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United States Department of Agriculture

Agricultural Research Service

Related Topics

Research Project: Total Economic Impact of Aflatoxin: Models of Economic Loss and Industry Learning

Location: Food and Feed Safety Research

2013 Annual Report


1a.Objectives (from AD-416):
To estimate the total economic impacts of aflatoxin to U.S. food industries.


1b.Approach (from AD-416):
An empirical economic model will be developed, using as inputs numerous cost categories to varius stakeholders in the 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.


3.Progress Report:

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 (containing an insect-controlling gene), 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. As a part of this cooperative research agreement, 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 U.S. dollars annually, with the U.S., 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 U.S. was estimated at $23 million annually. We had also 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. More recently, we have made a great deal of progress in developing economic models of world food trade and showing the crucial role of U.S. maize and pistachio industries in global trade of these foodstuffs. The U.S. is by far the largest producer and exporter of maize worldwide, and the second-largest producer and exporter of pistachios worldwide. We show in network models that maize trade tends to organize itself in three clusters of nations, with U.S. maize exports playing a central role in the maize supply of multiple North American, Latin American, and Middle Eastern nations. If anything occurred to jeopardize U.S. maize exports, many other nations would be adversely affected. Moreover, we found that nations tend to trade more food with each other if their aflatoxin regulations are identical or nearly identical. This is true of both maize and pistachio trade.


Last Modified: 9/10/2014
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