The Economic Effects of Pierce’s Disease in

California: Preliminary Indications.

By

Karen M. Jetter, UC Agricultural Issues Center

Joseph Morse, UCR Dept. of Entomology

Presented at the Pierce’s Disease Symposium

San Diego, CA

December 15, 2008

Initial Economic Effects

When the association between the GWSS and PD was made, PD had been found with increasing frequency and little was known about effective control of GWSS.

Losses to grape growers were mainly from the removal of infested vines.

Initial Economic Effects

In the Temecula Valley vine loss has been estimated at 50%.

Previously vine loss from PD was 1% to 5% a year.

Losses to growers due to PD before the use of effective pesticides against GWSS estimated at $46 million.

Policy Response

By the late 1990s the GWSS had spread into the lower San Joaquin Valley and was threatening table, raisin and wine grape industries further north.

To prevent further spread of GWSS throughout the state a public containment program was adopted. The containment program has two parts:

Policy Response

Quarantine on the movement of host material including nursery stock from infested areas.

Treatment of GWSS in citrus to reduce their numbers before grapevines come out of dormancy in the spring.

Current Economic Effects

Grape Growers Grape growers are now able to treat with

chemical pesticides to reduce infestations of GWSS. This has reduced the economic effect of GWSS and PD for grape growers as treatment costs are less than vine death.

Treatment involves an annual soil application of imidcloprid and, when needed spray applications with danitol.

Current Economic Effects

Grape Growers – SJV vs Tem In the San Joaquin Valley imidacloprid is

applied during normal irrigations. No separate irrigation is needed.

In the Temecula Valley about 50% of the time a separate irrigation is needed in order to apply imidacloprid when it will be most effective.

Current Economic Effects

Grape Growers Because table grapes are field packed, table

grape growers do not incur any costs to meet quarantine regulations.

Wine grape growers in quarantined areas do not incur additional costs if the grapes are processed within the quarantine zone.

Current Economic Effects

Citrus Growers Citrus growers are affected by the quarantine

and containment program.

Overwintering GWSS on citrus do not typically cause economic losses greater than the costs to treat infestations.

Current Economic Effects

Citrus Growers As part of the containment program citrus

growers voluntarily treat their own groves for GWSS.

In the San Joaquin Valley groves are typically treated once every three years with a fall treatment of Assail and a spring treatment of imidacloprid. Treatments are coordinated by a central agency so that a large continguous entire area can be treated during the same years.

Current Economic Effects

Citrus Growers In the Temecula Valley citrus is treated in the

spring with Imidacloprid.

Citrus is treated when GWSS is found on traps. Acreage not necessarily continguous.

Seems to be greater resistance by citrus growers to treat for GWSS.

Current Economic Effects

Citrus Growers Citrus grower expenses to control for GWSS

are reimbursed.

Fresh citrus that leaves a quarantine area must be inspected and treated.

Current Economic EffectsImportance of Citrus

Treatment If grove treated during the winter then

vineyard treatment consists of an annual treatment of imidacloprid and a spray treatment of Danitol about half of the time.

If grove not treated, vineyard treatment consists of an annual treatment of imidacloprid and at least 2 spray treatments of Danitol.

Current Economic EffectsBenefits

The cost to treat for GWSS needs to also include the substitution effect on other pest control treatments.

GWSS control suppresses leaf hoppers in grapes and red scale in citrus.

Current Economic EffectsTax Payers

Public funds were used to compensate growers for removing vines infested with PD.

Public funds used for the containment program and compensation for citrus growers.

Market Effects

California is the largest producer of grapes and fresh citrus, so changes in the cost of production will be passed on to consumers.

Higher market prices will cause consumers to demand less, causing prices to fall, but not to pre-infestation levels.

Current Economic EffectsMarket Effects

Even with higher prices some growers would remove vineyards from production.

Net effect is less production, less market supply and higher prices.

Current Economic EffectsMarket Effects

Economic Analysis – Objectives

To measure the losses to consumers and producers as illustrated by the blue area.

Measure the losses to consumers and producers should the public program be discontinued.

Estimate assessment rates should the public program be discontinued and affected industries fund a privately funded program.

What will a private program look like?

Proportionate to benefits.

Do growers in areas without GWSS benefit from control of GWSS in Temecula and Coachella Valleys?

Citrus packers in “clean” areas.

What will a private program look like?

What will be the effect on growers in the Northern San Joaquin Valley, and Napa, Sonoma and Russian River Valleys if GWSS spreads into those areas?

Would private funds be better used to invest in plant breeding and biological control to reduce pest management costs?