preventing biological pollution the mediterranean fruit ... · affluent population is highly mobile...

– 2003 –

CALIFORNIA

DEPARTMENT

OF FOOD AND

AGRICULTURE

PREVENTING BIOLOGICAL POLLUTION:The Mediterranean Fruit Fly Exclusion Program

JHillard

Click Here to Go to Table of Contents

– 2003 –

CALIFORNIA

DEPARTMENT

OF FOOD AND

AGRICULTURE


Gray Davis, Governor

William (Bill) J. Lyons Jr., Secretary


Published by the California Department of Food and Agriculture1220 N Street, Sacramento, CA 95814

Completed in consultation with Dr. Jerome Siebert, Professor EmeritusDepartment of Agricultural and Resource Economics and PolicyUniversity of California, Berkeley

JHillard


REPORT TO THE CALIFORNIA LEGISLATURE 1 CDFA MEDFLY EXCLUSION PROGRAM

Table of Contents

The Concept of Biological Pollution .............................................................................................................. 2

The Mediterranean Fruit Fly ............................................................................................................................ 3What Is This Pest and Why Is It So Destructive? ....................................................................... 3Staggering Initial Losses .................................................................................................................... 3High Ongoing Costs .......................................................................................................................... 4An Environmental Threat ................................................................................................................. 6How Does This Pest Arrive in California? ................................................................................... 6A Changing World ............................................................................................................................. 8

The Medfly Exclusion Program ....................................................................................................................... 9Preventing Invasions: California’s Comprehensive Pest and Disease Exclusion System ... 9Medfly Exclusion: A Special Program for a Special Pest ........................................................... 9Scientific and Fiscal Considerations ............................................................................................ 10Program Costs ................................................................................................................................. 10

Supplemental Report Request and Funding Options ............................................................................. 11Option 1: Continuing Full State General Fund Support ........................................................ 11Option 2: Existing Food and Agricultural Fund ........................................................................ 11Option 3: Assess Domestic Producers ..................................................................................... 12Option 4: Assess the Agri-food System..................................................................................... 14Option 5: Assess Consumers ...................................................................................................... 15Option 6: Assess International Travelers and Commerce .................................................... 15Option 7: Negotiated Full Federal Funding .............................................................................. 16

Charts, Graphs & Illustrations:Some Common Medfly Host Crops .............................................................................................. 4California Agricultural Employment .............................................................................................. 5Medfly Eradication Costs 1980-2002 ............................................................................................ 6Medfly Interceptions and Pathways ............................................................................................... 7Medfly Science Advisory Panel Members .................................................................................. 10Oranges: Grower vs. Retail Prices In Los Angeles County, Third Quarter 2002 ............. 14


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The Concept of Biological Pollution

Red imported fireants (above),

water hyacinth(right) and gypsy

moths (below)are other examples of invasive

biological pollution inCalifornia.

California is at a crossroads. As thefifth largest economy in the world,poised on the Pacific Rim, we are atthe cutting edge of globalization. Ouraffluent population is highly mobile andits diverse cultures create great demandfor imported foods and other goods.

With this increasing movement ofpeople and commerce, our environ-ment is at special risk from the unin-tentional introduction of exotic andinvasive species. These range fromplants and animals to insect pests andvarious diseases. Invasive species areconsidered the second-greatest threatto biological diversity (after habitatloss) and are a leading factor in listingsunder the Endangered Species Act.Ecologists increasingly refer to thiscollection of invasive organisms as“biological pollution,” a significantthreat to California’s people, com-merce, and environment.

Working with our agency partners,the California Department of Foodand Agriculture has significantresponsibilities to protect our statefrom biological pollution. We work toeradicate the red imported fire ant, a

scourge to wildlifeand urban envi-ronments. We fightinvasive aquaticweeds such as

caulerpa, hydrilla, and water hyacinth.We combat terrestrial weeds such asyellow star thistle that displace nativehabitats, contribute to forest fires, andharm wildlife. We have successfullyeradicated dozens of infestations ofgypsy moth that threaten our forestresources, and have devoted manyhours to defeating threats to urbanlandscapes, ranging from the red gumlerp psyllid to the Japanese beetle.

To protect the food supply, over thepast year the Department has testedover 160,000 cattle in an effort toeradicate bovine tuberculosis. As ofthis writing, 1,700 state and federalemployees are devoted to ridding thestate of exotic Newcastle disease, themost infectious disease known to affectall species of birds.

These invasive pests and diseases sharethree things in common:

! They came to California from otherareas of the globe;

! Their new home has many of theattributes of their native environ-ments, but typically none of theirnatural enemies, making thempowerful foes against our nativespecies; and

! They were brought here by theinternational movement of peopleand products.

Exotic and invasivespecies constitute a

form of biologicalpollution that

threatens America’speople, commerce,

and environmentto the tune of$100 billion

annually.1

1 David Pimentel, et al., “Environmental and EconomicCosts Associated With Non-Indigenous Species in theUnited States,” Paper presented at the annual meetingof the American Association for the Advancement ofScience, Anaheim, California, Jan. 1999.

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The Mediterranean Fruit Fly

Medflies attackripening crops bypiercing the skinand laying eggsthat hatch into

larvae. The larvae feed on the pulp,rendering the food unfit for humanconsumption.

WHAT IS THIS PEST AND

WHY IS IT SO DESTRUCTIVE?One of the world’s most destructivepests affecting the food supply is theMediterranean fruit fly, or Medfly(Ceratitis capitata). This pest originatedin Africa and today can be found inmost tropical and subtropical areas ofthe world. The Medfly threatens thefood we eat because it attacks ripeningcrops by piercing the fruit or vegetableskin and laying eggs in the puncture.The eggs then hatch into larvae, ormaggots, which feed on the pulp,rendering the food unfit for humanconsumption.

California is at special risk from thisform of biological pollution given thestate’s proximity and ties to Medfly-infested regions of the globe and ourstatus as the world’s leader in agricul-tural production.

The mainland United States hasconfronted only isolated Medfly infes-tations so far thanks to aggressiveexclusion programs in susceptiblestates. If this pest were to becomegenerally established here, tremendousharm would be felt throughout society.Growers would face increased produc-tion costs, workers would be impactedby job losses, and the general publicwould be harmed by higher food costs,lifestyle impacts, and sharply reducedstate revenues.

STAGGERING INITIAL LOSSES

If California were to become suddenlyand broadly infested with the Medfly,first-year losses would be measured inthe billions of dollars. Part of thiswould be due to direct damages to food

from the insect, but most of the finan-cial impacts would accrue from tradelosses. This is because so much ofCalifornia’s food production is con-sumed outside the state.

Trading partners, both in the UnitedStates and abroad, would immediatelyclose their borders to our productsuntil such time they were satisfied thatongoing treatment and control pro-cesses were in place. Some tradingpartners would never want to acceptthe agricultural imports of a Medfly-infested region, either out of fear of afailure in the treatment system, or as astrategy to protect the markets of theirown industry.

A quarantine onproducts leaving thestate could result inhuge product losses

California is at special risk from Medflyinfestations given the state’s proximityand ties to Medfly-infested regions of

the globe and our status as the world’sleader in food production.

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because of the perishable nature ofagricultural goods and the limitedcapacity of storage and treatmentfacilities. Treatment materials, pro-cesses and facilities to deal with anongoing Medfly infestation could takemonths or years to put into place.During that time, trading partnerswould turn to what they would regardas more reliable suppliers of agricul-tural products. Likewise, our competi-tors would use their Medfly-free statusas a marketing tool to lure customersaway from California suppliers. Restor-ing these lost markets could take years.

Some impacts of a Medfly infestationare hard to quantify. For example,affected residential areas would facefrequent government treatment regi-mens and the loss of backyard gardens.School instructional gardens would bea thing of the past.

HIGH ONGOING COSTS

In the months and years following asudden and broad infestation, ongoingcontrol costs would also be significant.According to a University of Californiastudy2 that examined a representativesample of Medfly-vulnerable commodi-ties:

! Our state would stand to lose $538million in output, $259 million intotal income, $283 million in grossstate product, and 7,900 jobs.

SOME COMMON MEDFLY

HOST CROPS

COMMODITY VALUE (2001)APPLE $97,380,000APRICOT 22,330,000AVOCADO 315,842,000CHERRY 79,814,000DATE 27,777,000DRIED PLUM 101,250,000FIG 14,529,000GRAPE 2,650,873,000GRAPEFRUIT 55,242,000GUAVA NOT COMPILED

KIWIFRUIT 15,340,000KUMQUAT NOT COMPILED

LEMON 212,725,000LIME NOT COMPILED

LOQUAT NOT COMPILED

MANGO NOT COMPILED

NECTARINE 127,642,000OLIVES 90,096,000ORANGE 514,460,000PAPAYA NOT COMPILED

PEACH 246,743,000PEAR 78,163,000PEPPER 165,024,000PLUM 66,443,000POMEGRANATE NOT COMPILED

PUMMELO NOT COMPILED

QUINCE NOT COMPILED

TANGERINE 31,137,000TOMATO 766,260,000

Source: United States Department of Agriculture,National Agricultural Statistics Service.

Note: This host list reflects common and typicalhosts and is not comprehensive.


2 Jerome Siebert, “Update on the EconomicImpact of Mediterranean Fruit Fly on CaliforniaAgriculture,” Subtropical Fruit News 7, no. 6(1999).

(from 3)

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The Mediterranean Fruit FlyCALIFORNIA AGRICULTURAL EMPLOYMENT

Thousands of jobs would be affected by a broad infestation of theMedfly in California.

JULY ‘01 AUG. ‘01 SEPT. ‘01 OCT. ‘01 NOV. ‘01 DEC. ‘01 JAN. ‘02 FEB. ‘02 MAR. ‘02 APRIL ‘02 MAY ‘02 JUNE ‘02

GRAPES 33,400 48,000 56,300 40,900 23,400 28,300 31,900 28,800 25,200 29,900 35,000 40,400

TREE NUTS 3,000 9,400 11,100 8,600 6,600 5,200 6,000 7,100 6,100 7,300 5,200 7,000

CITRUS FRUITS 4,100 4,400 4,800 2,600 1,900 2,700 2,200 2,100 1,300 2,300 2,200 1,600

DECIDUOUS FRUIT 14,400 13,800 19,100 12,600 7,100 6,900 3,600 2,400 2,800 2,800 7,400 16,000

CULTIVATION 4,800 4,900 4,800 6,000 8,700 6,300 4,600 4,100 4,100 5,400 5,000 6,900

HARVEST 5,600 4,200 5,400 9,600 6,100 3,400 1,600 1,600 1,900 3,400 3,900 4,100

LABOR CONTRACTORS 153,300 155,000 149,800 114,900 99,800 86,000 77,400 77,700 82,700 110,000 127,100 138,300

MANAGEMENT SERVICES 15,500 11,000 12,000 12,400 5,900 10,500 10,400 10,500 10,600 7,200 8,600 11,900

OTHER 15,800 10,800 10,800 12,100 7,600 5,600 7,600 12,700 13,700 19,300 17,200 15,000

TOTAL 249,900 261,500 274,100 219,700 167,100 154,900 145,300 147,000 148,400 187,600 211,600 241,200

Source: Excerpts from the Employment Development Department’s California Agricultural Bulletin,www.calmis.ca.gov/htmlfile/subject/agric.htm

! A general infestation would imposeup to $341 million in additionalproduction costs on Californiaagriculture.

! Consumers could expect to pay up to$68 million in the form of higherfood costs.

! Post-harvest pesticide treatmentswould become necessary for freshproduce shipped out of California inorder to comply with quarantinerequirements. Total post-harvesttreatment costs for those commodi-ties analyzed are estimated at$169 million.

! Packing, treatment, and shippingfacilities would need to be upgraded

to have fly-excluding equipment atan estimated cost of $12.3 million.

! Transportation to special treatmentfacilities would be required in manycases at an estimated cost of $8.8million annually.

! Construction of additional methylbromide treatment chambers andcold storage facilities is estimated atover $100 million.

These cost estimates are conservativebecause the study analyzed only asmall sample of susceptible crops andassumed no reduction in productionyield or interruption to market activity.

(from 4)

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AN ENVIRONMENTAL THREAT

A Medfly invasion would also result incosts to the environment. For example,the wide scale use of additional pesti-cides necessary for eradication couldinterrupt integrated pest managementpractices that have successfully re-duced chemical risk on California’sconventional farms. The state’s bur-geoning organic industry could alsoface higher production costs, severereductions in yield, and the likely needfor crop protection treatments.

HOW DOES THIS PEST ARRIVE

IN CALIFORNIA?The best available scientific evidenceindicates that the Medfly is not perma-nently established in California, butthat the pest occasionally enters thestate from other parts of the world.Research at the University of Hawaii,

the University of California, Berkeley,and Pennsylvania State Universityanalyzing the DNA of Medflies re-cently captured in California, ledexperts to conclude that “…the fly canand does invade California with hu-man help from a number of sourcesincluding Central and South Americaand Hawaii.”3

Imports and international travelers areincreasingly common paths of entry forthe Medfly because it is impossible tomonitor every shipment and passengerthat might carry the pest. This explainswhy California’s comprehensive pestdetection network traces new Medflyoutbreaks to urban—not rural—environments.

MEDFLY ERADICATION COSTS 1980-2002

Source: California Department of Food and Agriculture, Division of Plant Health and Pest Prevention Services.

$100million

$2.1million

$3.357million

$61.64million

-0-

$27.886million

$1.291million

$3.059million

-0- $65,752-0- -0-

$30.2million

$10.383million

$9.575million

$13.3million

$ MILLIONS

110

100

90

80

70

60

50

40

30

20

10

0YEAR 80-82 87-88 88-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02

1996:MEDFLY EXCLUSIONPROGRAM BEGINS


3Memorandum from Mediterranean Fruit FlyScience Advisory Panel to CDFA, Sept. 10,2002.

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Medfly Pathways

Of the last seven Medfly infestations in Southern

California, DNA analysis shows that all but one

resulted from separate, unrelated introductions of the

pest. In addition to these infestations originating from

Central America, Hawaii and South America,

infested produce intercepted at California ports

shows that infestations could come from many other

countries around the world.

MEDFLY INTERCEPTIONS:L.A. INTERNATIONAL AIRPORT

Medfly-infested produce has beenintercepted by inspectors at LosAngeles International Airport onflights from many countries since 1990.

MONTH YEAR ORIGIN

JANUARY 1990 EL SALVADOR

MAY 1990 EL SALVADOR

AUGUST 1990 HONDURAS

AUGUST 1991 ISRAEL

AUGUST 1991 ISRAEL

DECEMBER 1991 EGYPT

SEPTEMBER 1992 ISRAEL

MARCH 1993 PERU

JULY 1993 BRAZIL

JULY 1993 IRAN

AUGUST 1993 GREECE

SEPTEMBER 1993 EGYPT

SEPTEMBER 1993 GHANA

SEPTEMBER 1993 ITALY

OCTOBER 1993 EGYPT

OCTOBER 1993 ITALY

OCTOBER 1993 LEBANON

OCTOBER 1993 MALTA

NOVEMBER 1993 ISRAEL

JANUARY 1994 GHANA

FEBRUARY 1994 PERU

APRIL 1994 EL SALVADOR

JUNE 1994 ISRAEL

NOVEMBER 1994 ISRAEL

NOVEMBER 1994 MEXICO

DECEMBER 1994 ISRAEL

MAY 1995 NICARAGUA

AUGUST 1995 EGYPT

DECEMBER 1995 COSTA RICA

DECEMBER 1995 EGYPT

FEBRUARY 1996 NICARAGUA

MARCH 1996 PERU

APRIL 1996 PERU

OCTOBER 1996 PERU

OCTOBER 1996 ISRAEL

JANUARY 1997 GUINEA

MARCH 1997 PERU

APRIL 1997 PERU

AUGUST 1997 UNITED ARAB EMIRATES

SEPTEMBER 1997 UNITED ARAB EMIRATES

NOVEMBER 1997 BRAZIL


MARCH 1998 AUSTRALIA

OCTOBER 1998 EGYPT

OCTOBER 1998 TURKEY


JULY 1999 EGYPT

SEPTEMBER 1999 HONDURAS

AUGUST 2000 NICARAGUA

SEPTEMBER 2000 SYRIA

DECEMBER 2000 PHILIPPINES

MAY 2002 PERU

NOVEMBER 2002 EGYPT

MEDFLY INFESTATIONS AND THEIR ORIGINS

1997-2001

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A CHANGING WORLD

While leading academic experts haveconcluded that international travelersand imported produce have historicallybeen responsible for Medfly introduc-tions, a new menace faces Californians:the specter of deliberate introductionof pests and diseases with intent to doharm to our economy and environ-ment. We call this bioterrorism oragroterrorism, and it is a real threat toour food supply.

Biological terror can be low in cost,low in technology, and is capable ofcausing massive disruptions to oureconomy and way of life. While thereis no evidence to suggest that anyMedfly introduction to date has beendeliberate, we must be ever watchful.Faced with this new threat, CDFAconsiders Medfly exclusion and rapidresponse to be even more essential forthe protection of our food supply andeconomy.

The Mediterranean Fruit FlyIt is well established that theMedfly is unable to come toCalifornia without humanhelp. All Medfly findings todate in California are attrib-uted to:

! The traveling public whounwittingly (and illegally)carried the Medfly into theUnited States on produceobtained outside the state; or

! Legal shipments of importedproduce that did not receiveadequate post-harvest treat-ment; or

! Smuggled produce.

4 Peter T. Jenkins, “Paying for Protection fromInvasive Species,” Issues in Science andTechnology, Fall 2002.

“The past 8 years have seen adramatic 82 percent increase in U.S.

imports, and there is no reason to thinkthat the arrival of harmful invasivespecies has not increased apace.” 4

Faced with the new threat ofbioterrorism, CDFA considers Medflyexclusion and rapid response to beeven more essential for the protectionof our food supply and economy.

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MEDFLY EXCLUSION: A SPECIAL

PROGRAM FOR A SPECIAL PEST

Given the high societal costs of re-sponding to Medfly infestations,significant additional efforts go towardscombating this special threat. OurMedfly Exclusion Program focuses onthe Los Angeles Basin because itsmany ports of entry receive millions ofinternational visitors and productsfrom infested nations. The area is alsohome to periodic produce smugglingoperations. And, because the region’sclimate is favorable to the Medfly, thepest thrives once here.

Rather than relying on chemicals tostop new Medfly infestations, our statehas developed a unique, environmen-tally friendly approach: CDFA raisesmillions of sterile male Medflies andreleases them within the high-riskarea. These sterile flies will mate withany wild, fertile female Medflies thathave been introduced into the area.Reproduction is curbed because theeggs resulting from this pairing with asterile male will not hatch.

In the years since CDFA began aerialreleases of millions of sterile flies, newinfestations of wild fertile flies in therelease zone dropped from an averageof seven per year to just three over thepast six years. The most recent wildMedfly finding in California was afemale that was shown to have matedwith a sterile male—the exact resultthe exclusion program is meant togenerate.

PREVENTING INVASIONSCalifornia’s Comprehensive Pest and Disease Exclusion System

California has assembled the most comprehensiveplant pest and disease exclusion system in the world.

CDFA scientists work hand in hand with USDA, countyagricultural commissioners, University of Californiaresearchers and the agricultural communityto protect California’s environment and its people fromdestructive pests, plant species, and diseases.

The Department manages programs for excluding,detecting, eradicating and controlling harmful insects,weeds, plant diseases, and rodents. CDFA operatesinspection stations along California’s borders to screenvehicles for pests. Large shipments entering by land, seaor air are inspected at unloading and transfer sites withinthe state. The Department also manages an insecttrapping program that deploys more than 100,000detection traps in peak months. CDFA also operates astate-of-the-art diagnostics center foridentifying insects, plant diseases, weeds, seeds, andother harmful agents.

The Medfly Exclusion ProgramSince the release of sterile flies began,new infestations in the release zonedropped from an average of seven

per year to just three over thepast six years.

Sterile release is the most effective methodfor preventing new Medfly infestations.

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SCIENTIFIC AND FISCAL

CONSIDERATIONS

Over the years, there has been somediscussion as to whether the release ofsterile Medflies constitutes exclusion,eradication, or control. The distinctionhas both scientific and fiscal implica-tions.

Exclusion programs work by preventinga pest not found within a particularjurisdiction from establishing itself.Eradication programs, on the otherhand, are meant to eliminate infesta-tions of new pests that have alreadypenetrated an exclusion barrier. His-torically in California, exclusion anderadication of pests have been consid-ered General Fund responsibilities.Control programs, which are efforts todeal with well-established and ongoingpest infestations, in recent years havetended to be industry funded.

The Mediterranean Fruit Fly ScienceAdvisory Panel—which comprises theworld’s premiere experts in Medfly

research—concluded in 2002 that“the fly is not permanently establishedin the state,” and that according to thebest available scientific evidence, theMedfly Exclusion Program “cannot beconsidered a control program becausethere are no permanently establishedMedfly populations in California tocontrol.” 6

PROGRAM COSTS

The Medfly Exclusion Program costsapproximately $18.8 million annually;half of this cost is borne by the federalgovernment in a dollar-for-dollarmatching arrangement with the stateGeneral Fund. The Administrationand Legislature have consistentlysupported this funding arrangementover the past seven budget years.

The Medfly Exclusion Program

The MedflyExclusion Program

cannot beconsidered a control

program becausethere are nopermanently

established Medflypopulations in

Californiato control.

Every dollar spent on earlyintervention against exotic andinvasive species, on average,

prevents $17 in later expenses.5

5 Congressional Office of Technology Assessment, “Harmful Non-Indigenous Species in the United States,” 1993.6 Source: Memorandum from Mediterranean Fruit Fly Science Advisory Panel to CDFA, Sept. 10, 2002.

MEDFLY SCIENCE ADVISORY PANEL MEMBERS:

Dr. Eric Jang, USDA, Hilo, Hawaii

Dr. Jorge Hendrichs, U.N. Food and Agriculture Organization,International Atomic Energy Agency, Vienna, Austria

Dr. Richard Rice, University of California

Dr. Kingsley Fisher, USDA, Honolulu, Hawaii

Dr. Aldo Malavasi, University of Sao Paulo, Brazil

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In 2002, the Legislature asked theDepartment to explore potentialfunding sources that might offset someor all of this program’s cost to the stateGeneral Fund.

Although we present a number offunding options for the Medfly Exclu-sion Program, the Department stronglyrecommends support of the Governor’sBudget: full state General Fund sup-

Supplemental Report Request

OPTION 1. CONTINUING FULL STATE GENERAL FUND SUPPORT

port for this essential program. Otherfunding options have varying merit,and are presented for discussionpurposes only.

Although we present a number of funding options for theMedfly Exclusion Program, the Department stronglyrecommends support of the Governor’s Budget: full stateGeneral Fund support for this essential program.

Continuing full General Fund supportof the Medfly Exclusion Program is inkeeping with the Governor’s 2003-2004 Budget. The Department feelspermanent support is warranted giventhe broad societal costs in the event ofa general Medfly infestation (impactsto the state economy in the billions ofdollars) and scientific consensus thatinternational travel and the importa-

tion of products are responsible for newMedfly introductions. In addition,federal matching funds are at risk.Faced last year with a potential erosionof state support for this program,USDA sent CDFA an advisory thatany reductions in state support forMedfly Exclusion would be met by adollar-for-dollar cut by the federalgovernment.

OPTION 2. EXISTING FOOD AND AGRICULTURE FUND

Any reduction instate support forMedfly Exclusionwill be met by adollar-for-dollarcut by the federalgovernment.

Last year, budget supplemental reportlanguage requested that the Depart-ment examine replacing some or all ofthe state’s General Fund support forMedfly Exclusion with money from theAgriculture Fund. For the purposes ofthis report, we took this request tomean evaluating and presenting abroad range of funding options, rangingfrom industry assessments to otherfunding mechanisms. This is necessarybecause the existing Agriculture Fundis not fungible.

Rather than one large pool servingindustry, the Agriculture Fund is madeup of dozens of separate sub-accounts,ranging from those set up for truckscale license fees to gasoline octanetesting. The largest sub-account by faris the Milk Producers Security TrustFund, an industry self-assessmentintended to cover milk processorbankruptcies (and clearly not a com-modity at risk for Medfly). These sub-accounts reflect explicit statutorymandates (166 at the last tally), with

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legislative prohibitions on the use ofthese funds for purposes other than forwhich they were collected.

While the Agriculture Fund is notfungible, sub-accounts within the Fundcan borrow from other sub-accounts.This is necessary because of widefluctuations in cash flow for sub-accounts serving any given commodity.Also, upon appropriation, the General

Fund can borrow against the Agricul-ture Fund (the customary level ofinterest accrues on the amount bor-rowed). For example, in the 2002-2003Budget Act, the Legislature directedthat the General Fund borrow $15million from the Agriculture Fund.The Governor’s 2003-2004 Budgetextends repayment of this loan untilOctober 2004.

Funding Options

OPTION 3. ASSESS DOMESTIC PRODUCERS

This option considers setting up anew, multiple-commodity assessmentmechanism to pay for Medfly exclu-sion.

Setting up an industry assessmentprogram for a single commodity is arelatively simple task and typicallytakes only a few years to accomplish.The Department has many examples ofsuch programs for single commoditiesbased on a per-unit assessment stan-dardized across the industry. Such asystem quickly becomes challengingonce the concept of a multiple com-modity assessment program is intro-duced. This is due to vast differencesbetween commodities in terms of howthey are grown, processed, packaged,transported, and marketed. Considerthe following:

! There is tremendous diversity ofvarieties within each Medfly hostcrop; even within the same variety,there are often varying uses and

packaging. To offer but one example,California grows 82 varieties ofgrapes. Some are used for the freshmarket, some for juice concentrate,some for wine, and others for raisins.For some varieties, there is no consis-tent market (growers will send theirproduct to the most profitable usethat season). Within the wine grapesector, profitability varies tremen-dously by variety and by region (e.g.,Bakersfield or Napa). Given all ofthese unique factors with eachvariety and region, it took the winegrape sector of the industry nearly adecade to agree upon a self-assess-ment program to fund the simplegathering of production data.

! The agricultural community useshundreds of different shipping con-tainers, including differing containersfor the same product, making a per-unit assessment infeasible. Somecommodities are sold in bulk form(e.g., watermelon and wine grapes),

OPTION 2 (continued)

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while some may be sold either pack-aged or in bulk (e.g., tomatoes), andstill others may be offered in con-sumer or gift packaging.

! Prices and profitability vary widely.To again use grapes as an example, incertain areas of the state, somevarieties will receive $75 a ton; inothers, a good variety and appella-tion will bring several thousanddollars.

Because of high input costs andcompetition, farm products are quiteoften sold below the cost of produc-tion. In these cases, a complicatedpayment withholding system mightbe needed to secure payment.

! Production, processing, packaging,transportation and marketing involvetens of thousands of locations,including field packing, all of whichwould interfere with administrationof a per-unit assessment process.

! There is widespread use in agricul-ture of set-asides and consignmentsales, in which the price is notdetermined until the product reachesan East Coast or internationalmarket. Some crops, such as raisinsand nuts, are put into storage forlong periods of time, and no pricewill be assigned until the product issold, often months or even yearslater.

! Pest risk varies greatly betweencommodities, varieties, and withgeography and climate. In the caseof Medfly, there are dozens of hostcommodities with differing appeal or

susceptibility to the pest. Shouldthose who grow preferred host cropspay more than those who produce aproduct with less appeal for this pest?If two growers produce the samecommodity, should the one living inan ideal Medfly climate pay morethan one whose climate does notreadily support the pest?

! Because international travel andfood imports have been shown to bethe primary pathways for this pest toenter the state, assessing the victimsof Medfly infestations may triggerprovisions of Proposition 218, whichimposes various requirements ongovernment depending on whetherthe revenue is determined to be anassessment, a fee, or a tax.

! The state would incur high adminis-trative costs for setting up an infi-nitely complex multiple-commodityassessment, auditing and collectionprogram.

Despite a good faith effort, theDepartment is unable to offer aviable direct-assessment frameworkthat would spread Medfly exclusioncosts equitably and efficiently acrossvastly different industries. Among allof these many products and varieties,there is no one commonality uponwhich to base such an assessment.Tremendous differences in thegrowing, processing, packaging,transportation, and marketing offood products make it infeasible todirectly assess the victims of Medflyinfestations.

Tremendousdifferences in thegrowing, processing,packaging,transportation, andmarketing of foodproducts make itinfeasible to directlyassess the victims ofMedfly infestations.

Funding OptionsOPTION 3 (continued)

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This suggestion, for discussion pur-poses, would have an assessmentremitted by retailers to support foodsafety and programs that guard againstfood-borne pests and diseases. Thebasic rationale for this option is toaccrue societal costs for these programs(not just the Medfly) to the agri-foodsystem (rather than just to domesticfarmers, who are not responsible forthese infestations and receive a verysmall share of the consumer fooddollar).

The merits of this option include:

! Reduced state costs and ease ofprogram administration because ofrelatively few retailers, many ofwhich are capable of electronicallytracking their sales and inventories.

! Retailers’ increased ability to absorb,distribute, and/or pass along coststhroughout the agri-food system (toimporters, domestic farmers, dis-tributors, transporters, wholesalers,jobbers, and consumers), due totheir comparatively greater marketpower.

! More equitable distribution of theconsumer’s retail food dollar forfresh fruit and produce. Becausedomestic farmers receive a verysmall share of the consumer’s fooddollar, it makes little sense to assessthem for a benefit enjoyed by theentire system. For example, beloware grower prices versus retail pricesof oranges, a commodity vulnerableto the Medfly, sold at retail in LosAngeles for the third quarter 2002.

Sources: USDA Market News Reports for grower prices; U.S. Marketing Services for retail prices.

WEEK GROWER PRICE AVERAGE RETAIL % OF RETAILENDING (PER ORANGE) PRICE (PER ORANGE) RECEIVED BY GROWER

09-27-02 $0.11 $0.46 24%09-20-02 0.11 0.51 22%09-13-02 0.11 0.51 22%09-06-02 0.10 0.51 20%08-30-02 0.10 0.41 24%08-23-02 0.10 0.51 20%08-16-02 0.11 0.51 22%08-09-02 0.11 0.51 22%08-02-02 0.12 0.51 24%07-26-02 0.11 0.53 21%07-19-02 0.10 0.44 23%AVERAGE 0.11 0.49 22%

OPTION 4. ASSESS THE AGRI-FOOD SYSTEM

Funding Options

ORANGES

GROWER VS.RETAIL PRICES

IN LOS ANGELES

COUNTY, THIRD

QUARTER 2002

This chartillustrates grower

prices vs. retailprices of oranges,

a commodityvulnerable to

the Medfly.

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Funding OptionsOPTION 5. ASSESS CONSUMERS

This concept is slightly different fromoption four. While funds would also beremitted by retailers, this programwould assess consumers to pay for foodsafety, pest and disease exclusion, aswell as retailer and state administrativecosts. The foundation of this discus-sion item is the broad societal benefitgenerated by pest and disease exclu-sion programs and that consumerdemand for food imports is directlyresponsible for transmitting much ofthis biological pollution.

Implementation would require legisla-tion to remove food sales tax exemp-tions contained in sections 6351 to6358(f) of the Revenue and TaxationCode. It would likely require additionallanguage to be added to the Food andAgricultural Code enabling food salesassessments to be used for this programand a concurrent budget changeproposal to provide for control lan-guage within the Governor’s Budget.

OPTION 6. ASSESS INTERNATIONAL TRAVELERS AND COMMERCE

International travel and importedproducts account for all of the path-ways by which Medfly and other food-borne pests and diseases can enter theUnited States. In light of this, theUSDA currently charges airlines andother commercial carriers a fee tocover the cost of providing quarantineand plant health inspection servicesthat enable the safe and pest-free entryof passengers and commercial cargointo the United States. USDA supportscollecting fees from those with the

potential to spread biological pollutionas an equitable means of matchingprogram costs to users.

Currently there is a state-imposed portfee to monitor and prevent biologicalpollution from ship ballast water. Thisprogram, implemented in 2000,charges $200 per commercial vesselcalling on California ports, generating$1.8 million annually to assist the stateResources Agency in its mission toprotect the state from exotic andinvasive aquatic species.

In the early 1990s, CDFA had in placea similar program funded by user feesfrom both air and marine carriersengaged in foreign commerce. Fees of$200 for vessels and $85 for aircraftarriving in the state created a fund of

7 Peter T. Jenkins, “Paying for Protection from Invasive Species,” Issues in Science and Technology, Fall 2002.8 Dr. James T. Carlton, “Introduced Species in U. S. Coastal Waters,” Pew Oceans Commission, 2001.

“Industries thatplay a fundamentalrole as vectorstransporting non-native speciesshould bear moreof the costs ofprevention, control,and research.” 8

“In short, we need to move to the‘polluter pays’ principle. This well-

respected strategy, which hasdemonstrated its effectiveness in raising

funds for oil pollution cleanup, couldalso work for biological pollution.” 7

All 23 Medflyinfestations thathave beensuccessfullyeradicated inCaliforniaoriginated inurban areas.

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Funding Options

approximately $3 million that was usedto increase inspections and investiga-tions and to administer a public out-reach program to protect the statefrom exotic and invasive species.

The program was suspended in 1996,however, when the courts ruled thatthe fees were not applied uniformlyacross all commercial carriers. Legisla-tion that would address the court’sconcerns—applying similar fees tooverland tractor-trailers —appears to


“Releases of invasive species arecompelling large additional expendituresof public funds. In essence, taxpayers are

subsidizing economic globalization bypaying to clean up the biological

messes it leaves behind.” 9

9 Peter T. Jenkins, “Paying for Protection from Invasive Species,” Issues in Science and Technology,Fall 2002.

be necessary in order to reinstate thisuser-fee program.

Hawaii warrants special considerationsince it is a domestic, not interna-tional, source of the Medfly.

OPTION 7. NEGOTIATED FULL FEDERAL FUNDING

CDFA Secretary William Lyons Jr. andhis border-state colleagues have laid asignificant foundation for additionalfederal support for food safety and pestprevention. They have formed analliance known as NFACT (comprisedof the secretaries of agriculture of NewMexico, Florida, Arizona, California,and Texas). The purpose of this coali-tion is to bring attention to the needsof border states in federal agriculturalpolicy discussions.

The case for full federal support ofpest and disease exclusion programs isfour-fold:

! First, the federal government gener-ally preempts the several states in

border matters, and it overseesinternational quarantine regulationsfor invasive pests. It could be arguedthat because periodic Medfly inva-sions in California are the result ofpenetration of the federal exclusionsystem, the federal governmentshould bear the entire fiscal responsi-bility of guarding against new Medflyintroductions.

! In addition, the federal governmentis now placing additional emphasison opening U.S. markets to the goodsof friendly and strategically valuednations, a laudable foreign policythat emphasizes economic develop-ment in lieu of blanket aid. An

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Funding Options

unfortunate and unintended conse-quence of this new policy is thepotential for additional pest anddisease risk to U.S. border states thatproduce specialty crops. This lag ofagricultural policy behind foreignpolicy, the Department feels, repre-sents a type of unfunded federalmandate to the several states andtheir industries.

! A third reason for improved federalparticipation is the need to addressthe potential threat of bioterrorismand agroterrorism—the deliberateintroduction of pests and diseaseswith the intent to do harm. Invasiveagents ranging from Mediterraneanfruit flies to foot and mouth diseaseare naturally occuring and readilyavailable in many parts of the world.There is an ample case to be madethat the deliberate introduction of theMedfly would have devastatingeffects on the American economyand food supply.

! Finally, the diversion of USDAborder inspection resources (both interms of funding and personnel) tothe new Department of HomelandSecurity creates an uncertain futurefor efforts to guard against uninten-tional pest introductions. It is ourhope that the federal government’sbiosecurity capabilities will be main-tained or upgraded under this newmanagement arrangement.

All of these dynamics make a case forfull federal funding of Medfly exclu-sion and similar programs thatprotect people, commerce, and theenvironment. While such an ar-rangement is meritorious, it wouldtake significant lead-time. It wouldmost likely require new federallegislation or additional fundingplaced in the USDA’s line itemswithin the President’s budget.

A disadvantage of full federal fund-ing of pest and disease exclusion isthat CDFA may have to relinquishmanagement of these efforts to thefederal government.

While full federal funding of pest and disease exclusionis meritorious, it would take significant lead-time.

A disadvantage of full federal funding ofpest and disease exclusion is that CDFAmay have to relinquish management ofthese efforts to the federal government.


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– 2003 –

CALIFORNIA

DEPARTMENT

OF FOOD AND

AGRICULTURE

preventing biological pollution the mediterranean fruit ... · affluent population is highly mobile...

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