Financial losses due to fumonisin contamination in the Texas High Plains maize.

Fumonisins are one of the main problems affecting maize production in the Texas High Plains (THP), where its agroclimatic conditions make it a perennial hotspot for mycotoxin contamination. In 2017, a fumonisin outbreak in the THP maize motivated stakeholders' request to repeal a subsection of the Texas Administrative Code, §61.61(a)(7) (Fumonisin Rule), and its related Texas Feed Industry Memorandum (Memo 5-20), which previously permitted the blending of maize containing high fumonisin levels with maize containing ≥ 5 mg/kg under state authority, and pivot to FDA fumonisin guidance. Shortly after, the USDA Risk Management Agency (RMA's) reintroduced Discount Factors (DFs) in annual Special Provisions (SP) that outline price reductions related to fumonisin contamination in maize. In this research, we estimate the potential economic burden posed by these changes through a two-part approach. In part one, we construct a decision model that explores the final disposition of fumonisin-contaminated maize based on blending permissions, fumonisin levels, and crop insurance status. In part two, we estimate the economic impact by inserting output values of the decision model into financial equations that consider testing costs, transportation fees, and discounts from crop insurance and grain elevators when applicable. Our economic analysis projects that the financial losses during a THP crop year with high fumonisin levels could range from $15.1 to $135.5 million without the option to blend under conditions of the revised RMA discount schedule. Findings further highlight crop insurance as the most promising risk management strategy for farmers in areas susceptible to fumonisin contamination.

Economic benefit of co-regulation to manage aflatoxin risk in maize.

Aflatoxins are toxic fungal metabolites that occur naturally in the field among cereals, oilseeds, and nuts that may increase during storage. Texas grown maize, commonly referred as corn, has some of the highest aflatoxin levels in the US. In 2011, the Office of the Texas State Chemist (OTSC) collaborated with the Risk Management Agency (RMA) of the United States Department of Agriculture (USDA) and the Texas grain industry to implement the state's first co-regulation governance option to manage aflatoxin risk. Co-regulation is a form of risk management that relies upon a government-private partnership in regulation; utilizing government-backed codes of practice that result in a more connected and transparent marketplace. To measure the economic benefit of co-regulation to manage aflatoxin risk, interviews were conducted among twenty-seven participants in the OTSC aflatoxin co-regulation program who represented 31% of the grain companies that handled maize contaminated by aflatoxin according to Texas Commercial Feed Rules. A comparative approach was used by gathering evidence from 2010 to 2018, in order to evaluate the results before and after the OTSC implemented its co-regulation strategy. The results were evaluated by using the data gathered from the interviews to measure the specific costs and benefits incurred by producers and grain handlers. The findings were modeled in the form of an income statement. From the income statement, the total economic benefit of the One Sample Strategy in 2018 was $14,572,180. This study provides a more realistic characterization of cost drivers associated with aflatoxin risk management and counters exaggerated economic losses associated with aflatoxin in maize from prior studies.

Evaluation of Coregulation as a Governance Option To Manage Aflatoxin Risk in Texas Maize.

Coregulation as a form of risk management relies upon a government-private partnership in regulation using government-backed codes of practice or action plans. In Texas, implementation of coregulation to manage aflatoxin risk has been practiced since 2011 and operates under the program title One Sample Strategy (OSS). Aflatoxin-contaminated cereals and oilseeds that contain greater than 20 µg/kg of the toxin (B1, B2, G1, and G2) are adulterated as defined by the Texas Commercial Feed Rules and regulated by the Texas Feed and Fertilizer Control Service of the Office of the Texas State Chemist. The present study was intended to evaluate the implementation and effectiveness of the coregulation program for 3 years based on selected evaluation criteria aiming to improve aflatoxin risk management and thus reduce market and food safety risk in Texas. In 2013, 124 analysts qualified to participate in the program at 23 grain elevators. During the 2013 harvest, use of control samples to ensure testing accuracy revealed that the average relative standard deviation among all participants was 14.5%. In 2014 and 2015, 129 and 151 analysts, respectively, qualified to measure aflatoxin, and the average relative standard deviation values for the working control across the 29 and 30 participating firms were 16.2 and 13.7%, respectively. All firms demonstrated the capability to grind maize to the OSS-prescribed particle size (70% passing through a 20-mesh sieve) in all 3 years. The Texas Feed and Fertilizer Control Service verified testing accuracy of OSS participants analyzing 612, 693, and 482 retained samples in 2013, 2014, and 2015, respectively. Results were plotted in an operating curve to depict type I and type II errors. The implementation of the OSS built upon a quality system-based code of practice successfully managed aflatoxin risk in Texas by using coregulation as a governance option.