Progress 10/01/10 to 09/30/11
Outputs
Progress Report Objectives (from AD-416) To estimate the total economic impacts of aflatoxin to U.S. food industries. Approach (from AD-416) An empirical economic model will be developed, using as inputs numerous cost categories to various stakeholders in the food industry (including consumers). The output will be cost to particular sectors and to particular industries (e.g., pistachio industry). Specifically, the economic impact of aflatoxin content on each commodity will be predicted by using the following categories of losses and gains that will be considered in the model: Market rejection costs of contaminated commodities, export market losses, sampling and testing costs, costs to food processors and consumers, and associated health costs. The model will be implemented in standard software systems (readily used by the cooperating scientist). Additionally, organizational theory will be used for the benefit of food industries in determining the most cost effective strategy for dealing with aflatoxin contamination problems. Specifically, we wish to answer the question: Which aflatoxin reduction/prevention methods and technologies make the most sense for industry to adopt; given costs, expected benefits, organizational design and required training? Organizational change in the corn, cottonseed, peanut, and tree nut industries must occur to accommodate ever-stricter aflatoxin standards. Organizational change typically occurs through "organizational learning" or education, although not all learning and not all changes end up being beneficial to the organization. Options for the above-mentioned industries in terms of newly available aflatoxin-elimination technologies and methods are numerous, which makes the task of choosing which ones to adopt both more hopeful and more difficult. Different behavioral change models will be combined and adapted: ORGAHEAD and the hybrid model of technology adoption. ORGAHEAD is an organizational learning model designed to test how different forms of organizations optimally respond to new information of many types. Aflatoxins are carcinogenic secondary metabolites produced by the saprophytic fungi (ones that live on decaying or organic debris), Aspergillus (A.) flavus and A. parasiticus. Due to the health impacts of aflatoxins, strict food regulations are enforced to minimize exposure. However, the regulations also reduce the profitability of affected crops. Genetically modified (GM) Bt corn, through the pest protection that it confers, has lower levels of mycotoxins: toxic and carcinogenic chemicals produced as secondary metabolites of fungi that colonize crops. In some cases, the reduction of mycotoxins afforded by Bt corn is significant enough to have an economic impact, both in terms of domestic markets and international trade. In less developed countries where certain mycotoxins are significant contaminants of food, Bt corn adoption, by virtue of its mycotoxin reduction, may even improve human and animal health. More recently, we have described an integrated assessment model that analyzes the economic and health impacts of two mycotoxins in corn: fumonisin and aflatoxin. It was found that excessively strict standards of these two mycotoxins could result in global trade losses in the hundreds of millions of U.S. dollars annually, with the United States, China, and Argentina suffering the greatest losses. We have assessed the evidence for Bt corn�s lower levels of contamination of fumonisin and aflatoxin, and estimated economic impacts in the United States. A total benefit of Bt corn�s reduction of fumonisin and aflatoxin in the United States was estimated at $23 million annually. Finally, we have examined the potential policy impacts of Bt corn�s mycotoxin reduction, on nations that are making a decision on whether to allow commercialization of this genetically modified crop. Progress of cooperators was monitored through emails, telephone calls, visits to the labs, and interactions at scientific meetings.
Impacts
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Publications
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Progress 10/01/09 to 09/30/10
Outputs
Progress Report Objectives (from AD-416) To estimate the total economic impacts of aflatoxin to U.S. food industries. Approach (from AD-416) An empirical economic model will be developed, using as inputs numerous cost categories to various stakeholders in the food industry (including consumers). The output will be cost to particular sectors and to particular industries (e.g., pistachio industry). Specifically, the economic impact of aflatoxin content on each commodity will be predicted by using the following categories of losses and gains that will be considered in the model: Market rejection costs of contaminated commodities, export market losses, sampling and testing costs, costs to food processors and consumers, and associated health costs. The model will be implemented in standard software systems (readily used by the cooperating scientist). Additionally, organizational theory will be used for the benefit of food industries in determining the most cost effective strategy for dealing with aflatoxin contamination problems. Specifically, we wish to answer the question: Which aflatoxin reduction/prevention methods and technologies make the most sense for industry to adopt; given costs, expected benefits, organizational design and required training? Organizational change in the corn, cottonseed, peanut, and tree nut industries must occur to accommodate ever-stricter aflatoxin standards. Organizational change typically occurs through "organizational learning" or education, although not all learning and not all changes end up being beneficial to the organization. Options for the above-mentioned industries in terms of newly available aflatoxin-elimination technologies and methods are numerous, which makes the task of choosing which ones to adopt both more hopeful and more difficult. Different behavioral change models will be combined and adapted: ORGAHEAD and the hybrid model of technology adoption. ORGAHEAD is an organizational learning model designed to test how different forms of organizations optimally respond to new information of many types. Aflatoxin (toxic compound) contamination of crops (corn, cotton, peanuts, and treenuts) by the fungus, Aspergillus flavus, has significant economic impact on multiple sectors in U.S. crop industries � growers, elevators, handlers/shellers, processors, distributors, and consumers due to the extreme carcinogenicity of this toxin. Aflatoxin control methods at both preharvest and postharvest levels have been developed by researchers in the U.S. Now it is important for the affected sectors to adopt these methods. What would increase adoption of methods to control aflatoxin? There are three important factors: providing economic incentives, proving or improving cost-effectiveness of the control methods, and education and outreach to growers and other relevant industry sectors. The problem is that there is often a mismatch in economic incentives, in that different sectors bear the brunt of aflatoxin costs at disproportionate ratios for different crops. In corn and cottonseed, growers bear most of the cost; whereas in peanuts and tree nuts, shellers and handlers bear most of the cost. Hence, peanut and tree nut growers may have no economic incentive to apply preharvest aflatoxin control. Postharvest control options are limited and in many cases are not yet approved by Environmental Protection Agency (EPA) or Food and Drug Administration (FDA). The Kaldor-Hicks efficiency criterion (a mathematical predictive model) may help to resolve this economic dilemma. In this project, we examined three case studies of cost-effectiveness to reduce aflatoxin contamination in different crops: AF36 in cottonseed, Bt corn, and Afla-Guard in peanuts. Our three case studies demonstrated how cost-effectiveness of aflatoxin control methods can be evaluated, even in absence of perfect information. Each case we discussed is different in terms of what is known about benefits and costs, and which sector would benefit most from aflatoxin control. Our analysis suggests ways in which to think about, estimate, and communicate cost-effectiveness: as an insurance policy, where to cut costs if possible, how to compare expected benefits and costs, and how benefits and costs apply to specific sectors. For example, applied to aflatoxin control, growers could be compensated by shellers/handlers to adopt preharvest aflatoxin control methods. However, the control methods must be cost-effective for this compensatory arrangement to work. If the benefit exceeds the cost, there is almost always a cost-effective way that the method can be applied, no matter which sector bears the burden of aflatoxin cost. Progress by cooperators was monitored through requiring routine teleconferencing, meetings, and scientific presentations of information relating to the project at professional society meetings, and conferences.
Impacts
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Publications
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Progress 10/01/08 to 09/30/09
Outputs
Progress Report Objectives (from AD-416) To estimate the total economic impacts of aflatoxin to U.S. food industries. Approach (from AD-416) An empirical economic model will be developed, using as inputs numerous cost categories to various stakeholders in the food industry (including consumers). The output will be cost to particular sectors and to particular industries (e.g., pistachio industry). Specifically, the economic impact of aflatoxin content on each commodity will be predicted by using the following categories of losses and gains that will be considered in the model: Market rejection costs of contaminated commodities, export market losses, sampling and testing costs, costs to food processors and consumers, and associated health costs. The model will be implemented in standard software systems (readily used by the cooperating scientist). Additionally, organizational theory will be used for the benefit of food industries in determining the most cost effective strategy for dealing with aflatoxin contamination problems. Specifically, we wish to answer the question: Which aflatoxin reduction/prevention methods and technologies make the most sense for industry to adopt; given costs, expected benefits, organizational design and required training? Organizational change in the corn, cottonseed, peanut, and tree nut industries must occur to accommodate ever-stricter aflatoxin standards. Organizational change typically occurs through "organizational learning" or education, although not all learning and not all changes end up being beneficial to the organization. Options for the above-mentioned industries in terms of newly available aflatoxin-elimination technologies and methods are numerous, which makes the task of choosing which ones to adopt both more hopeful and more difficult. Different behavioral change models will be combined and adapted: ORGAHEAD and the hybrid model of technology adoption. ORGAHEAD is an organizational learning model designed to test how different forms of organizations optimally respond to new information of many types. Significant Activities that Support Special Target Populations Aflatoxin contamination of crops (corn, cotton, peanuts, and treenuts) by the fungus, Aspergillus flavus, has significant economic impact on multiple sectors in U.S. crop industries � growers, elevators, handlers/shellers, processors, distributors, and consumers. Aflatoxin control methods at both preharvest and postharvest levels have been developed by researchers in the USA. Now it is important for the affected sectors to adopt these methods. There are three important factors governing the acceptance of the control strategies: providing economic incentives, proving or improving cost-effectiveness of the control methods, and education and outreach to growers and other relevant industry sectors. The problem is that there is often a mismatch in economic incentives, in that different sectors bear the brunt of aflatoxin costs at disproportionate ratios for different crops. In corn and cottonseed, growers bear most of the cost; whereas, in peanuts and tree nuts, shellers and handlers bear most of the cost. Hence, peanut and tree nut growers may have no economic incentive to apply preharvest aflatoxin control. In this study, we have applied economic theories to three case studies to determine the cost-effectiveness of control strategies (use of biological control agents AF36 in cottonseed and Afla- Guard in peanuts, and Bt corn) to reduce aflatoxin contamination in different crops. Progress by cooperators was monitored through requiring routine teleconferencing, meetings, and scientific presentations of information relating to the project at professional society meetings, conferences and the Annual Aflatoxin Elimination Workshop sponsored by industry stakeholders.
Impacts
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Publications
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Progress 10/01/07 to 09/30/08
Outputs
Progress Report Objectives (from AD-416) To estimate the total economic impacts of aflatoxin to U.S. food industries. Approach (from AD-416) An empirical economic model will be developed, using as inputs numerous cost categories to various stakeholders in the food industry (including consumers). The output will be cost to particular sectors and to particular industries (e.g., pistachio industry). Specifically, the economic impact of aflatoxin content on each commodity will be predicted by using the following categories of losses and gains that will be considered in the model: Market rejection costs of contaminated commodities, export market losses, sampling and testing costs, costs to food processors and consumers, and associated health costs. The model will be implemented in standard software systems (readily used by the cooperating scientist). Additionally, organizational theory will be used for the benefit of food industries in determining the most cost effective strategy for dealing with aflatoxin contamination problems. Specifically, we wish to answer the question: Which aflatoxin reduction/prevention methods and technologies make the most sense for industry to adopt; given costs, expected benefits, organizational design and required training? Organizational change in the corn, cottonseed, peanut, and tree nut industries must occur to accommodate ever-stricter aflatoxin standards. Organizational change typically occurs through "organizational learning" or education, although not all learning and not all changes end up being beneficial to the organization. Options for the above-mentioned industries in terms of newly available aflatoxin-elimination technologies and methods are numerous, which makes the task of choosing which ones to adopt both more hopeful and more difficult. Different behavioral change models will be combined and adapted: ORGAHEAD and the hybrid model of technology adoption. ORGAHEAD is an organizational learning model designed to test how different forms of organizations optimally respond to new information of many types. Significant Activities that Support Special Target Populations Aflatoxin contamination of crops(corn, cotton, peanuts, treenuts) by the fungus Aspergillus flavus has significant economic impact on multiple sectors in U.S. crop industries � growers, elevators, handlers/shellers, processors, distributors, and consumers. Aflatoxin control methods at both preharvest and postharvest levels have been developed by researchers in the USA. Now it is important for the affected sectors to adopt these methods. There are three important factors governing the acceptance of the controls strategies: providing economic incentives, proving or improving cost-effectiveness of the control methods, and education and outreach to growers and other relevant industry sectors. The problem is that there is often a mismatch in economic incentives, in that different sectors bear the brunt of aflatoxin costs at disproportionate ratios for different crops. In corn and cottonseed, growers bear most of the cost; whereas in peanuts and tree nuts, shellers and handlers bear most of the cost. Hence, peanut and tree nut growers may have no economic incentive to apply preharvest aflatoxin control. In this study we have applied economic theories to three case studies to determine the cost- effectiveness of control strategies (use of biological control agents AF36 in cottonseed and Afla-Guard in peanuts, and Bt corn) to reduce aflatoxin contamination in different crops. Progress by cooperators was monitored through requiring routine teleconferencing, meetings, and scientific presentations of information relating to the project at professional society meetings, conferences and the Annual Aflatoxin Elimination Workshop sponsored by industry stakeholders.
Impacts
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Publications
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Progress 10/01/06 to 09/30/07
Outputs
Progress Report Objectives (from AD-416) To estimate the total economic impacts of aflatoxin to U.S. food industries. Approach (from AD-416) An empirical economic model will be developed, using as inputs numerous cost categories to various stakeholders in the food industry (including consumers). The output will be cost to particular sectors and to particular industries (e.g., pistachio industry). Specifically, the economic impact of aflatoxin content on each commodity will be predicted by using the following categories of losses and gains that will be considered in the model: Market rejection costs of contaminated commodities, export market losses, sampling and testing costs, costs to food processors and consumers, and associated health costs. The model will be implemented in standard software systems (readily used by the cooperating scientist). Additionally, organizational theory will be used for the benefit of food industries in determining the most cost effective strategy for dealing with aflatoxin contamination problems. Specifically, we wish to answer the question: Which aflatoxin reduction/prevention methods and technologies make the most sense for industry to adopt; given costs, expected benefits, organizational design and required training? Organizational change in the corn, cottonseed, peanut, and tree nut industries must occur to accommodate ever-stricter aflatoxin standards. Organizational change typically occurs through "organizational learning" or education, although not all learning and not all changes end up being beneficial to the organization. Options for the above-mentioned industries in terms of newly available aflatoxin-elimination technologies and methods are numerous, which makes the task of choosing which ones to adopt both more hopeful and more difficult. Different behavioral change models will be combined and adapted: ORGAHEAD and the hybrid model of technology adoption. ORGAHEAD is an organizational learning model designed to test how different forms of organizations optimally respond to new information of many types. Significant Activities that Support Special Target Populations This report serves to document research conducted under a Specific Cooperative Agreement between the Agricultural Research Service (ARS) and The University of Pittsburg. Additional details of research can be found in the report for the in-house project 6435-42000-019-00D, �Identification and Enhancement of Seed-Based Biochemical Resistance in Crops to Aflatoxin Producing Pathogens.� Contamination of crops such as corn, cottonseed, peanuts, and treenuts by the carcinogenic fungal toxin, aflatoxin, lowers their economic value due to the associated health risk. Previous work to estimate the economic impact of aflatoxin contamination considered only market rejection costs. This work addresses the gaps in previous studies by building a comprehensive economic model to estimate total aflatoxin costs to a food commodity group for five categories of stakeholders: growers, handlers, food and feed processors, distributors, and consumers. Each of these stakeholder groups experiences different forms of economic loss including: product disposal before reaching market, sampling (analytical costs and product lost through testing), market rejection at food- and feed-grade levels, geographic complications, export-related losses, and livestock losses. Inputs vary considerably depending on the commodity (e.g., export-related losses are proportionately larger for tree nuts than for other commodities); thus, calculations are made separately for each commodity group, with sensitivity analyses estimating what total and individual sector costs will be in a �normal� year or a year of severe aflatoxin contamination. Moreover, adjustments can be made for improvements to preharvest or postharvest control measures based on estimates of the economic benefits provided by improved aflatoxin control methods. A case study in corn estimates that the total measurable annual loss to the U.S. corn industry is $192 million. Of this amount, market losses make up $163 million, livestock health losses $4 million, and sampling and testing costs $25 million. In addition, �intangible� economic losses, including the costs of grower disposal of contaminated corn, sampling errors, losses on a geographical basis, and losses associated with aflatoxin concentration in the production of ethanol, increase the average annual loss due to aflatoxin in corn to over $200 million. The benefits of this work are threefold: 1) The model will allow industry to calculate the true economic impact of aflatoxin, which is likely to be several orders of magnitude higher than previously estimated. This information can be used to acquaint policymakers with the true magnitude of the problem. 2) Understanding where the greatest costs are incurred will offer insights into which control strategies are best. 3) This model is also useful for providing institutional memory. Progress by cooperators was monitored through requiring routine teleconferencing, meetings, and scientific presentations of information relating to the project at professional society meetings, conferences and the Annual Aflatoxin Elimination Workshop sponsored by industry stakeholders.
Impacts
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