Assessing the Returns to R&D on Perennial Crops: The Costs and Benefits of Pierce's Disease Research in the California Winegrape Industry

Pierce’s Disease (PD) of grapevines costs more than $100 million per year, even with public control programs in place that cost $50 million per year (Tumber et al., 2012). If the PD Control Program ended, and the GWSS was distributed freely throughout California, the annual cost to the winegrape industry would increase by more than $185 million (Alston et al., 2012). Using a simulation model of the market for California winegrapes, we estimate the benefits from research, development and adoption of PD-resistant vines as ranging from $4 million to $125 million annually over a 50 year horizon, depending on the length of the R&D lag and the rate of adoption. In addition to these quantitative results the paper offers insight into the broader question of economic evaluation of damage-mitigation technology for perennial crops.

[1]  David C. Cook,et al.  Assessing the threat of exotic plant pests , 2007 .

[2]  A. Havenner,et al.  The Economics and Econometrics of Damage Control , 1997 .

[3]  Chensheng Lu,et al.  In situ replication of honey bee colony collapse disorder , 2012 .

[4]  Erik Lichtenberg,et al.  Simple Econometrics of Pesticide Productivity , 1994 .

[5]  Hong Lin,et al.  Breeding Pierce's Disease Resistant Table and Raisin Grapes and the Development of Markers for Additional Sources of Resistance , 2009 .

[6]  J. Alston.  Horticultural biotechnology faces significant economic and market barriers , 2004 .

[7]  David Zilberman,et al.  The Econometrics of Damage Control: Why Specification Matters , 1986 .

[8]  Nicholas Kalaitzandonakes,et al.  Compliance costs for regulatory approval of new biotech crops , 2007, Nature Biotechnology.

[9]  Kabir P. Tumber,et al.  The Costs of Pierce's Disease in the California Winegrape Industry , 2012 .

[10]  Kabir P. Tumber,et al.  Pierce's disease costs California $104 million per year , 2014 .

[11]  J. Alston,et al.  Persistence Pays: U.S. Agricultural Productivity Growth and the Benefits from Public R&D Spending , 2009 .

[12]  B. Beattie.  Science Under Scarcity: Principles and Practice for Agricultural Research Evaluation and Priority Setting , 1995 .

[13]  James F. Oehmke,et al.  Science under scarcity: Principles and practice for agricultural research evaluation and priority setting , 1996 .

[14]  D. Zilberman,et al.  Impact of Damage Control and Quality of Output: Estimating Pest Control Effectiveness , 1992 .

[15]  G. Wittwer,et al.  Analysing a hypothetical Pierce's disease outbreak in South Australia using a dynamic CGE approach , 2006 .

[16]  David Zilberman,et al.  The Economics of Controlling Insect‐Transmitted Plant Diseases , 2002 .

[17]  M. Hoddle.  The potential adventive geographic range of glassy-winged sharpshooter, Homalodisca coagulata and the grape pathogen Xylella fastidiosa: implications for California and other grape growing regions of the world , 2004 .

[18]  Julian M. Alston,et al.  A meta-analysis of rates of return to agricultural R&D : ex pede Herculem? , 2000 .

[19]  Julian M. Alston,et al.  Spatial Externalities and Vector-Borne Plant Diseases: Pierce’s Disease and the Blue-Green Sharpshooter in the Napa Valley , 2011 .

[20]  F. Nazzi,et al.  Neonicotinoid clothianidin adversely affects insect immunity and promotes replication of a viral pathogen in honey bees , 2013, Proceedings of the National Academy of Sciences.

[21]  J. Alston,et al.  The Demand for California Wine Grapes* , 2012, Journal of Wine Economics.

[22]  Kabir P. Tumber,et al.  Economic Consequences of Pierce’s Disease and Related Policy in the California Winegrape Industry , 2013 .