Giannini Foundation of Agricultural Economics

1. Water Pricing for a Dry Future: Pricing Policies from Abroad and Their Relevance to California

It is raining again in California. How long will it last and how effective will it be in addressing the long-term water scarcity that the state faces? We live in a water-scarce, drought-prone state and this fact has to be taken into account in shaping water conservation policy. At a recent water-pricing workshop, co-sponsored by the Giannini Foundation, leading scholars from several countries presented case studies. These illustrated how water-pricing mechanisms have been used creatively throughout the world for promotion of water conservation under water-scarce situations.

2. Growers’ Assessments of Challenges Facing the California Rice Industry: Past and Present

Rice growers in California face many  challenges in 2016. In this piece, we consider current challenges cited by growers and their relationship to past challenges in the industry.

3. California Agriculture: Water, Labor, and Immigration

Farmers fear shortages of water and labor. Both have been in short supply in recent years due to drought and reduced Mexico–U.S. migration. California agriculture may be at a crossroads on both issues, facing higher costs and more uncertainty about the availability of two critical inputs.

1. Vinum Verum Viribus? Systematic Errors in Wine Alcohol Labels

Using international data for 18 vintages, we find systematic differences between the actual and stated alcohol content of wine. Our results suggest that rising alcohol content of wine may be a nuisance by-product of producer responses to evolving market and production environments.

2. Honey Bee Colony Strength in the California Almond Pollination Market

Honey bee colony strength is an important factor in almond pollination decisions due to increased pollination efficiency of larger colonies. Growers use contract provisions to secure a minimum level of colony strength, thus making strength an influential component of the overall colony supply and demand which has not been considered in previous economic analyses.

3. Taxing Bottled Water as an Environmental Policy

Litter from plastic water bottles is an environmental concern for cities and states throughout the country. One potential policy response to this issue is to implement a consumer tax on bottled water in hopes that the subsequent reduction in total sales translates into less litter. We explore evidence from Washington state to analyze how effective and efficient a consumer tax on bottled water is as an environmental policy.

1. Biofuel Policies: Robbing Peter to Pay Paul

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

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

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

3. Europe's Migration Crisis

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

1. Beer: A Poster Child of the Bioeconomy

The bioeconomy includes agricultural sectors that rely on farm inputs and biological processes to produce a wide array of products. The traditional bioeconomy relied on fermentation to produce cheese, beer, etc., while the modern bioeconomy relies on biotechnology. The history of beer used as a case study suggests that over time, the bioeconomy evolved to produce differentiated products with elaborate supply chains. Its evolution depended on investments in research and a balanced regulatory environment.

2. Investment Warning: Farming May Endanger Your Financial Health

During the last 15 years, some two-thirds of individual taxpayers with farm income have reported total net farm losses averaging over $11.1 billion annually. In addition, the U.S. Government participates in funding these losses by foregoing taxes on other sources of income from which farm losses are deducted. Persistent losses indicate that farming may have changed from an investment to a consumption good for many individual taxpayers.

3. Obesity in Mexican-Origin Children

Research results from the Ninos Sanos, Familia Sana project found that mothers have a dominant role in the weight of their children. Obese children are more prone to gain more weight, at the margin, if their mothersare overweight. Other factors are also important in explaining obesity in Mexican-origin children.

1. What Does the Trans-Pacific Partnership Agreement Mean for California Agriculture?

If it were implemented, the Trans-Pacific Partnership agreement would lower import barriers and facilitate export for many of California's significant agricultural exports to Pacific Rim nations—most importantly in Japan. By modestly improving growth prospects, it would also help create larger markets in developing countries—most importantly Vietnam.

2. Whither U.S. Immigration?

The United States is the nation of immigration, with 20% of the world's international migrants and half of the world's unauthorized migrants. Debates over the best package of enforcement, legalization, and guest workers to deal with illegal migration continue to divide Americans and Congress.

3. National Standards for GM-Free Food Labels: A Good Idea

The USDA and U.S. Congress are working to introduce a national certification program for GM-free food labels. It would function similarly to the existing National Organic Program. Consumers would gain from these regulations if they are introduced.

1. The Supreme Court's Decision in the ‘Raisin Case': What Does it Mean for Mandatory Marketing Programs?

In Horne et al. v. Department of Agriculture, the U.S. Supreme Court ruled that the Raisin Marketing Order's volume-control program constituted an illegal taking of private property. We discuss the rationale for theprogram, the Court's opinion, and what this decision means for volume controls enacted under marketing order provisions, as well as the other functions that marketing orders commonly perform.

2. California Farm Labor: Jobs and Workers

The combination of labor-intensive crops, tighter border controls, and new programs that may give some unauthorized foreigners a temporary legal status has increased interest in the number of farm workers and theirstability. During the 1990s, there were an average three unique farm workers or Social Security Numbers reported by California farm employers for each year-round equivalent farm job. Analysis of data for 2007 and 2012 find two workers per job, a significant increase in stability. The ratio of workers to jobs may fall further as farmers mechanize, offer higher wages and benefits to retain current workers, or turn to guest workers.

3. The Evolving Legal Organization of California Farms: Corporations and LLCs

California corporate farms continue to grow in terms of numbers, share of all farms, acreage, and product sales. The average California corporate farm is larger than the average single proprietor and partnership farm, but all three organizational forms are represented in each of the size, asset and product sales categories from smallest to largest. Many California farms now realize some corporate advantages through organization as a Limited Liability Company. 

1.Putting California's Latest Drought in Context.

California's latest drought has focused attention on water management practices and policies. This article describes how the system has adapted to managing water scarcity and recurring droughts. It identifies some of the early lessons learned, including promising ways to adapt to water scarcity and areas of continued vulnerability.

2. Agricultural Irrigation in This Drought: Where Is the Water and Where Is It Going?

In the midst of its fourth year of drought, California now faces an estimated reduction in surface-water availability of 8.8 million acre-feet (maf) out of 29 maf in agricultural applied water statewide. However, groundwater, the buffer water supply during drought, is replacing about 6.2 maf of surface water via additional pumping. This increased groundwater pumping is in addition to the 1.5 maf of annual average groundwater overdraft in the Central Valley. The net reduction of 2.6 maf in the total supply in 2015 may result in about 564,000 acres fallowed statewide, or about 120,000 more acres than last year's fallowing estimates.

3. Economic Impact of the 2015 Drought on Farm Revenue and Employment

We estimate that a net water shortage of 2.6 million-acre feet could cause 564,000 acres to be fallowed and result in a loss of $850 million in crop production value. The surface water shortage of 8.8 million acre-feet will be replaced by about 6.2 million acre-feet of increased groundwater pumping, at a cost of about $600 million. We estimate the dairy and cattle industries will lose $350 million in revenues. We estimate the direct economic cost of the 2015 drought will be $1.8 billion, with a loss of 8,550 direct farm jobs. Including spillover effects, statewide losses are close to $2.7 billion in output and 18,600 full-time and part-time jobs.

4. California's Severe Drought Has Only Marginal Impacts on Food Prices

Flexibility and resourcefulness by California farmers have minimized drought-induced supply reductions for tree, vine and vegetable crops, for which California has large market shares and for which retail prices would be sensitive to California disruptions. Water is being shifted away from field crops that enter the food supply indirectly and for which California is not a dominant producer. These facts mean that even a severe drought is having only slight impacts on supplies to consumers and thus only slight impacts on consumer food prices. Of course, the longer the drought lasts, the larger the impacts.

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

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

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

1. Per Capita Income, International Trade Puzzles, and CO2 Emissions.

2.Adoption of Water-Related Technology and Management Practices by the California Avocado Industry.

3.Does Management Matter? Evidence From India.

4. Faculty Profile: Thibault Fally

1. Biofuels Policy in Limbo.

2. Contribution of University of California Cooperative Extension to Drip Irrigation.

3.Farm Labor and Immigration: Outlook for 2015.