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Economic study helped determine growers' compensation for vineyard losses

The Issue

Economic study helped determine growers' compensation for vineyard losses
Vineyard in Temecula showing the effects of Pierce's disease
From 1998 to about 2000, more than 40 percent of the Temecula Valley vineyards were removed due Pierce’s disease, which is spread by the glassy-winged sharpshooter. In 2000, the California Department of Food and Agriculture received money from the federal government to provide compensation to growers and alleviate the impact of their losses caused by this disease. In order to process the amount of compensation, both the growers and CDFA required current information on production practices and costs of establishment for winegrape production in the impacted areas.

What Has ANR Done?

An economic study analyzing the costs of establishment and production was developed for wine grapes in Temecula, Riverside County. This study detailed production practices, and estimated and analyzed the capital needed to establish vineyards and produce winegrapes in the area. The study was developed in cooperation with growers using the practices and costs of their vineyard establishment and production.

The Payoff

Temecula winegrape growers received $5.6 million

Winegrape growers in Temecula received $5.6 million in compensation from CDFA for their vineyard losses due to Pierce's disease. The amount of the compensation was determined using the values and analysis presented in the UC economic study. The costs of establishment and production provided both growers and CDFA the detailed cultural practices and economic basis for discussion and determination of a fair compensation. This compensation enabled many of the growers to replant their vineyards and stay in the business of winegrape production. Today, the Temecula wine grape industry has recovered many of its losses and continues to build the economy of the community. In 2005, the industry contributed about $4 million in crop value to the economy. The revival of the industry also restored employment in agriculture and service industries. It enabled the wine industry to stabilize and continue generating income to the community through tourism.

Contact

Etaferahu (Eta) Takele, (951) 683-6491 ext. 221, ettakele@ucanr.edu