Projects Funded for David Zilberman

2019-2020

The Economics of Supply Chains with Application for Animal-free Meats: Impacts on the Economy and the Environment

  • David Zilberman

2018-2019

Methyl Bromide: still around after all these years - A Case Study of Structural Changes in Agriculture

  • David Zilberman

2017-2018

Evolution of Supply Chains to Implement Innovation –The Case of Pre-Packaged Salads

  • David Zilberman

Abstract

Specific Objectives:
1. To expand a conceptual framework for a design of supply chains to include dynamic considerations and diffusion over space and time.
2. To develop a conceptual framework to understand the alternative route that is employed by researchers to produce cultured meats.
3. To develop a conceptual framework to assess the implications of different strategies on design of supply chains for production and distribution of the meat products and for procurement of feedstock.
4. To assess the potential economic and environmental impact of alternative cultured meats on various sectors of agriculture, consumers, as well as the environment. This analysis will be conceptual.
5. To consider how alternative policies may affect the evolution of the industry.
6. To numerically provide orders of magnitude estimates of the impacts under alternative scenarios.

Proposal Narrative: Agrifood systems consist of multiple processes where feedstock (agricultural products) are transformed to final products. Modern agriculture is characterized by new technological innovations that lead to development of new supply chains, that may result in new or modified product or services and specialized trading arrangements – for example, modern livestock processing technologies resulted in transition towards contracting or vertical integration (Zilberman et al. 2017). Du et al. (2016) develop a static conceptual framework to determine the capacity of the supply chain in terms of total output as well as the reliance on vertical integration and contracting under uncertainty. Zilberman et al. (2017) present direction to expansion of the analysis to incorporate multi-processes supply chains and credit considerations. Better understanding of supply chains requires analysis of its dynamic, evolution of investment in processing versus feedstock production, and spread over space and time. The first element of the proposal will provide this expansion, using an optimal control framework that recognizes variation over space and time (see for example Xabadia et al. 2006). We are interested in assessing the conditions that will determine investment in establishment of the original technology versus investment in building the feedstock capacity, and expanding the marketing network over time.
The main effort in this project is to use this framework to understand and to compare the evolution of an alternative approach to produce animal-free meat. There are different approaches to production of these meat products. For example, Memphis Meats Inc. is developing technology to grow meat from self-reproducing animal cells. On the other hand, Impossible Foods is based on patents of formulating plant-derived protein into a meat substitute product based on capacity to convert plant-based materials into a meat-like protein texture. Other companies produce egg white proteins (Clara Foods) and dairy proteins made through fermentation (Perfect Day). Working with Lichun Huang, we identified more than 30 companies working in this space with research support in the hundreds of millions of dollars. Interviews with Pat Brown, from Impossible Foods and others suggest that the basic premise of the industry is that alternative strategies will produce products equivalent to traditional meat products (beefs, poultry, pork, etc.) in terms of taste, texture, and nutritional content in an environmentally sustainable manner. In principle, these products are likely to have higher input use efficiency in converting feedstock to a final product and reduce greenhouse gases (because they wouldn’t require the energy of all the life activities of the animals). However, the diffusion will be gradual and they will result in specific requirements for feedstocks that will be grains, beans, vegetables, spices, etc. Farming, food processing, and cooking will be more integrated. We will develop a report on all the potential avenues of the evolution of the industry and then a conceptual framework to assess some of the implications. Under different assumptions, we will look at the potential supply chains that will be involved, the potential markets, and demand for agricultural feedstock in different locations and different conditions.
In our analysis, we intend to also consider some of the policy issues. Regulations of biotechnology can affect the speed of the evolution of the industry, as well as regulation of climate change. Food safety regulation and animal welfare regulations may play a major role in the future of the industry, as well as a variety of protective measures by different countries with strong livestock sectors. We envision conceptual analysis on some of the major implications that would allow quantification based on the data available from the industry as well as from scientists at UC Davis as well as other locations. But this is a first effort that will attempt to identify alternative scenarios that will be shaped by policies.

Project Relevance: The movement towards cultured meats is in the nexus of modern biotechnology and logistics, and concerns about climate change, food security, and animal welfare. Much of the research and development in this area will be done in California. Once this sector evolves, it will have a significant impact on the California livestock sector. This sector may change the structure of agriculture and the agri-food sector, and it’s important to understand the possible evolutionary path of the structure of agri-business and their implications. Policymakers and the academic community have been challenged to understand and analyze the growing role of contracts and vertical integration in agriculture, and understanding this evolution, especially in the context of culture meat, is important. Identifying some of the positive and negative side effects of cultured meat and assessing policies to address them is another important challenge.

2016-2017

Using Micro Geoengineering for Adaptation to Climate Change in Agriculture

  • David Zilberman

Abstract

Specific Objectives of the Project

1. To develop a conceptual framework for assessing the value of geoengineering techniques, in this case modifying weather on the level of a tree crop, to adapt to the effects of climate change.
2. To apply the use of kaolin clay to enhance the chill portions necessary for adequate bloom out, which ultimately drives yield.
3. Conduct a literature review and interview Farm Advisors to obtain quantitative parameters for current technology practices and allocation of inputs in response to shorter chill portions.
4. To assess the economic benefit of this technology under various climate scenarios in the Central Valley of California.

Summary of Results

Climate change is likely to increase temperatures in California in a manner that will affect crop productivity. Already we have seen increases in winter temperatures that reduce chill factor, which is essential for blooming of fruits and nuts. Insufficient chill can result in drastic impacts on yield. One approach to deal with it is through micro-climate engineering, namely lowering the temperature around the tree during its dormancy before blooming. Farmers and extension developed a technique where they spray orchards with a clay-like substance (kaolin) to reduce solar radiation. This micro-climate engineering technique is estimated to reduce losses.

Our project developed a methodology to predict the impact of this adaptation technique applied to the case of pistachios. One of the challenges is that temperature throughout a season is a random variable and varies over space and location. Working with agronomists, we obtained estimates of the costs and impacts of kaolin application under different scenarios, and then estimated the future expected discounted gains from application of kaolin to pistachios over various time periods. Our analysis takes into account the growth, demand and supply of pistachios, and possible changes in acreage as part of adaptation to climate change.

Our results suggest that in 2030, expected annualized profit gains from micro-climate engineering in California pistachios is between $214 to 612 million, depending on the growth in demand and the extent of adaptation. But consumers gain much more, $643 million to $1.84 billion, through lower prices and increased consumption. These impacts are significant given that the revenue of the industry is between $1 to $2 billion annually. Expected gains are higher if variability is increasing, and the early results suggest that micro-climate engineering may benefit other crops and address other sources of losses as well.

2015-2016

How Did California Respond to the 2012-Present Drought and How Should the California Water System Adapt to Climate Change?

  • David Zilberman
  • Doug Parker

Abstract

Specific Objectives of the Project
Objective 1: Conduct 4 surveys on California institutions and how the drought changed their behavior:
1) A survey at the water district level on sources of water (surface, ground, and purchased), pricing and allocation of water, and water use by farmers in the three years prior to the drought and during the drought;
2) A survey at the county/farm level on farmers’ technology choice and adoption and their changes in practices in response to the drought;
3) A survey obtaining data from the Department of Water Resources (DWR) and the Bureau of Reclamation on allocation of water to different projects and activities;
4) A survey obtaining data from the State on production and earnings of different crops in different counties.

Objective 2: Expand the conceptual framework on optimal management and utilization of water under climate change to interpret possible outcomes of the drought as described below.

Objective 3: Analyze the data to assess how the drought affected crop production and water use patterns within and between sectors, and obtain estimates of the economic impact of the drought.

Objective 4: Using the expanded conceptual framework and the empirical estimates, analyze policy implications for the California water system to adapt to climate change.

Objective 5: Produce an outreach program to disseminate findings.

Project Report/Summary of Results
California agriculture experienced high profits during the drought period, reaching record earnings. The main driver was high output prices and in some cases higher yields, especially in crops irrigated with subsurface drip irrigation (with the drought, weeds couldn’t survive). California farmers adapted to the drought by fallowing close to 1 million acres of land (out of close to 10 million of acres total).

However, the drought was a period of transition where the acreage associated with high value crops increased, while the acreage of lower value crops, like cotton and grains, declined. The high earnings of agricultural production were also associated with water transfers at very high prices (up to $1,000 per acre foot in some regions). Another response to the drought was a significant increase in groundwater use, which have threatened the long-term viability of some groundwater aquifers.

A third mechanism of adaptation was a further increase in use of drip irrigation and other conservation technologies as well as increased reliance on irrigation scheduling and automated and optimized irrigation systems. Forty percent of the agricultural land in California uses drip irrigation and a significant percentage of this use is subsurface drip systems. We estimate that the use of water conservation technologies increases gross and net income of California agriculture by 2.6-7.4%.

Our research suggests that to maintain sustainability of California’s water supply, groundwater use must be regulated based on sound economic and hydrological principles. Further, the use of recycled water can increase supply by up to 3 million acre feet of water, out of a current total use of 44 million acre feet per year. The challenge is to develop a sound conveyance system. In addition, the use of desalination is warranted. Finally, there is much more room to improve water pricing.

2012-2013

Voting for GMOs in California

  • David Zilberman

Abstract

Specific Objectives of the Project
Understanding factors that affect voting for the labeling of pesticides or the banning of pesticides in California.

Project Summary
This project developed a theory explaining consumer choices regarding the labeling of genetically modified (GM) food and applied it to Proposition 37. Proposition 37 originated from an attempt to stall the advances of GM food and biotechnology in the California, drawing on the perception that there is significant public suspicion against the technology and rising awareness and concern about food safety. The initial survey of the public mood in this study suggested that there was potential for proponents of the proposition to succeed. Furthermore, there is a large body of literature in economics and other fields that suggests that some consumers may be willing to pay significant premiums for non-GM food. However, in the end, the proposition failed. Two main issues seemed to carry the outcome of the vote: (1) Flaws in the writing of the proposition created suspicion of its intent. (2) More important, the claim that implementation would raise food prices for Californians by $400/year per household caught people’s attention. To some extent, this was a real experiment on willingness to pay (WTP) to avoid GM. This experiment showed that, among the majority of the populace, the WTP was low. That is, while some perceived objections are widely held, they do not run deep. Once the public realized the cost of restricting GM, they lost enthusiasm, suggesting that increased education on the benefits of GM and, more important, the cost of blocking its use might bear fruit and help to relax the policies that regulate and restrict GM in other markets.

If the public faces a serious trade-off and is exposed to sound argumentation as to why a regulatory requirement is excessive, people will vote against restrictions. This bodes well for the future of GM if its proponents can make a strong case for it, given that California has tended to support environmental causes. For example, California is one of few states that has implemented climate-change policies. Another lesson might be simply that money talks, and large contributions to political causes may sway the public, possibly even against sound policy. But the elections in 2012 demonstrated that large spending does not always guarantee a win.

2011-2012

Assessing the Climate Change Impacts of Agricultural Biotechnology Adoption

  • David Zilberman

2010-2011

Energy Prices and the Financial Crisis: Application to California Land Use

  • David Zilberman

Abstract

The financial crisis originated from a large volume of defaults of real-estate owners. These defaults devastated the financial institutions that owned the mortgages or provided insurance against defaults. But what caused these defaults? While there is a consensus that low interest rates and easy credit fueled the crisis, we argue that the high energy prices ignited it. Using data from California, we show that individuals in communities located farther from employment centers have much higher rates of defaults than those closer to centers and, on average, have low incomes. Thus, the doubling of energy prices during 2005-2008 caused many individuals in commuting com munities to default on mortgages as the housing-price bubble burst and they hit their budgetary constraints.

2009-2010

Assessment of Agriculture's Potential Contributions to California Climate Action

  • David Roland-Holst
  • David Zilberman

Agricultural Biotechnology Across Space and Time: An Analysis of Intensive and Extensive Margin Effect

  • David Zilberman

Abstract

Genetically modified (GM) varieties were introduced in the mid-1990s, mostly for pest control, and have been adopted widely for corn, soybeans, cotton, and canola. Using data on acreage with and without this technology as well as on output at the national level over a period of 20 years in 125 countries, we were able to isolate the impacts of technology, changes over time, and differences in productivity among countries. We have found that the adoption of GM technology has increased the per-acre yield of cotton more than 100 percent in developing countries and by more than 20 percent in developed countries. The per-acre yield of corn increased by 50 percent in developing countries and by 15 percent in developed countries. The acreage of soybeans more than doubled. Thus, GM technologies have contributed significantly to the reduction in food prices and have enabled growing food demands to be met.

2006-2007

Adoption and Potential Precision Farming in California Agriculture

  • David Zilberman

2002-2003

Reexamination of the Economics of Pest Resistance

  • David Zilberman

2001-2002

Adoption of Information Technology in California Agriculture

  • David Zilberman

2000-2001

Adoption of Information Technology in California Agriculture

  • David Just
  • David Zilberman

1999-2000

Animal Waste and Contract Farming

  • David Zilberman

1998-1999

The Economics of Precision Agriculture with Application to California

  • David Sunding
  • David Zilberman