Barley is economically important to North Dakota agriculture. These two reference methods are generally not used by commercial testing facilities and grain dealers because they are more costly, time-consuming, and complex to operate. North Dakota Barley Farmers Have Experienced Large Revenue, Yield, and Acreage Losses Because of Scab and Vomitoxin

From 1993 through 1997, we estimate that North Dakota barley farmers suffered cumulative revenue losses from scab and vomitoxin of about $200 million (in 1997 dollars) —equal to almost 17 percent of the $1.2 billion in total barley revenues farmers received during this period.The losses from these diseases varied significantly, both over the years and across the regions of the state, with the Red River Valley suffering the greatest losses. U.S. maltsters and brewers, the traditional buyers of North Dakota’s malting barley, have reacted to scab and vomitoxin by expanding their imports of malting barley from Canada by about 380 percent. Veratox Test Results Have Increased Variabilty at Levels Critical to Pricing Decisions

According to testing experts, while the Veratox test kit serves the market’s need for a relatively fast and cost-effective method for measuring vomitoxin in barley, it can produce test results that vary, particularly at concentrations critical to pricing decisions. Finally, testing experts said that the training of the technicians who conduct the tests is critical for obtaining optimal test results. Neogen, the Veratox kit’s manufacturer, also provides training to new customers. While these reference methods have less variability than Veratox, they are not practical for use at commercial testing facilities and grain elevators for several reasons, according to experts we spoke with. Under Conditions of Light Infestation, Short- and Longer-Term Actions May Reduce the Impact of Scab and Vomitoxin

In barley, scab, and the vomitoxin resulting from scab, can be reduced somewhat through the use of fungicides and certain farming practices, such as crop rotation and deeper tillage of the soil. However, even if rotation initially helps reduce scab levels, infestation could occur from airborne spores from other locations. Thus, they believe that these short-term actions will be effective only in years of light infestation. However, these experts state that a more resistant barley variety will not completely eliminate the incidence of scab and vomitoxin, particularly during periods of moderate or severe infestation. Scope and Methodology

You asked us to (1) determine the financial impact of scab and vomitoxin on North Dakota barley farmers, (2) assess the performance of vomitoxin test methods, and (3) identify short- and long-term actions that could help reduce the impact of scab and vomitoxin on North Dakota barley farmers. Estimation of Revenue Losses to North Dakota Barley Farmers as a Result of Scab and Vomitoxin

This appendix explains the methods and data we used to estimate the revenue losses for North Dakota barley as a result of the scab and vomitoxin epidemic for 1993 through 1997.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the effect of scab and vomitoxin on North Dakota barley crops, focusing on: (1) the financial impact from scab and vomitoxin on barley farmers; (2) the performance of vomitoxin test methods; and (3) short- and long-term actions that could help reduce the impact of scab and vomitoxin on North Dakota barley farmers.

What GAO Found

GAO noted that: (1) North Dakota barley farmers have experienced extensive revenue losses from scab and vomitoxin damage; (2) from 1993 through 1997, these farmers suffered estimated cumulative losses of about $200 million from scab and vomitoxin--equal to about 17 percent of the $1.2 billion in total barley revenues they received during this period; (3) while most of the revenue losses resulted from decreases in barley production, losses also resulted from severe price discounts; (4) maltsters and brewers, the traditional buyers of North Dakota's malting barley, have reacted to the scab and vomitoxin damage by purchasing less barley from North Dakota farmers and more from Canadian and other western U.S. sources; (5) three tests are generally used to measure vomitoxin concentrations in barley produced in North Dakota; (6) one is a field kit, called Veratox, which is commonly used by grain elevators and commercial testing facilities and is the test that most directly affects the prices farmers receive for their barley; (7) the Veratox test can produce results that vary at concentrations critical to pricing decisions; (8) testing experts attribute variations in test results to several sources, including the skill of the technician conducting the test; (9) they stress the importance of quality assurance measures and training to help reduce this variation; (10) the other two tests--high-pressure liquid chromatography and gas chromatography--are reference methods that are used primarily in research laboratories for such purposes as checking the performance of the Veratox kit; (11) according to analytical chemists and other testing experts, these tests provide accurate and consistent test results; (12) however, because of the complexity and the cost of the equipment for these two tests, they are not practical for use at commercial testing facilities and other locations that serve barley farmers; (13) short-term actions, such as rotating crops and spraying with fungicides, may help reduce scab and vomitoxin's impact under conditions of light infestation; (14) however, according to North Dakota agriculture experts, the benefits of these actions are negligible during periods of moderate to severe infestation; (15) from 1993 through 1997, several counties in the Red River Valley of North Dakota experienced moderate or severe scab and vomitoxin infestation; and (16) the longer-term action of developing more scab-resistant barley may also help reduce the disease's impact under conditions of light infestation.