ECONOMIC IMPACTS OF USING VIRUS-TESTED GRAPEVINESBy: Jason Alan Troendle
Grapevine leafroll disease (GLRD) is one of the most important virus diseases of grapevines around the country and the world. The disease reduces yields, delays fruit ripening, reduces soluble solids and can cause irregular or undesirable flavors. One response to minimize economic losses from GLRD, is the use of virus-tested grapevines. This study constructs a cost benefit analysis of using this material in California and New York. Benefits arise from the reduction in costs and increase in yield due to the reduction of disease prevalence from planting screened material and optimally managing the disease. Virus-tested material is available to nurseries and growers from grape centers including Foundation Plant Services in Davis, California and New York State Agriculture Experiment Station in Geneva, NY. Over the period 2006-2015 in California, estimated cumulative benefits by 2015 are $1.51 billion (2002 dollars) and cumulative costs to operate Foundation Plant Services in Davis, CA, amount to $12.9 million, a benefit to cost ratio of 117. Projecting over the next ten years, by 2025 cumulative net benefits (benefits-costs) will reach an estimated $3.26 billion. Across the country in New York, benefits do not accrue until 2020 due to later adoption of virus-tested material. We estimate cumulative benefits reach $19.5 million and funding from the National Clean Plant Network (NCPN) to operate the grape center in Geneva, NY totals $2.7 million by 2025. Additionally, this thesis conducts a welfare analysis to determine the distribution of net benefits within California between grape producers and wine producers who purchase grapes to crush. The results suggest that grape growers receive most benefits because supply is inelastic relative to demand. These findings are valuable to understand the return of public and private investment in grape centers that produce virus-tested stocks for the industry, as well as help the industry understand the economic benefits of using the material, incentivizing stronger adoption.
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