U.S. as a whole .California agriculture faces a complex international trading environment, characterized by import tariffs, non-tariff trade barriers, new competitors, and relatively little traditional federal assistance compared to other states. In this section, we review the market environment in which California’s agricultural producers compete. Increasing foreign competition and relatively closed markets have created demand within California for both increased government support for agriculture , and further trade liberalization in foreign markets .

The internal contradictions between these positions have not been resolved. We argue later that California receives little benefit from the taxpayer dollars spent on foreign marketing; consequently, the California agricultural industry may wish to concentrate on achieving global trade liberalization even if this necessitates funding reductions for foreign marketing activities. In the last decade, the nominal value of total U.S. agricultural exports grew by about 30 percent. Exports of some commodities important to California grew more rapidly and some less rapidly than the national average. Over this time period, U.S. dairy exports increased by 265 percent and fresh vegetable exports increased by 73 percent. Figure 3 shows how the nominal values of some major California exports changed over the period 1995-2002. According to UC AIC and the Foreign Agricultural Service ,hydroponic bucket the fortunes of California’s commodities have been mixed; almonds and wine have fared somewhat better than tomatoes and raisins. While the total nominal value of California’s agricultural exports has declined by about 5 percent since 1995, this figure masks widely divergent trends across commodities, so no general conclusions can be drawn.In the 1990s the most significant import growth in world markets was in high valued and processed food products like those grown in California. The share of high value and processed agricultural products in world agricultural trade has increased from less than 40 percent in the early 1980s to well over 50 percent by the end of the 1990s . At the same time, the share of fruits and vegetables in world agricultural trade remained at about 17 percent from 1990 to 2001, with a dollar value of $69.8 billion in 2001, up from $51 billion in 1990 . The fact that fruit and vegetable trade did not increase any faster than total agricultural trade is very surprising given the growing per capita demand in developed countries for fresh fruits and vegetables. The stagnant share of fruit and vegetable trade no doubt reflects the high level of protectionism around the world for these food categories. For instance, two-tiered tariffs known as tariff-rate quotas are commonly used to restrict imports of fruits and vegetables. Worldwide, there are more than 350 TRQs placed on trade in fruits and vegetables, and more than 25 percent of all agricultural TRQs are concentrated in the fruit and vegetable trade . This phenomenon critically affects California agriculture. As an exporter of high-value food commodities, California must contend with the fact that import tariffs in important markets such as in the EU are generally higher on processed agricultural products than on the primary commodities. This tariff wedge between a processed commodity and its corresponding primary commodity is referred to as tariff escalation, and this is a significant obstacle to California exports. Tariff escalation produces a trade bias against processed agricultural products and value added products. There is general evidence of tariff escalation in OECD countries , especially for fruits, vegetables, and nuts—major California exports. For many countries, bound tariffs tend to be higher for processed food products than for unprocessed products . Furthermore, recent tariff reductions on agricultural products exceeded tarrif reductions on processed food products in Australia, Canada, the European Union and Mexico . Government transfers to the agricultural industry have contributed to the sector’s profitability in California, particularly for those farmers not growing nuts, fruits and vegetables.

Agricultural producers in California received $586 million in federal assistance in 2001; Of this about $242 million came as production flexibility contracts and loan deficiency payments. Supplemental funding of $258 million was paid directly to California farmers. The remainder of government payments to farmers came in the form of marketing support and conservation payments, which we discuss later in this chapter. While these federal government support payments are low in total compared to those states where the major agricultural products are grains or oil seeds, this does not imply that some agricultural producers in California do not benefit greatly from subsidies and protectionist measures.2 Over 100 farms in California received more than $425,000 each in subsidies in 2001 . Dairy, sugar and cattle producers receive significant protection from import barriers, and many producers receive subsidized inputs, particularly irrigation water. Sumner and Hart estimated the Producer Subsidy Equivalent paid to California agriculture in 1995 , where the PSE is defined as all government transfers to the industry including but not limited to production subsidies. They calculate that the California agricultural sector receives annual PSE transfers of $2.3 billion per year or about 11 percent of total commodity receipts. This is about one-half of the percentage PSE for all U.S. agriculture at the time, mainly because fruits and vegetables receive fewer transfers than the average commodity. However, California’s PSE is higher than the percentage PSE received by producers in liberalized markets like Australia and New Zealand where the 1995 PSE was about 3 percent. While the specific estimates of PSE vary over time, the general pattern identified by Sumner and Hart, that California producers have a lower PSE than the U.S. national average but higher than that for other agricultural exporters, holds today.The formation of the Canada-United States Free Trade Agreement in 1989 and the North American Free Trade Agreement in 1994, has led to greatly expanded agricultural trade between Canada, California’s top market, and the U.S. NAFTA was designed to integrate economic activity among three nations: Canada, the U.S. and Mexico. It serves as a free trade agreement rather than a customs union or common market. Since 1989, U.S. agricultural exports to Canada have expanded by about 3 and one-half times, from $2.24 billion to $7.65 billion. Over the same period, agricultural imports from Canada have risen almost three-fold, from $2.93 billion to $8.66 billion. Fruits and vegetables account for more than one-third of Canada’s agricultural imports from the U.S., so California plays an important role in this north south trade. However, in spite of the CUSTA and NAFTA, Canada continues to intervene in agricultural trade flows. The country uses non-tariff barriers such as licenses that restrict imports of bulk produce, fresh fruits, vegetables, and wine. For instance, Canadian regulations on fresh fruit and vegetable imports prohibit consignment sales of fresh fruit and vegetables without a prearranged buyer . Canada also severely limits imports of dairy products, eggs, and poultry. According to the WTO Appellate Body, Canada’s supply management system for dairy provides implicit export subsidies for these products . Producer groups in the U.S. have called for the greater use of non-tariff barriers to limit agricultural imports from Canada. This has often been accomplished by the use of U.S. trade remedy laws.

Crop water use is measured as evapotranspiration of applied water

California uses a combination of federal, state, and local water projects to capture, store, transport, and import surface water to meet demand around the state. The largest water projects are the federal Central Valley Project and the State Water Project.The amount of water per acre used by urban areas varies according to land use, population density and water use efficiency. In some areas agriculture may use less water per acre than nearby urban development while in other areas the opposite case may be true. Groundwater provides 30 percent of the supply used by agriculture and the urban sector in a normal non-drought year. Agriculture accounts for over 90 percent of the groundwater used in the San Joaquin, Tulare Lake, and Central Coast hydrologic regions. Only a portion of the applied water is actually used by the crop. The remainder percolates through the soil, flows downstream to other uses, or is irrecoverably lost due to other factors.The ratio of ETAW to applied water is an indication of irrigation efficiency. The amount of water applied to a particular crop depends on many factors including plant evapotranspiration, soil properties, irrigation efficiency, and weather. Plant intake is the primary purpose of water application, but water is also applied to crops for cultural purposes such as frost control, facilitating cultivation and leaching of salts out of the crop root zone. There is a wide range in water application rates among crops and hydrologic regions. For example, depending on the hydrologic region, anywhere between 2 and 10-acre-feet/acre are applied to alfalfa annually. Hay production,nft growing system including alfalfa, accounts for almost 15 percent of total irrigation water used in agriculture. Cotton accounts for about 12.5 percent.

The top 12 commodities, those that represent 60 percent of the total value of California agriculture, account for about 48 percent of the water used for irrigation in the state. Agricultural surface water costs differ greatly by hydrologic region and source of supply. According to the Department of Water Resources, the 2003 Central Valley Project contract rates range from $2 per acre-foot in the Sacramento Valley to $27 in the county of Tulare and almost $30 in some areas of the Delta. Almost one-third of California’s irrigated acreage used sprinkler, drip or trickle systems in 1998. The rest used gravity flow systems such as furrows. More than one method was used on some acreage.Technological innovation, fueled by research and entrepreneurship, has been a driving force in U.S. agriculture during the past century, leading to both higher yields and lower prices. In California, technological change has facilitated significant yield increases for many crops as well as other changes. Inputs have been used more efficiently to produce greater quantities of output. For instance, cash receipts per irrigated acre increased by 35 percent between 1960 and 1995. This can be attributed partially to the development and implementation of more efficient irrigation, such as drip systems, and partially to a change in the type of crops produced. The most recent analysis available finds that the productivity index for California agriculture doubled between 1949 and 1991. During the 1990s, particularly toward the end of the decade, computers were increasingly incorporated into farming operations. In only two years, between 1997and 1999, the number of California farms with Internet access doubled to 46 percent, and reached 51 percent in 2001. Overall, about 36 percent of California farms reported using computers in their business operations in 2001, compared to 29 percent for the United States as a whole, although there are several states with higher usage than California.In 2001, U.S. agricultural experiment stations collectively spent $2.3 billion on scientists’ agricultural research. The University of California Division of Agriculture and Natural Resources accounted for about 10 percent of those resources.

The DANR includes scientists with the UC Berkeley College of Natural Resources, the UC Davis College of Agricultural and Environmental Sciences, the Division of Biological Sciences, and the School of Veterinary Medicine; and the UC Riverside College of Natural and Agricultural Sciences. The DANR’s two major organizational units are the Agricultural Experimental Station and the Cooperative Extension . The AES is basically a multi-campus research organization, with a staff of near 700 academics distributed in more than 50 different departments. The CE constitutes the main outreach program, with about 400 specialists and advisors dispersed throughout the state. During the 1990s DANR aggregate funding stayed approximately constant at an average of $235 million per year. From 1999 to 2002, total funding increased in constant terms by 25 percent. The three campuses ,accounted for 72 percent of the 2002 annual DANR expenditures, while regionally based units accounted for 14 percent of the budget, and statewide academic programs and their support 12 percent. In 2002, about 80 percent of total funding came from government sources ; 13 percent came from private gifts, grants and contracts, and 7 percent from other sources, such as county government, endowments, sales, services, etc.Agriculture creates significant ripple effects throughout California’s economy. Each dollar earned within agriculture fuels a more vigorous economy by stimulating additional activity in the form of jobs, income and output. In general, the greater the interdependence in the economy, the greater the additional activity, or multiplier effects. These multipliers may be applied to the county, state and regional levels using the IMPLAN4 model. Multiplier effects can be represented by four measures that reflect the impact that agriculture has on the state. The first measure, sales impact, records how agricultural purchases influence total private sector sales. A second measure is the amount of personal income produced directly and indirectly by the economic output of agriculture and agricultural processing. The third measure calculates the total value-added linked to agriculture. “Value added” in this case is equal to the value of goods and services sold by a firm or sector of the economy, minus the cost of inputs and services used to produce those goods. A final measure is the number of jobs in agriculture, agricultural processing and other sectors of the economy related to agriculture in the state.

These multiplier effects may be demonstrated by tracing the activity of an individual farm. A farm’s sales impact would include all the inputs used on that farm, such as machinery, fertilizer, electricity—anything farm dollars buy. The personal income from the farm would include the farm’s income and a portion of the income of those from whom the farm purchased inputs. The farm’s value added would be equal to the cash receipts from sales of farm products less the costs of inputs that went into producing those goods. The jobs related to the farm’s efforts would include labor on that farm as well as in input and output industries that rely on business from that farm. For example, agricultural machinery manufacturers, chemical manufacturers, processors, and people working in retail food trade have jobs that are related to agriculture. The economic impacts shown in Table 22 can be interpreted as an indication of how the state would be affected if agricultural production and processing were to cease, and the associated inputs were not reemployed in any other economic use. Multiplier effects differ by commodity since some commodities may be related to more input and processing industries than others. For example, dairy production is related to a relatively extensive processing sector,vertical hydroponic nft system for which a wide range of inputs and specialized machinery has been developed. Hence, the dairy industry may have a greater effect on the economy in terms of multiplier effects than some other commodities. Multiplier effects may differ by region due to geographic dispersion of industries related to agriculture, aggregate size of agriculture and type of commodities produced in that region. Some industries have more local impacts, while others have impacts that are spread farther afield. For example, county or multi-county multiplier effects do not include input and processing industries located outside of that region, even if those industries are located elsewhere in the state. Similarly, state multiplier effects do not include input and processing industries located outside of the state. Thus, multiplier effects for commodity groups with geographically diffuse input and processing sectors may be underestimated. Through multiplier effects, agricultural production and processing account for about 6 percent or 7 percent of the state’s total income, value-added, and jobs. Fruits,tree-nuts, and vegetables represent about half of these totals, while dairy and poultry products, and grains are also major contributors.

Marketing California’s agricultural production presents unique opportunities and challenges. Because of its climatic advantages, California is able to produce a great variety of products that are not grown extensively elsewhere in the United States. The California Department of Food and Agriculture estimates that the state is the leading U.S. producer for about 65 crop and livestock commodities. Fifty-five percent of the value of California agriculture’s $26.1 billion in 2002 farm gate sales is contributed by the fruit , vegetable , and nut industries. Indeed, California dominates the U.S. horticultural sector, accounting for approximately 37, 55 and 85 percent, respectively, of the 2002 farm gate value of the principal vegetables, fruit, and tree nuts produced in the United States . California’s leading position in the $30.8 billion U.S. horticultural industry is explained by climatic, technological, and infrastructure advantages, as well as the market- and consumer-driven orientation of its agribusiness managers. Given the importance of horticultural crops to California agriculture, and to the nation, our discussion draws heavily on examples from this sector.Many of California’s fruits and vegetables are highly perishable, and production is seasonal. A major challenge in marketing is to ensure both the high quality of these products and their availability to consumers year-round. Another key challenge facing marketers is the maturity of the U.S. market. Both the U.S. population growth rate and the income elasticity of demand for food are low, meaning that the market for domestic food consumption expands only slowly over time, and firms are essentially competing for share of stomach. This competition has intensified given the high rate of new product introductions and expanded year-round availability of formerly seasonal items, often through imports. Both of these factors have led to a greater array of substitute products, frequently dampening demand for large-volume staples like oranges and apples. California’s bounty also presents opportunities. Through the diversity of its agricultural production, firms marketing California produce have the opportunity to provide food retailers with complete lines of fruits, vegetables, and nuts. Because California produces a large share of the U.S. supply of key commodities such as almonds, lemons, olives, lettuce, prunes, strawberries, table grapes, processing tomatoes, and walnuts, California producers and marketers traditionally had unique opportunities to exercise control over the markets for those commodities. However, expanding world supply of many commodities has reduced California’s share, increasing competition and presenting new marketing challenges. This chapter documents the importance of marketing in both U.S. and California agriculture and highlights the institutions that have emerged and the strategies that have been pursued by California’s food marketing sector to compete effectively in this market environment.The U.S. food industry is the largest in the world. The final value of food sold through all retail channels was $485.2 billion in 2002 with an additional $415 billion sold through foodservice channels . Marketing functions account for the largest share of the U.S. food dollar, and the percentage of food costs due to marketing is rising over time. Food marketing thus has an important effect on the welfare of both consumers and farmers. The U.S. Department of Agriculture maintains two general measures of relative food costs. The market basket consists of the average quantities of food that mainly originate on U.S. farms and are purchased for consumption at home. The farm share of the value of the market basket remained stable at about 40 percent from 1960- 80 but has declined rapidly since then, to 30 percent in 1990 and 21 percent in 2001. Table 1 depicts the trend in farm share for selected commodities of importance to California. Although farm value has traditionally accounted for more than 50 percent of retail value for animal products such as meat, dairy, poultry, and eggs, those shares have now fallen well below half.

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