U.S. Agriculture

Barley has traditionally been a major source of farm income in North Dakota, second only to wheat in total acreage planted and crop income. Since 1993, however, substantial portions of North Dakota's barley crop have been damaged by a fungal disease--known as scab--that often produces a toxin called vomitoxin. Scab causes barley kernels to discolor and shrivel, forcing farmers to sell fewer bushels at lower prices. Barley contaminated with vomitoxin can result in a beer that produces too much foam. The scab and vomitoxin epidemic has reduced the amount of barley produced and sold in North Dakota and the prices paid for barley. GAO looked into (1) the financial impact from scab and vomitoxin on these farmers, (2) the performance of vomitoxin test methods, and (3) the short-term and long-term actions that could help reduce the impact of scab and vomitoxin on North Dakota barley farmers. From 1993 to 1997, these farmers lost about $200 million from scab and vomitoxin. Maltsters and brewers, the traditional purchasers of North Dakota's malting barley, are buying less barley from North Dakota farmers and more from Canadian and other western U.S. sources.

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.