81
1 STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
2
SUGAR CANE GROWERS COOPERATIVE OF)
3 FLORIDA, INC., ROTH FARMS, INC., )
and WEDGWORTH FARMS, INC., )
4 )
and )
5 )
FLORIDA SUGAR CANE LEAGUE, INC., )
6 UNITED STATES SUGAR CORPORATION )
and NEW HOPE SOUTH, INC., )
7 )
and )
8 )
FLORIDA FRUIT AND VEGETABLE )
9 ASSOCIATION, LEWIS POPE FARMS )
W.E. SCHLECHTER & SONS, INC., and)
10 HUNDLEY FARMS, INC., )
)
11 Petitioners, )
)
12 v. )
)
13 SOUTH FLORIDA WATER MANAGEMENT )
DISTRICT, )
14 )
Respondent, )
15 )
and )
16 )
MICCOSUKEE TRIBE OF INDIANS OF )
17 FLORIDA, the UNITED STATES OF )
AMERICA, FLORIDA DEPARTMENT )
18 OF ENVIRONMENTAL REGULATION, and )
FLORIDA WILDLIFE FEDERATION, )
19 )
Intervenors. )
20
21 ----------------------------------------------------
ORAL DEPOSITION OF RONALD D. LACEWELL, Ph.D.
22 VOLUME II
TAKEN ON MARCH 2, 1993
23 ----------------------------------------------------
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
82
1 A P P E A R A N C E S:
2 MS. DONNA H. STINSON
Hopping, Boyd, Green & Sams
3 123 South Calhoun Street
P. O. Box 6526
4 Tallahasee, Florida 32301
5 COUNSEL FOR SUGAR CANE GROWERS
COOPERATIVE OF FLORIDA, ET AL.
6
7
8 MR. RICK J. BURGESS
Peeples, Earl & Blank
9 One Biscayne Tower
Suite 3636
10 Two South Biscayne Boulevard
Miami, Florida 33131
11
COUNSEL FOR FLORIDA SUGAR CANE
12 LEAGUE, INC.
13
14 MR. KEITH E. SAXE
United States Department of Justice
15 Environmental & Natural Resources Division
General Litigation Section
16 601 Pennsylvania Avenue NW
Room 879
17 Washington, D.C. 20004
18 COUNSEL FOR UNITED STATES OF AMERICA
19
20
ALSO PRESENT: LONNIE L. JONES, Ph.D
21
TEOFILO OZUNA, Ph.D.
22
23
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
83
1 T A B L E O F C O N T E N T S
2 PAGE
3 AGREEMENTS OF COUNSEL. . . . . . . . . . . . . 85
4 EXAMINATION OF RONALD D. LACEWELL, Ph.D., VOLUME II
5 BY MS. STINSON . . . . . . . . . . . . . . 88
6 BY MR. BURGESS . . . . . . . . . . . . . . 129
7 BY MR. SAXE . . . . . . . . . . . . . . . 288
8 RE-EXAMINATION
9 BY MS. STINSON . . . . . . . . . . . . . . 173
10 BY MR. BURGESS . . . . . . . . . . . . . . 229
11 WITNESS' SIGNATURE PAGE. . . . . . . . . . . . 290
12 CORRECTION SHEET . . . . . . . . . . . . . . . 291
13 REPORTER'S CERTIFICATE . . . . . . . . . . . . 293
14
15
16
17
18
19
20
21
22
23
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
84
1 E X H I B I T S
2 NO. DESCRIPTION PAGE
3 1 Memorandum to G. Johns from R. Lacewell
dtd 5/21/92 . . . . . . . . . . . . . . 36
4
5 2 Memorandum to G. Johns from R. Lacewell,
L. Jones and T. Ozuna dtd 6/3/92 . . . . 37
6
3 Letter to G. Johns from Peterson Consulting
7 dtd 7/31/92 . . . . . . . . . . . . . . 47
8 4 Handwritten Notes - 20-Year Analysis . . 59
9 5 Handwritten Notes . . . . . . . . . . . 70
10 6 Memorandum to K. Saxe from L. Jones
dtd 10/23/92 . . . . . . . . . . . . . . 90
11
7 Memorandum to K. Saxe from L. Jones and
12 R. Lacewell dtd 8/28/92 . . . . . . . . 91
13 8 Memorandum to K. Saxe from L. Jones
dtd 8/4/92 . . . . . . . . . . . . . . . 102
14
8-A Memorandum to K. Saxe from L. Jones. . .
15
9 Handwritten Notes to S. Ponzoli . . . . 112
16
10 Fax to S. Ponzoli dtd 1/22/93 . . . . . 112
17
11 Florida Sugar Cane League Summary of
18 Hazen & Sawyer's Potential Economic
Impacts Analysis . . . . . . . . . . . . 164
19
12 Economic Effects of the SWIM Plan on
20 Sugarcane Production in the Everglades
Agricultural Area of Florida . . . . . . 174
21
13 Memorandum to K. Saxe from R. Lacewell
22 dtd 6/16/92. . . . . . . . . . . . . . . 284
23 14 Letter to R. Rosenberg from I. Hirschhorn
dtd 5/21/92 . . . . . . . . . . . . . .
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
85
1 E X H I B I T S
2 NO. DESCRIPTION PAGE
3 15 Florida Sugar Cane League Summary of
Hazen & Sawyer's Potential . . . . . . .
4
16 Notes . . . . . . . . . . . . . . . . .
5
17 Letter to G. Johns from L. Jones . . . .
6
18 Agricultural Property Tax Assessment in
7 the EAA . . . . . . . . . . . . . . . .
8 19 Review of World Price Situation. . . . .
9 20 Review of World Price Situation. . . . .
10 21 Letter to G. Johns to Peterson Consulting
dtd 7/31/92 . . . . . . . . . . . . . .
11
22 Debt . . . . . . . . . . . . . . . . . .
12
23 The Validity of Benefits Transfers:
13 The Case of the Florida Everglades . . .
14 24 Issues Related to the Profitability of
Farming in the EAA Draft 6/15/92. . . . .
15
25 Memorandum to K. Saxe from T. Ozuna
16 dtd 7/30/92 . . . . . . . . . . . . . . .
17
18
19
20
21
22
23
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
86
1 A G R E E M E N T S
2 DEPOSITION AND ANSWERS of RONALD D. LACEWELL,
3 Ph.D., VOLUME II, who resides in Bryan, Brazos
4 County, Texas, taken herein by Counsel for
5 PETITIONERS, before Lori A. Belvin, a Certified
6 Shorthand Reporter and Notary Public in and for the
7 State of Texas, on March 2, 1993, between the hours
8 of 8:30 A.M. to 5:30 P.M. at the Hilton Hotel, Board
9 Room, located at 801 University Drive East, College
10 Station, Brazos County, Texas, pursuant to NOTICE
11 and the following stipulations and agreements:
12 IT WAS AGREED by and between counsel for the
13 Petitioners and Respondent, in the above-numbered
14 and styled cause, that all formalities specifically
15 waived and that the oral deposition of
16 RONALD D. LACEWELL, Ph.D., VOLUME II, may be taken
17 herein forthwith before Lori A. Belvin, a Certified
18 Shorthand Reporter and Notary Public in and for the
19 State of Texas, said deposition being taken with the
20 same force and effect as though all the requirements
21 of the statutes and rules had been fully complied
22 with.
23 IT WAS FURTHER AGREED that no objections need be
24 made by any party at the time of taking said
25 deposition, except objections as to the form of the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
87
1 question or the responsiveness of the answer, which
2 if not made during the deposition are waived; but if
3 and when said deposition, or any portion thereof, is
4 offered in evidence on the trial of this cause by
5 any party hereto, it shall be subject to any and all
6 other legal objections, such objections to be made
7 at the time of the tender, the same as though the
8 witness were on the stand personally testifying.
9 IT WAS FURTHER AGREED that the witness shall
10 sign the deposition transcript before any notary
11 public or official authorized to administer oaths;
12 and, at such time, the witness has the privilege of
13 reading over said transcript and making any
14 corrections that he finds to be necessary such
15 corrections to be made in accordance with the Rules
16 of Civil Procedure.
17 IT WAS FURTHER AGREED that in the event the
18 original deposition transcript is not signed by the
19 witness within 20 days of receipt and filed at the
20 time of trial or any hearing, that the original or a
21 certified copy of said transcript may be filed in
22 court and used herein as though the witness had
23 signed said original transcript.
24 IT WAS FURTHER AGREED that after said deposition
25 transcript has been returned to the deposition
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
88
1 officer along with changes, if any, made by the
2 witness in accordance with the Rules of Civil
3 Procedure, that the original deposition transcript,
4 together with copies of all exhibits, will be
5 delivered to MS. DONNA H. STINSON for safekeeping
6 and use in trial.
7 IT WAS FURTHER AGREED that after said deposition
8 transcript has been returned to counsel in
9 accordance with these stipulations and agreements,
10 it will be treated by the parties hereto and may be
11 used herein with the same force and effect as though
12 all statutes and rules relating to the taking and
13 returning into court of depositions had been fully
14 complied with.
15 * * * * *
16
17
18
19
20
21
22
23
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
89
1 P R O C E E D I N G S
2 * * *
3 THE REPORTER: Ladies and gentlemen,
4 we're back on the record.
5 MR. SAXE: We are observing today
6 Professor Lonnie Jones and
7 Teofilo Ozuna.
8 * * *
9 RONALD D. LACEWELL, Ph.D.,
10 having been first duly cautioned and sworn upon
11 his oath to tell the truth, the whole truth
12 and nothing but the truth, testified as follows,
13 to wit:
14 * * *
15 E X A M I N A T I O N
16 * * *
17 BY MS. STINSON:
18 Q. Good morning.
19 A. There was a couple of other things that I
20 remembered during the night on your question about
21 different things that I have worked on.
22 Q. Okay.
23 A. This still may not be inclusive, but let me
24 get it on the record that one is a contract of the
25 United States Department of Agriculture, Agriculture
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
90
1 Research Service, in the lower Rio Grande Valley to
2 look at economic implications of alternative farming
3 systems. So I have an employee that's in the Valley
4 doing that work.
5 And another legal activity that I had
6 forgotten about was being retained by Chevron Oil
7 relative to a class-action suit brought on by
8 farmers in New Mexico where the farmers were
9 claiming price-fixing on natural gas, which is used
10 for irrigation.
11 So my objective with Chevron was to look at
12 what the economic impact was on the farmers because
13 they paid a price differential and how that
14 reflected back.
15 Q. Did you testify in that case?
16 A. That was settled out of court. No, I did
17 not. I was thinking about the question that was
18 asked relative to impacts analysis, and let me just
19 clarify on that one.
20 My mind was relative to indirect and
21 induced impacts, and what I do work on is direct
22 impacts. I do have expertise in the area of
23 quantifying direct impacts, which then is used to
24 do, what was in my mind, the indirect induced.
25 Q. Define for me the "direct impacts" that you
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
91
1 do.
2 A. Direct impacts would be change in sales by
3 target industry.
4 Q. Relate that to the sugar industry in this
5 instance.
6 A. In this case what it would be would be what
7 would be the change in gross revenues to agriculture
8 in the EAA.
9 Q. But you would not consider yourself an
10 expert in extrapolating from there to lost jobs and
11 that sort of thing?
12 A. Not an expert. I have worked with
13 Dr. Jones on that, and then I rely upon his
14 expertise at that point.
15 MS. STINSON: Mark this
16 (WHEREUPON, Exhibit No. 6
17 was marked for identification.)
18 Q. (By Ms. Stinson) I show you a document
19 that's marked as Exhibit 6 and ask you to identify
20 it.
21 A. This is a fax that Dr. Lonnie Jones sent to
22 Mr. Keith Saxe on 10/23/92, and the subject of the
23 fax relates to Dr. Jones' analysis of some work that
24 Dr. Polopolus did on estimating secondary impacts.
25 Q. Is that your work or Dr. Jones' work?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
92
1 A. It's Dr. Jones' work.
2 Q. Did you help prepare it?
3 A. I visited with Dr. Jones about it. I
4 didn't make the calculations, but I looked over the
5 work and reacted to it; but it's basically
6 Dr. Jones' work.
7 Q. The table that's on the last page, was that
8 also something that Dr. Jones did?
9 A. Dr. Jones generated this table from work
10 that was in the Hazen & Sawyer Report, and that was
11 recorded by Dr. Polopolus.
12 Q. But he prepared the table?
13 A. Yes.
14 MS. STINSON: Mark this document.
15 (WHEREUPON, Exhibit No. 7
16 was marked for identification.)
17 Q. (By Ms. Stinson) No. 7?
18 A. Okay. This is a communication with
19 Mr. Keith Saxe again from Dr. Jones and myself, and
20 it is a review of comments by Ronald T. Luke
21 regarding, "The Hazen & Sawyer Draft Final Reports
22 on Economic Impact Evaluation of Economic Benefits
23 of the Everglades." The date is August.
24 Q. Did you participate and develop that
25 document?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
93
1 A. I interacted with Dr. Jones on this.
2 Q. Let me ask you some specific questions
3 about it. Point 1 -- and just read it to yourself
4 first, and then I'll ask you a question about it.
5 A. Is there a way we can come up with this --
6 Is that what you're going to do?
7 (WHEREUPON, there was discussion
8 off the record.)
9 A. Okay. I have read the first part.
10 Q. (By Ms. Stinson) Okay. Would you explain
11 to me the comment, "This is preferable to performing
12 economic analysis on other unknown or hypothetical
13 assumptions relating to nutrient discharge levels,"
14 et cetera.
15 A. Let me read it again. As I recall the
16 criticism here, was that there was not an evaluation
17 of the biological and hydrologic viability of the
18 STA's. And the comment here is that the biological
19 and hydrologic viability of STA's is not a valid
20 criticism of the economic procedures that were
21 carried out by Hazen & Sawyer.
22 Q. Okay.
23 A. So they're bringing up criticisms because
24 Hazen & Sawyer didn't do biological and hydrologic
25 analysis, and they weren't asked to do biological
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
94
1 and hydrologic analysis. They were asked to do an
2 economic study. So that's not a criticism of the
3 economic study.
4 Q. Okay.
5 MR. SAXE: Counsel -- excuse me -- do
6 you have the underlying document to
7 which this document refers, the Luke
8 transmission of criticisms concerning
9 the Hazen & Sawyer report?
10 MS. STINSON: It's in my luggage.
11 MR. SAXE: Because this document
12 and a number of others refer to
13 documents, and the witness is without
14 the benefit of the base document to
15 which these refer. So if you have
16 those, it will be a lot --
17 MS. STINSON: Off the record.
18 (WHEREUPON, there was discussion
19 off the record.)
20 Q. (By Ms. Stinson) I'm handing you a copy of
21 the report that you're analyzing in Exhibit 7. It's
22 actually the second sentence of Point 1 that begins,
23 "this is preferable to," that I'd like you to
24 explain. I'm not sure what's preferable to what.
25 A. Well, Luke, in his letter relative to the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
95
1 criticisms of the Hazen & Sawyer report, for this
2 particular point have indicated that there was
3 "Failure to address unknowns and uncertainties."
4 He describes several possible unknowns.
5 That means that you would need a different size STA
6 or different type STA or things like that.
7 His comment says that, basically, there are
8 infinite alternatives that exist but there is one
9 plan that has been developed and that Hazen & Sawyer
10 took the right approach to analyze this economic
11 impact under that plan and stick to some basic
12 knowledge rather than drifting off into unknowns.
13 Q. I might as well keep that in front of me.
14 Okay.
15 Let me ask you about Point 4 on your
16 Document 7 here. Just take a look at it, and then
17 let me ask you.
18 A. (Witness complies.) Point 4 relates to a
19 comment by Dr. Jones and I on "short study period,"
20 and I've got to see what Dr. Luke said about that.
21 Q. Point 4, not 5.
22 A. I'm sorry. "Jurisdiction, specific
23 impacts." This particular point by Dr. Luke relates
24 to Hazen & Sawyer not doing a study of individual
25 towns, school districts, and other jurisdiction
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
96
1 specific projections in the field of socio-economic
2 impact.
3 And the comment that we have here relative
4 to Luke's comment is that Hazen & Sawyer is not
5 asked to do the socio-economic analysis. They did
6 what was asked for in their report and their
7 contract.
8 Q. You have the comment, "I notice they left
9 out those done in Texas. Oh, well."
10 What studies are you aware of that were
11 left out of the Luke citations?
12 A. That exact wording is not mine.
13 Q. I should ask Dr. Jones about that?
14 A. Yes.
15 Q. On the jurisdiction, would you agree,
16 however, that the primary impacts will be within the
17 EAA not within other parts of Palm Beach County of
18 the proposed SWIM plan projects?
19 A. That's a broad question and requires first
20 an accurate estimate of what the direct impacts are
21 before you can go to the indirect impacts.
22 So I would say that if there are any
23 significant impacts, that probably they would be in
24 the EAA.
25 Q. And Point 5 you make the comment that, "The
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
97
1 implementation of the $100 assessment on agriculture
2 probably would not significantly affect the bond
3 rating of SFWMD."
4 Do you have any expertise in bond issuance?
5 A. No, I don't have expertise in bond
6 issuance.
7 Q. Do you still believe that to be a true
8 statement?
9 A. Yes.
10 Q. By that statement, are you giving me an
11 opinion that a bond could be issued based on a $100
12 assessment on agriculture in the EAA?
13 A. The basis of the statement is that the
14 property values in the EAA comprise less than
15 1 percent of property values in the
16 Palm Beach County area.
17 Q. So you're talking about a bond that would
18 be based on some kind of ad valorem taxation of the
19 whole county?
20 A. Well, I'm talking about what might happen
21 to bond ratings of the South Florida Water
22 Management District; and the specifics of how a bond
23 is put together, I don't know at this point in
24 time.
25 Q. Are you aware of any work the Water
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
98
1 Management District has done or has had done
2 regarding the bond debility of certain assessments?
3 A. No, I'm not aware of specifics.
4 Q. No. 8, "Litigation Analysis."
5 A. This point in the comments by Luke are
6 titled, "Inadequate Mitigation Analysis."
7 He indicates that the Hazen & Sawyer Report
8 has taken measures and a step in the right direction
9 relative to displacing the workers and other
10 mitigation measures, but suggests more work is
11 needed.
12 Some of the things he suggests is, what is
13 the age distribution of those affected, education
14 level, et cetera, and what are some programs that
15 could help assist the different demographics of the
16 people affected.
17 Our comment, relative to that, is that that
18 was not a complete and total detailed analysis in
19 Hazen & Sawyer; but that they -- our impression was
20 in the contract, they weren't asked to do anything
21 along these lines.
22 As we looked at that and based on the
23 information for the Palm Beach economy, relative to
24 the EAA, it is a robust economy. There are jobs
25 being added every year and the nonagriculture part
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
99
1 of that economy is growing each year. So the
2 percent coming from agriculture is declining.
3 Q. Let me ask you on that: What analysis have
4 you done of Palm Beach County, specifically?
5 A. In this case, I was relying upon some work
6 that Dr. Jones had looked at relative to the total
7 economic activity for the county.
8 (WHEREUPON, there was discussion
9 off the record.)
10 Q. (By Ms. Stinson) Are you telling me that I
11 should ask Dr. Jones about the analysis of
12 Palm Beach County?
13 A. You should ask him about the economic
14 activity of the county, yeah.
15 Q. When it says, "I have done enough
16 analysis," that's Dr. Jones?
17 A. Yes.
18 Q. No. 9, you indicated, "They are trying to
19 link SWIM costs to Everglades benefits savings or
20 enhancement as if this were a B/C analysis. It is
21 not. They may or may not know the significance of
22 the difference."
23 Tell me what the difference is between what
24 was done by Hazen & Sawyer. And I take it "BC" is
25 "benefit cost."
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
100
1 A. Yes.
2 Q. Is that correct?
3 A. That's true.
4 Q. What do you mean by that statement?
5 A. Primarily for the Endangered Species Act
6 and for this settlement of the Everglades
7 agriculture area, it doesn't indicate that economics
8 are a significant factor and that you have to do a
9 national benefit cost analysis. Hazen & Sawyer --
10 Q. Let me stop you there. What doesn't? You
11 said "it doesn't" --
12 A. The SWIM plan, the settlement agreement.
13 Q. Does not require --
14 A. -- a B/C ratio.
15 Q. So what is the difference between what is
16 being done or what has been done in a B/C analysis?
17 A. What the board asked for was an estimate of
18 the economic impacts from implementation of the SWIM
19 plan. That is all they asked for basically on that
20 first contract, and that doesn't constitute a
21 benefit cost analysis. It just constitutes what
22 would be expected of economic impacts of
23 implementation of the SWIM plan.
24 Q. There was an analysis done of the benefits
25 of the plan as well; is that correct?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
101
1 A. I would be hard-pressed to say there was an
2 analysis of all the benefits of the plan, but there
3 was a part of the contract that asked for an
4 analysis of other reports that had been done that
5 looked at a similar type issue to see if there was a
6 way to transfer those results back to estimate what
7 the value of the Everglades was.
8 Q. Would you agree, then, that there wasn't,
9 in fact, a thorough analysis done of the benefits of
10 the SWIM plan?
11 A. There was not a separate analysis done.
12 There was an analysis done of other literature that
13 used techniques that you would need to use for
14 primary data-type analysis of the Everglades, but to
15 use other information to relate to the Everglades is
16 probably pretty good.
17 Q. "Probably pretty good," is that what you
18 said?
19 A. Yeah. I'm not an expert relative to
20 nonmarket valuation of transferability of nonmarket
21 valuation studies.
22 Q. You anticipated my next question.
23 Point 10 says, "The experts who selected
24 the analogous studies are more expert than Luke or
25 Liestritz."
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
102
1 You would agree that you, also, are not an
2 expert in that area?
3 A. Yes, I would agree.
4 Q. Yesterday we spoke some about the work done
5 by Craig Diamond. Are you familiar with the report
6 done by Mr. Diamond?
7 A. Is that the Wilderness report?
8 Q. Yes.
9 A. Okay. Yes.
10 Q. You have reviewed that report?
11 A. I read that report.
12 MR. SAXE: Counsel, one moment. There
13 was -- if I recall the testimony
14 yesterday, it wasn't established that
15 the Diamond report and the Wilderness
16 report that Professor Lacewell
17 indicated he'd read were one in the
18 same.
19 Q. (By Ms. Stinson) Let me just ask you to
20 assume that they are one in the same, I think.
21 A. Okay.
22 Q. If we had it here, we could demonstrate
23 that. In your opinion, is that report a fair and
24 unbiased analysis of the economic situation
25 involving the sugar industry?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
103
1 A. I believe that they did use credible
2 economic procedures and that the estimates are
3 reasonable estimates of the situation in the EAA and
4 sugar in the South Florida Flood Control Project,
5 yes.
6 Q. Would you not agree that that report is
7 more in the nature of an attempt to persuade than an
8 unbiased analysis?
9 A. I haven't read it in a long time, so I
10 would not have an opinion relative to that.
11 Q. Okay.
12 MS. STINSON: Let's have this marked.
13 (WHEREUPON, Exhibit No. 8
14 was marked for identification.)
15 Q. (By Ms. Stinson) Would you identify what's
16 been marked as Exhibit 8, please.
17 A. This is a communication between Dr. Jones
18 and Mr. Keith Saxe; and the title of this one is,
19 "Florida Sugarcane, Evidence of a Heavily Subsidized
20 Industry."
21 Q. Did you participate in that work?
22 A. I read that as he was working on it, yeah.
23 Q. There's a comment that, "The Florida sugar
24 industry has expanded its acreage and production
25 since 1960 in the face of a declining national
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
104
1 market for its product."
2 Does the production exceed the national
3 market? Does U.S. production exceed the U.S.
4 market?
5 A. There's more sugar consumed in the
6 United States than is produced in the United States.
7 Q. Would you agree or disagree that the world
8 price is artificially low due to other countries'
9 market practices?
10 A. I haven't studied that enough to have an
11 opinion that it's artificially low.
12 Q. There's a comment that, "The very existence
13 of the Florida sugar industry is dependent upon
14 price supports in come cities."
15 Do you agree with that statement?
16 A. I don't entirely agree with that particular
17 statement. My anticipation is there would be sugar
18 production in the EAA without subsidies.
19 Q. Would you agree that there are other
20 agriculture crops, also, that are dependent upon
21 price supports and subsidies?
22 A. This is a longer-type response. There are
23 other crops that are covered by target prices and
24 support prices in a completely different type
25 program than sugar.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
105
1 There are some recent studies that were
2 done from Auburn in conjunction with Texas A & M
3 that was given at a seminar in Washington. And the
4 analysis indicated that they were going to take the
5 target price away from the commodity crops in the
6 United States, which would be crops like, wheat,
7 cotton, corn, et cetera.
8 As it turned out, when these subsidies were
9 removed from these traditional crops with
10 traditional programs, the equilibrium position was
11 not dramatically different from the position they're
12 in at this point in time.
13 So I'm in the process of trying to
14 determine what that might mean. And one of the
15 things that might mean is that the USDA and farm
16 programs have been through Congress, have had the
17 subsidy decline progressively over time to the point
18 where farmers, without their knowledge, may not be
19 very dependent upon those farm programs.
20 Q. Can you identify the study for me?
21 A. This was an analysis done by Dr. Bob Taylor
22 and Dr. John Penson at A & M with an econometric
23 model, and it was done for the USDA Soil
24 Conservation Service and presented at a seminar in
25 Washington in January.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
106
1 Q. Is this document published somewhere?
2 A. No, it's not.
3 Q. Did that analysis look at sugar or just
4 these other crops?
5 A. No, sugar was not included in that
6 analysis.
7 MR. SAXE: Off the record.
8 (WHEREUPON, there was discussion
9 off the record.)
10 Q. (By Ms. Stinson) You say you were in the
11 process of trying to determine the dependency, I
12 guess. Are you doing some analysis of that issue
13 yourself?
14 A. Not independently, no.
15 Q. Are you working with Drs. Taylor and
16 Penson?
17 A. I interact with them, and I'm interested in
18 any further analysis they do or any other analysis
19 along those same lines.
20 Q. Are you interested, in part, because of
21 your work on this Everglades litigation?
22 A. No.
23 Q. Can you give me source information for the
24 chart that's on Page 5 of Exhibit 8; or, again, do I
25 ask Dr. Jones for that information?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
107
1 A. I would recommend you ask Dr. Jones, but at
2 the bottom it says, "Sources, ERS," which is the
3 Economic Research Service, USDA, which is U.S.
4 Department of Agriculture. "Cost of
5 Production-Major Field Crops, 1990," that would be
6 for cotton, wheat, rice, and corn.
7 "Sugar & Sweetner Situation Outlook Report,
8 March 1992," for sugar.
9 Q. Do you know what year or dates the figures
10 are for?
11 A. I don't know which dates, no.
12 Q. The item that says, "Net Returns from
13 Market Sales ($/acre.)"
14 Is that what I take it to be, either the
15 profit or loss from per acre of product to the
16 producer?
17 A. I'm not sure what all Dr. Jones put in
18 here, but one of the things that I am pretty sure he
19 put in here as a cost, would be a charge against
20 land; and I wouldn't have done that.
21 So I wouldn't have built this table exactly
22 the same because there is a very large discrepancy
23 between what is typically put in as a charge against
24 land and the charge against cotton, wheat, rice, or
25 corn.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
108
1 Q. Explain that to me. I'm sorry. A
2 difference in charge against land between the
3 different crops?
4 A. The others are much less than sugar.
5 Typically, there's $180 charge per acre that's put
6 in as a cost against land for sugar, and for cotton,
7 wheat, rice, and corn. It's significantly less. I
8 don't have the exact numbers, but it can be $30 or
9 $40, maybe $60; but it's not $180.
10 Q. What does that charge represent?
11 A. The charge can represent a return against
12 land which is also a residual. So whenever you
13 begin to make investments, you can make investments
14 in land and then you draw a return from what's left
15 after you have your crop -- you produce a crop, you
16 sell a crop, and you take out for your nitrogen,
17 your fuel, purchase labor, et cetera, et cetera; and
18 you subtract those away from this gross revenue at
19 the top. That would be a return to land.
20 That value can vary as the residual, and so
21 what I'm saying is that is the residual. And rather
22 than inputting the cost to it directly, I would
23 leave it as a residual and would leave it out there
24 where I could see what it's doing and what that
25 residual is.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
109
1 So I would not have buried it just as part
2 of the cost of production. I would have left it as
3 a residual so I could see it.
4 Q. Do you know what figure is used in this
5 chart?
6 A. No.
7 Q. There's a reference in here to Knutson,
8 Schmitz and Earley. Can you tell me what --
9 MR. BURGESS: What page are you on?
10 MS. STINSON: 3.
11 Q. (By Ms. Stinson) It's at the bottom of the
12 page there. -- (continuing) what study that is or
13 report?
14 A. Knutson, Schmitz & Earley. I didn't read
15 that particular study. But Knutson is the director
16 of the Food and Resource Policy Center at
17 Texas A & M, and he does studies relative to farm
18 policy primarily.
19 This would be a report that was done by
20 these three economists that relates to the sugar
21 program and the policies related to the sugar
22 program.
23 Q. Do you know for whom that report was done?
24 A. No.
25 Q. Let me ask you one more question about this
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
110
1 chart. The deficiency payment listed on Line 2
2 shows, for example, under "Rice" a deficiency
3 payment of a little over $200 per acre.
4 Is that an amount that the government
5 provides or puts into the rice program?
6 A. That's the difference between the market
7 price and the target price or the loan rate if the
8 market price is below the loan rate, but it's the
9 difference between what a farmer receives and the
10 target price on the yield per acre. So it's a
11 direct payment to the farmer.
12 Q. Out of tax dollars?
13 A. That's right.
14 Q. I don't know if we need to put these in or
15 not. These are not stapled, but can you tell me
16 what this document is? It appears to be all but
17 one.
18 MR. SAXE: Counsel, can I see the
19 document from which these might be
20 pages?
21 MS. STINSON: It was like that.
22 MR. SAXE: Can I just take a look
23 at the exhibit pages?
24 MS. STINSON: Off the record.
25 (WHEREUPON, there was discussion
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
111
1 off the record.)
2 MR. SAXE: Counsel, I believe that the
3 staple may have not gone through, but
4 these are sequentially following the
5 last sequence number on the document
6 you've marked as Exhibit 8, and I
7 believe that these are pages of this
8 document.
9 MS. STINSON: Okay.
10 MR. SAXE: Would you like to look
11 at them?
12 MS. STINSON: Yeah.
13 MR. BURGESS: It goes with the
14 sentence on the bottom, "Without these
15 subsidies the recently" -- and then
16 continues -- "observed expansion in
17 the sugar industry."
18 Is that where you are?
19 MS. STINSON: Yeah.
20 MR. BURGESS: And it doesn't
21 follow.
22 MR. SAXE: No, it's not that page
23 you're looking at, Rick. It's page,
24 Bates No. DRL0050048.
25 MR. BURGESS: Is the last page?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
112
1 MR. SAXE: No. That's the first
2 page of the loose pages that Counsel
3 Co-op has handed to Professor
4 Lacewell.
5 The last page on the exhibit is
6 DRL0050047. What I'm saying is I
7 believe that these are pages that
8 belong to that document.
9 Could I take a look at this
10 again?
11 MS. STINSON: (Complies with
12 document.)
13 MR. SAXE: It's a fax stamp on
14 top. In fact, the fax transmission
15 stamp at the top of the pages suggest
16 that they were part of the same
17 document.
18 Would you like to --
19 MS. STINSON: Let's put them
20 altogether, then, if we could, and
21 make them part of Exhibit 8.
22 MR. SAXE: Counsel, I've just
23 taken a quick look at a copy of the
24 documents that I kept of recent
25 productions; and my copy confirms that
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
113
1 it was all one document.
2 MS. STINSON: Okay. I'll leave
3 that for now.
4 Q. (By Ms. Stinson) Let me show you what's
5 been marked as Exhibit 9 and ask you if those are
6 your notes?
7 A. Yes, they are.
8 Q. And what are they?
9 A. This is a response to Suzanne Ponzoli in
10 Miami where she had provided some information for a
11 reaction, and this was a fast turnaround reaction
12 back to what she had done.
13 Q. What information were you reacting to?
14 Do you know?
15 A. Perhaps what you have in your hands.
16 Q. Well, this is another fax I'll show you to
17 Ms. Ponzoli.
18 A. Yeah. That fax you just showed me was what
19 I was reacting to.
20 (WHEREUPON, Exhibit Nos. 9 and 10
21 were marked for identification.)
22 Q. (By Ms. Stinson) Can you tell me what
23 documents 9 and 10 represent?
24 A. It's good to work with these together.
25 We received a document from the office in
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
114
1 Miami where they were looking at what the cost might
2 be on a per pound of sugar basis or acre basis of
3 the SWIM plan and ask that we react to that.
4 Q. Do you know where that information came
5 from that you were reacting to?
6 A. Sugar & Sweetner Report, SWIM plan, and
7 documents of that nature. This represents our
8 recommendations relative to what they were doing and
9 our reaction to what they had done at that point.
10 Q. Are you essentially, then, in 9 and 10
11 analyzing the cost per pound or per acre of sugar
12 production?
13 A. Yes.
14 Q. Can you walk me through what you have done
15 and give me the numbers?
16 A. What we did was suggested that for sugar
17 not all the sugarcane land is harvested and so the
18 estimates that we provided took the cost of the SWIM
19 plan and said, "We want to take the cost for the
20 SWIM plan that would be allocated to the sugarcane
21 in the EAA on a proportionate basis; and, further,
22 take the total cost against all sugarcane acres but
23 allocate them even further down to adjust the
24 harvested acres because the harvested acres are
25 going to have to pay the assessment for acres. If
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
115
1 they're in canals, roads, ditches, they are not
2 harvested."
3 So we wanted to further refine the
4 estimates to make sure that we got it on a per acre
5 harvested basis to better reflect what a farmer
6 would really have to pay.
7 Q. You're not talking about cost of
8 production?
9 A. No.
10 Q. You're talking about cost of the STA's?
11 A. That's exactly right.
12 Q. Okay. I'm sorry.
13 A. That's exactly right.
14 Q. So what cost did you begin with, I guess?
15 A. The cost that came out of the SWIM plan
16 would be what we began with, which would be the cost
17 for the STA's.
18 Q. And tell me the number you were working
19 with.
20 A. $314 million.
21 MR. BURGESS: Is that on one of the
22 exhibits?
23 THE WITNESS: Yes, it is.
24 MR. SAXE: It's been marked as
25 Exhibit 10.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
116
1 MR. BURGESS: Well, where are
2 you?
3 MR. SAXE: It's Bates
4 No. DRL0050112.
5 Q. (By Ms. Stinson) So you began with that
6 being the overall cost of implementing the
7 SWIM plan?
8 A. Yes, that would be the cost for the STA's.
9 Q. Okay.
10 A. We looked at what that cost would be for
11 20 years at 6.5 percent.
12 Q. Let me stop you a minute. Why 20 years and
13 why 6. --
14 A. 20-year bond, typical bond period.
15 Q. And why 6.5 percent?
16 A. That's a typical bond rate at this point in
17 time.
18 Q. That would be an insured bond, correct, not
19 a junk bond?
20 A. Not a junk bond, no.
21 Q. Do you know what the rate is for
22 junk bonds?
23 A. No, I don't.
24 Q. Okay. Did you add to that cost any
25 percentage or amount for the cost of financing in
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
117
1 those types of --
2 A. The 6.5 percent is all we included, was the
3 rate of interest.
4 Q. Okay. Keep walking me through, if you
5 would.
6 A. And that gives you 28.6 million per year as
7 the annual cost for the SWIM -- for the STA's.
8 Q. When you say for the "STA's," are you
9 distinguishing that from other things required by
10 the SWIM plan?
11 A. BMP's, yes, I am distinguishing that.
12 Q. Okay.
13 A. We then took 457,000 acres of cane.
14 Q. And where is that number from?
15 A. I believe that's Hazen & Sawyer's number.
16 Q. Okay.
17 A. 428,000 acres of harvested.
18 Q. Do you mean "harvested per year"?
19 A. Yes, average per year, recent years.
20 Q. Do you know where that number's from?
21 A. And, again, I believe that came from the
22 Sugar & Sweetner Report. But it may have come from
23 Hazen & Sawyer. I don't recall exactly.
24 The cane acres going to an STA is 26,000.
25 We took that from Hazen & Sawyer and the work they
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
118
1 did where they took the STA's and divided it across
2 the EAA for different crops' land uses.
3 Then, using some percentages from
4 Hazen & Sawyer, we took the 26,000 acres of cane and
5 said that represented 24,500 acres of cane that
6 would be harvested.
7 Q. That's basically 428 divided by 457?
8 A. Yes.
9 Q. In that ratio?
10 A. Yes. Yes. Yes.
11 Q. Okay.
12 A. If we're on Exhibit 9, I'm going to jump
13 down to, "New cane acres harvested, 403,500."
14 Q. That's after the STA's?
15 A. After the STA's.
16 Q. "New cane total is 431,000 acres." Tell me
17 again how many harvested new.
18 A. 403,500.
19 Q. Okay.
20 A. That gives us 17,500 acres that are not
21 harvested.
22 Q. Wait a minute.
23 A. If I go to Exhibit 10, the last page, we've
24 got the --
25 Q. Wait a second, if you would. My brain's
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
119
1 working slowly. Okay.
2 A. What we get on Exhibit 10, the last page,
3 is calculating the acres in the EAA 522,000 crop
4 acres from Hazen & Sawyer. We take out STA acres --
5 in this case, we have 32,000 -- that we subtract,
6 which gives us a net of 490,000 acres.
7 Q. Why 32,000 acres?
8 A. Those are STA acres without the Everglades
9 Nutrient Removal Project, which has already come
10 out. Approximately.
11 Q. And the 522 already has had the ENR Project
12 acreage subtracted from it?
13 A. Subtracted out. That's my impression from
14 Agent Sawyer, yeah. Because I'm not positive about
15 that.
16 This gives us 490,000 acres. If we took
17 the 490,000 acres, divide that into $28,000,000,
18 that gives us $58.37 per acre after STA's.
19 Q. Now, the 490,000 includes both vegetables
20 and --
21 A. Yes, and sod.
22 Q. Sod and everything in cane, not just that
23 which is harvested?
24 A. That's true. So the 58.37 would be
25 applicable to the cane acres harvested, not
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
120
1 harvested, et cetera, for the cane acres based on
2 Hazen & Sawyer is BMP cost of $11.50. We add those
3 together, and we get $69.87.
4 Q. Okay.
5 A. Now, if it's $69.87, that's going to be on
6 a per acre of cane basis.
7 Q. Right.
8 A. Gross acre of cane. We took the 69.87, and
9 said, "What we want to do is allocate back to the
10 cane acres and see what we look like on cane
11 acres."
12 We took the 69.87 times the 431,000 acres
13 of total cane; and we got the cost for the SWIM
14 plan, which would include STA's and BMP's of
15 $30.13 million a year.
16 Q. Tell me that number again.
17 A. 30.13 million.
18 Q. Okay.
19 A. And then we took the 30.13 million and
20 said, "That's got to be paid by harvested acres."
21 What were harvested acres? 403,500 is
22 harvested acres.
23 Q. Yes. Okay.
24 A. Dividing 30.13 million by 403,000 acres
25 gives a value of $74.67 per harvested acre for the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
121
1 SWIM plan.
2 At that point a yield was being used of
3 8,650 pounds of raw sugar per acre. If you divide
4 8,650 pounds of raw sugar into $74.67 cents, you
5 get --
6 Q. Wait a minute.
7 A. I'm sorry.
8 Q. Too fast. Okay. A yield of 8,650 pounds
9 raw sugar per acre?
10 A. Yes.
11 Q. What next?
12 A. Then you would get a cost per -- cost for
13 the SWIM plan of 87 hundredths of 1 penny.
14 Q. Where did the 8,650 come from?
15 A. That was a yield in 1990 or '91.
16 Q. From Sugar & Sweetner, do you know?
17 A. Sugar & Sweetner. As I recall, the
18 Sugarcane League statistic showed the same thing.
19 Q. The 87 hundredths of 1 cent per pound of
20 raw sugar is simply a function of the $74.67 over
21 8,650 pounds?
22 A. That's correct.
23 Q. Is that the end of your analysis then?
24 A. Primarily. We have a comment that says
25 that if used 8,000 pounds per acre, it goes up
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
122
1 6 one-hundredths of a penny more than that. So it
2 would be 93 hundredths of a cent.
3 Q. Just shy of 1 cent?
4 A. That's true.
5 Q. When did you do this analysis?
6 A. January the 22nd, 1993, is when we sent our
7 comments back to Ms. Ponzoli.
8 Q. Okay. On Exhibit 9 you have "SWIM costs
9 $65; cane, only $11; BMP, $76." That's somewhat
10 different from the numbers you were telling me of
11 58.37 and 11.50.
12 Can you compare Exhibits 9 and 10, and why
13 do you seem to have a 75 or $6 per acre cost of the
14 SWIM plan, and the other, something just shy of $70?
15 A. My recollection of this is that the $65 is
16 on a crop -- on a harvested acre basis, where we
17 went ahead and made the calculation here. We were
18 looking at some approximate values to get ballpark
19 numbers. We refined the numbers more in
20 Exhibit 10.
21 Exhibit 9 is a working paper, and I could
22 classify Exhibit 10 as a working paper.
23 Q. With regard to the BMP cost, do you recall
24 whether that number is, in fact, from the
25 Hazen & Sawyer Report; or is it from some other?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
123
1 A. It's Hazen & Sawyer, and she developed it
2 from some work done by Bocher.
3 Q. The figures you've used to develop the work
4 you did in Exhibits 9 and 10 do not include, do
5 they, the operation and maintenance costs of the
6 STA's or the BMP's?
7 A. They're part of the BMP cost that are
8 included in there; and it, also, has the cost for
9 water table management. So, yes, it does have the
10 cost included by the SWIM plan.
11 MR. SAXE: Would you repeat your
12 question, please.
13 MS. STINSON: I don't think I
14 can. She can read it back.
15 MR. SAXE: Read it back, please.
16 (WHEREUPON, the requested
17 portion of the record was read
18 by the court reporter.)
19 Q. (By Ms. Stinson) Your response is?
20 A. They do.
21 Q. Even of the STA's?
22 A. Yes.
23 Q. How do they include the cost of the STA's?
24 A. The $314 million is an accumulation of the
25 cost of building, operating, and maintaining the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
124
1 STA's.
2 Q. For 20 years?
3 A. For 20 years.
4 Q. On the cover letter you indicate that,
5 "When we recalculated the bond at 6.5 percent, it
6 resulted in the cost and values," et cetera.
7 Was there a calculation sent to you at some
8 other number?
9 A. We did -- we calculated that at some
10 different values and I can't recall what, but we
11 were looking at one which would have been a bond
12 rate that was effective several months ago of -- I
13 don't recall what -- 7 percent, perhaps.
14 Q. Was the choice of 6.5 percent yours, or was
15 that a number you retained elsewhere?
16 A. That was ours.
17 Q. I don't know if we need this marked at
18 all. I'm handing you a document that contains some
19 information I gathered provided to you by
20 Mr. Hirschhorn.
21 Can you tell me whether you used that
22 information? What is the date of that letter?
23 A. October 3, 1992.
24 Q. Have you used any of that information in
25 any of your work?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
125
1 MR. SAXE: Well, let the record
2 reflect that the document is a letter
3 from Irwin Hirschhorn to
4 Robert Rosenberg, Assistant U.S.
5 Attorney.
6 You're not going to mark this?
7 MS. STINSON: I don't know.
8 Not yet.
9 MR. SAXE: And it has a
10 handwritten chart attached as well as
11 a map.
12 A. There was not any material in this that I
13 used.
14 MS. STINSON: Okay. No, I'm not going
15 to mark it.
16 MR. SAXE: Let's take a break.
17 (WHEREUPON, a recess was taken.)
18 Q. (By Ms. Stinson) Dr. Lacewell, regarding
19 the analysis we were just talking about in
20 Exhibits 9 and 10, have you carried that analysis
21 further to determine whether or not the farmers in
22 the EAA are able to make those kinds of payments to
23 pay for the SWIM plan?
24 A. We've done further analysis on this, yes.
25 Q. And what have you done?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
126
1 A. We refined this analysis that was done here
2 by carrying it on to look at the data from the
3 Sugar & Sweetner Report; and then combined that with
4 the SWIM plan costs to develop estimates of cost per
5 pound of sugar, per acre returns, per acre per pound
6 of sugar to get some of the comparisons.
7 MS. STINSON: Keith, I don't
8 believe -- let me back up.
9 Q. (By Ms. Stinson) Is there a document
10 reflecting that work?
11 A. Yes, there is.
12 MR. SAXE: Yes. Let me take that --
13 MS. STINSON: We can go off the
14 record if you want.
15 MR. SAXE: No. That's fine. I
16 was going to take this up at the end,
17 but as long as it's come up; the
18 document production was based on a
19 collection done some weeks ago.
20 So, naturally, any documents that
21 were produced subsequently that might
22 be responsive are not included in the
23 production that we've received. Those
24 would have to be addressed in a
25 subsequent production.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
127
1 I was operating under the
2 expectation that there was some
3 likelihood Professor Lacewell would be
4 deposed again; and if that is the
5 case, certainly the production will be
6 updated at that time.
7 MS. STINSON: We can go off the
8 record.
9 (WHEREUPON, there was discussion
10 off the record.)
11 Q. (By Ms. Stinson) Dr. Lacewell, the
12 analysis that you've just referred to, was that
13 presented or were the results of that analysis
14 presented to the South Florida Water Management
15 District in February?
16 A. They were presented in Florida to somebody
17 in February.
18 Q. By Dr. Jones; is that correct?
19 A. By Dr. Jones.
20 Q. Would you have working papers that contain
21 the actual numbers you used in developing the
22 conclusions?
23 A. The working papers are the
24 Sugar & Sweetner Report.
25 There may be -- without looking at it --
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
128
1 there may be other sources of data that we did use
2 in that. Let me refrain from saying that's the only
3 thing we used.
4 Q. Okay.
5 MR. SAXE: Off the record.
6 (WHEREUPON, there was discussion
7 off the record.)
8 MR. BURGESS: We can go on the
9 record.
10 Counsel for the United States has
11 suggested that since over the lunch
12 hour, Dr. Lacewell will see whether he
13 has any further documents responsive
14 to the duces tecum request; that it
15 might be appropriate for the Co-op to
16 adjourn their questioning for the
17 moment and for me to begin. And I
18 don't have any problem in doing that.
19 What I would propose to do,
20 though, would be to take some time and
21 review questions on documents already
22 in evidence with the witness and then
23 perhaps that would bring us to the
24 lunch hour.
25 If there are any other further
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
129
1 documents, then Donna could begin and
2 conclude her examination after lunch
3 and then I could go.
4 MR. SAXE: That's fine. We have
5 no problem with that. Just that the
6 clarification that any documents we
7 might find at this point would be
8 newly received or created documents.
9 MS. STINSON: Right. Let me
10 request or suggest that with this
11 analysis he bring the source data so
12 that we can -- not that it will go
13 into evidence, but just for ease of
14 questioning and responding -- be able
15 to tell is where numbers came from,
16 you know, The Sugar & Sweetner Report,
17 whatever.
18 MR. SAXE: That sounds like that
19 stuff would be responsive under your
20 original request for documents.
21 So I'll just use the same
22 criteria that we used; and that would
23 include any data that's been
24 considered or relied upon, to the
25 extent that there's such data.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
130
1 And I don't know that there's a
2 lot.
3 MS. STINSON: Off the record.
4 (WHEREUPON, there was discussion
5 off the record.)
6 MR. SAXE: On the record.
7 I'll see what we can find, and we'll
8 take it from there.
9 MS. STINSON: Okay. Thank you.
10 * * *
11 E X A M I N A T I O N
12 * * *
13 BY MR. BURGESS:
14 Q. Dr. Lacewell, my name is Rick Burgess. I
15 represent the Florida Sugarcane League and the
16 United States Sugar Corporation in this litigation.
17 And I would just ask -- similar to
18 Ms. Stinson -- if you don't understand any question
19 that I ask, ask me to rephrase it, so I'm clear that
20 you're answering the question that I've asked you
21 to.
22 To begin with, I'd ask you to refer to
23 Exhibit No. 1.
24 A. Okay. I have Exhibit 1.
25 Q. Thank you. On the second page of that
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
131
1 Exhibit Paragraph G reads, quote, "It is important
2 to emphasize that the BMP's are a higher level of
3 technology; and if applied correctly, there is not
4 expected to be a significant yield of decline."
5 You authored that statement; is that
6 correct?
7 A. Yes.
8 Q. And what is the basis or what was your
9 basis for that statement?
10 A. The basis of this statement is that as we
11 move to higher levels of technology across the
12 United States in agriculture, it's important that we
13 implement the new technologies appropriately. And I
14 would say that the BMP's are the same relative to
15 "You forget to do it correctly."
16 And that's what that means there is that --
17 in discussions with Dale Bocher, he indicated there
18 would be no yield effect from implementing the new
19 BMP's done correctly.
20 Q. And what BMP's are you referring to in that
21 paragraph?
22 A. The ones developed by Dr. Bocher in the
23 reports he did for the South Florida Water
24 Management District and IFAS.
25 Q. Other than Dr. Bocher, are you aware of any
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
132
1 other studies or reports which deal with potential
2 yield effect or yield effects of implementation of
3 the BMP's?
4 A. No, I'm not.
5 Q. Are you aware of any on farm impacts that
6 any EAA farmers have experienced with respect to
7 implementation of some or all of the BMP's contained
8 in the SWIM plan?
9 A. I would refer to the deposition by
10 Mr. Wedgworth who indicated that the farmers are
11 currently implementing a significant number of the
12 BMP's and that they've been doing this for a fairly
13 long period of time and they've had no yield impact
14 from that. They do it as a matter of course.
15 Q. Are you aware what percentage of the farms
16 in the EAA have implemented the water table or pump
17 BMP as of this point in time?
18 A. I would expect that all the farmers have
19 implemented, to some extent, some part of the BMP's
20 and water table management.
21 The question, "to what extent."
22 Q. The next sentence reads, "Significant yield
23 impacts can be expected to result only if the BMP's
24 are implemented incorrectly."
25 Are you aware of any studies or reports
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
133
1 which have attempted to quantify potential yield
2 impacts from implementation of the BMP's?
3 A. I don't know of any that attempted to
4 quantify yield impacts of implementing BMP's.
5 That would go back to the Bocher study that
6 says, "There would be none if they're done
7 appropriately."
8 Q. And that's what you're relying on for your
9 statement in Exhibit 2?
10 A. Yes.
11 Q. Paragraph E on that same page says, "We
12 need an the alternative," and maybe the "the" there
13 is inappropriate.
14 "We need an alternative crop to sugarcane,"
15 is that the way it should read?
16 A. Yes.
17 MR. SAXE: Excuse me. Counsel, where
18 are you?
19 MR. BURGESS: Paragraph E.
20 Q. (By Mr. Burgess) The second sentence says,
21 "The region appears to have been in livestock before
22 crop production."
23 MR. SAXE: For the record, let me just
24 indicate that this is Point E, which
25 is a Subsection of Point 2, titled
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
134
1 "Other Data Sources or Insight into
2 the Analysis."
3 MR. BURGESS: Correct.
4 Q. (By Mr. Burgess) And the witness says the
5 paragraph should read, "We need an alternative crop
6 to sugarcane. The region appears to have been in
7 livestock before crop production."
8 My question is: What is the basis for the
9 statement, "We need an alternative crop to
10 sugarcane"?
11 A. The basis of that statement is that,
12 typically whenever one crop is not produced in a
13 region, an alternative crop is produced.
14 And the question I had is: What are the
15 possible alternative crops to sugarcane for the EAA,
16 if any?
17 Q. And why in this situation would you have,
18 in your words, a crop that wouldn't be produced?
19 A. You'd need to rephrase that one.
20 Q. I'm asking in reference to the specific
21 SWIM plan that we're here discussing, why do we need
22 an alternative crop to sugarcane?
23 You said, "Typically, whenever one crop
24 isn't produced in the region, another one is."
25 Why do we need an alternative?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
135
1 MR. SAXE: Objection to form.
2 I think you misquoted the
3 witness.
4 As I indicated, this is a
5 subpoint under category titled, "Other
6 Data Sources or Insight into the
7 Analysis."
8 I don't think the witness
9 testified that the EAA needs an
10 alternative crop to sugarcane.
11 Q. (By Mr. Burgess) Does the EAA need an
12 alternative crop to sugarcane?
13 A. The basis for this suggestion right here is
14 this is a part of a letter to Grace Johns where I
15 was indicating, "As you do this economic analysis, I
16 would suggest that, as you do the analysis, if your
17 analysis shows that sugarcane becomes uneconomic
18 rather than abandoning the land to no use or idle,
19 it would make economic sense to see if there is some
20 other crop or use that could exist for this land."
21 Q. And in that context, do you know whether,
22 in fact, other uses, other than idling the land or
23 abandoning the land have been examined by
24 Grace Johns?
25 A. Relative to the 10-year study, my
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
136
1 impression is that she did not look at an
2 alternative use; and she idled the land.
3 What she might do on a 20-year analysis, I
4 can't say.
5 Q. Are you aware of any studies, whether
6 ongoing or completed, which have examined
7 alternative crops or land use to sugarcane in the
8 EAA?
9 A. No.
10 Q. The second sentence in that same paragraph
11 says, "The region appears to have been in livestock
12 before crop production."
13 How did you become aware of that?
14 A. That would be from review from the soil
15 survey from Soil Conservation Service, and
16 discussions with a variety of people that are
17 associated with the EAA.
18 Q. Do you know, in fact, how many acres were
19 in livestock in the EAA and during what periods of
20 time?
21 A. No.
22 Q. Do you know whether livestock was
23 profitable in the EAA?
24 A. I would assume it was because they were
25 producing livestock, and they went from livestock to
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
137
1 sugarcane.
2 Q. Do you know why it went from livestock to
3 sugarcane?
4 A. Sugarcane's more profitable.
5 Q. Do you know whether anyone is examining
6 whether, in fact, livestock could replace sugar crop
7 production in the EAA?
8 A. Again, I don't know if Dr. Johns is going
9 to include that in the Hazen & Sawyer study, given
10 factors that might make sugarcane uneconomic, and if
11 she's going to look at livestock as a possible
12 substitute.
13 Q. What factors might make sugarcane
14 uneconomic?
15 A. If the cost of production, out-of-pocket
16 costs, exceed your returns, then it becomes
17 uneconomic to produce a crop.
18 Q. The third page of that same exhibit
19 identifies persons associated, I believe, with
20 either IFAS or the SCS. It simply asks you to
21 review that list.
22 And my question is: Since your retention
23 by the Department of Justice, you have spoken with
24 all of those people on that list?
25 A. This is a list of names and phone numbers
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
138
1 that have expertise in the EAA that I included on
2 this letter to Dr. Johns as potential contacts that
3 she might want to get input data on.
4 Relative to each one of these names -- do
5 you want me to read each one? I have talked to each
6 one of these people.
7 Q. You have?
8 A. Yes.
9 Q. Did you get vegetable budgets from
10 Tim Taylor?
11 A. I got vegetable budgets from somebody, and
12 I think it was Tim Taylor.
13 Q. And do you know whether that information
14 was among the documents that you have produced?
15 A. I believe it was.
16 MR. SAXE: For the record, Counsel,
17 you're probably aware that there was a
18 volume of public-published documents
19 that were identified as responsive
20 documents and producible; but for
21 which, rather than providing copies a
22 list was provided to Counsel with a
23 request that Counsel indicate which
24 documents, if any, they wanted hard
25 copies of.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
139
1 Q. (By Mr. Burgess) Exhibit 2, if you could
2 refer to that one.
3 A. (Witness complies.)
4 Q. What is this, again, for the record,
5 Exhibit 2?
6 A. This is a fax that went to Grace Johns on
7 6/3/92 from me, Dr. Jones and Dr. Ozuna.
8 Q. And the purpose for sending it was?
9 A. We had been visiting with Dr. Jones about
10 her interim reports and progress and indicated a
11 willingness to look at, review, and service peer
12 reviews for the work she had done.
13 She said, "Be specific in what you might be
14 interested in looking at," which was everything; and
15 we wrote them down and faxed them to her.
16 Q. On 6/3/92; is that correct?
17 A. Yes, that would be true.
18 Q. Had you, in fact, reviewed drafts of her
19 report by this date?
20 A. I can't answer with 100 percent assurance,
21 but I do not think we had.
22 Q. But, subsequently, you did review a draft?
23 A. Yes.
24 Q. Do you know when that was?
25 A. No.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
140
1 Q. Subparagraph C under Paragraph 1 talks
2 about, "Alternative assessments for funding the
3 STA's (range in cost of implementing BMP's across
4 farms)."
5 Do you know how Dr. Johns selected her
6 alternative assessment amounts?
7 A. These would be the 10.25 one-hundredths?
8 Q. Yes.
9 A. My impression is that she developed those
10 values with the South Florida Water Management
11 District, or they were in the contract. I can't
12 tell you exactly which.
13 Q. Did you or any of the authors on this memo
14 have input in recommending either of those amounts
15 or other amounts?
16 A. No.
17 Q. What does Paragraph 6 refer to? What
18 strategies are you referring to there?
19 A. "Strategies for reducing the economic
20 impacts as gleaned from other areas."
21 This would relate to the mitigation issue
22 of if there are negative economic impacts, some
23 sectors of the economy would be effected. What has
24 happened in other areas of the United States or in
25 other areas of the world where there were strategies
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
141
1 or programs enacted that could help mitigate those
2 impacts.
3 And that was a question of, what has she
4 done relative to develop and review literature on
5 strategies in other areas where there could have
6 been a negative economic impact.
7 Q. And do you know what she has done in those
8 areas, if anything?
9 A. She developed a review of literature in her
10 completion report that addresses some activities in
11 other parts of the United States.
12 Q. What are you referring to when you say,
13 "her completion report"?
14 A. It was a completion report by
15 Hazen & Sawyer to the South Florida Water Management
16 District, which I don't have the title or the date;
17 but the cover will say "Completion Report."
18 Q. And that's on the impact study as opposed
19 to the benefit study?
20 A. Yes, on the impact study.
21 Q. Other than Dr. Johns' review of the
22 literature, are you aware of any other studies,
23 whether ongoing or completed, which reviews what has
24 happened in other areas of the United States or the
25 world with respect to negative economic impact?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
142
1 A. I don't have any specific references I can
2 give you, but there are activities in the University
3 of California; the University of Colorado; Colorado
4 State University; Washington State University;
5 Idaho, University of Idaho that have people that
6 look at these kinds of issues.
7 Q. Are you aware of anyone looking at these
8 kinds of issues for the SWIM plan?
9 A. No.
10 Q. What does Paragraph No. 7 refer to with
11 respect to "methodology"?
12 A. Again, what we're asking her for is if she
13 has material we can review, then we would be happy
14 to review it; and in this case, it's the
15 "Methodology selected for valuing the Everglades."
16 This has to do with the extension of the
17 contract where she's looking at the issue of the
18 Everglades.
19 Q. What do you understand that she's doing
20 under the extension of the contract?
21 A. That's been completed. That was part of
22 the other contract and that's where she was to look
23 at methodologies and any opportunities for
24 estimating value of the Everglades.
25 Q. Is this the natural resource benefits
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
143
1 analysis?
2 A. I'm not sure. I did not spend a lot of
3 time in this area.
4 Q. You testified either earlier today or
5 yesterday as to Grace Johns having conducted what
6 amounted to a literature research with respect to
7 natural resource benefits.
8 Is that what you're referring to here
9 again?
10 A. I don't recall what the reference was to
11 yesterday, but she did address the benefits of a
12 natural resource or wetlands by subcontracting with
13 some other firm.
14 Q. Are you aware of, other than that study,
15 whether she is doing anything else in this area?
16 A. No, I'm not.
17 Q. Other than that particular study, what
18 studies or reports are you aware of, whether ongoing
19 or completed, that deal with methodologies selected
20 for valuing the Everglades?
21 MR. SAXE: Objection to form.
22 Counsel, are you confusing the
23 benefits or valuation of the
24 Everglades with -- I'm sorry. Excuse
25 me. I'm confusing it.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
144
1 Retract the question. Go ahead.
2 Do you want the question reread
3 to you?
4 THE WITNESS: Yes.
5 (WHEREUPON, the requested
6 portion of the record was read
7 by the court reporter.)
8 A. I'm not aware of other studies that have
9 taken place.
10 Q. (By Mr. Burgess) Paragraph 8 speaks in
11 terms of, "If benefits or value from another study
12 site is used to value the Everglades, what is the
13 other study site or sites?"
14 Given your last answer, am I correct in
15 assuming that other than what is contained in
16 Grace Johns' report done on a subcontract basis,
17 you're not aware of any reports or studies which
18 attempt to extrapolate results from other study
19 sites from valuing the Everglades?
20 A. I'm not following that review literature.
21 This is simply, again, a question to Grace Johns
22 that, "If you have done some work in this area, we
23 would be interested in knowing what the site is that
24 you're using to transfer the data from."
25 Q. And my question is: Other than what
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
145
1 Grace Johns has done in that area, you're not aware
2 of anyone that has attempted to do that; is that
3 correct?
4 MR. SAXE: Objection to form.
5 Counsel, specifically, with respect
6 to the Everglades, transfer of other
7 valuation studies to valuing the
8 Everglades?
9 MR. BURGESS: Right.
10 A. No, I'm not aware of other studies.
11 Q. (By Mr. Burgess) In Paragraph 10, you
12 speak in terms of, "estimation of secondary
13 impact." What secondary impacts are you referring
14 to there?
15 A. In this case, we're looking at how she's
16 going to fulfill the objectives of her study on what
17 are the impacts of economic activity on employment
18 and some of the nontarget sectors of the economy.
19 Q. And in that context, defining "secondary
20 impacts," what would the "primary impacts" be?
21 A. The primary impacts are changing gross
22 revenue to agricultural output.
23 Q. If you could, turn to Exhibit 3.
24 A. (Witness complies.) Okay.
25 Q. On the fourth page of that exhibit I
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
146
1 believe you refer to one of your handwritten notes
2 yesterday during your testimony, towards the bottom
3 which reads, "but all does not have to be paid by
4 farmers."
5 Do you see that?
6 A. Yes.
7 MR. SAXE: Could we stop for a
8 moment.
9 (Brief phone interruption.)
10 MR. BURGESS: Back on the
11 record.
12 Q. (By Mr. Burgess) My question is: What is
13 the basis for that statement?
14 A. The basis on that statement where I
15 indicated that, "but all does not have to be paid by
16 farmers," was a comment that I was making to myself
17 as I read through this, and is it resolved by the
18 South Florida Water Management District by
19 Southern Florida that all the assessment will be
20 placed against agricultural land.
21 So it's more a note to myself or a question
22 or an unresolved issue.
23 Q. Well, it seems to be an affirmative
24 statement, does it not, that all does not have to be
25 paid by the farmer?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
147
1 A. Still, it was a question in a note to
2 myself that, "Does it all have to be paid by the
3 farmers," and I don't have the answer to that and
4 I'm not drawing a conclusion about that.
5 Q. Are you aware of what the basis would be
6 for apportioning, any portion, of the expense
7 between farmers and any other group?
8 A. I would assume this is a decision from the
9 South Florida Water Management District; and how
10 they go about making decisions on assessments and
11 apportioning, I don't know.
12 Q. If we could turn to Exhibit 4.
13 A. Okay.
14 Q. And I believe you testified yesterday that
15 these were some thoughts you were writing down to
16 yourself with respect to the expanded 20-year
17 analysis?
18 A. Yes.
19 Q. In Paragraph No. 2, the second indentation
20 talks about, "trend in costs of production."
21 Have you looked at those trends?
22 A. I have not drawn out the trends and
23 analyzed them, no.
24 Q. Are you aware of anyone that has?
25 A. Not specifically. But it is my impression
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
148
1 that Grace Johns may be looking at that.
2 Q. Do you know over what time period she's
3 examined it?
4 A. No.
5 Q. How would you define the word "trend" for
6 purposes of economic analysis?
7 A. A trend is a fairly consistent change in
8 one direction.
9 Q. Down at the bottom, towards the bottom of
10 that page, the third bullet from the bottom says,
11 "Review sugarcane production in South Florida from
12 1970 to 1990 for trends, adjustments, et cetera."
13 Have you done that?
14 A. No, I have not done that.
15 Q. Are you aware of anyone that has?
16 A. No, I'm not.
17 Q. Do you have an opinion as to whether or not
18 a review of such production -- strike that.
19 Do you have an opinion as to whether or not
20 a review of sugarcane production in South Florida or
21 that 20-year period for trends, adjustments,
22 et cetera, is a necessary component of a 20-year
23 analysis?
24 A. I wouldn't say that it was a necessary
25 component. It could be part of the information used
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
149
1 to try to determine how you're going to project for
2 another 20 years. It can be useful input
3 information.
4 Q. What are you referring to in the last
5 bullet on that page, which reads, "The 'parity'
6 syndrome is a strawman that needs to be laid to
7 rest"?
8 A. This comment relates to the efforts by some
9 that have a tendency to fix yields, fix prices
10 received for a product and then put cost production
11 down and then begin an inflation on cost production
12 and demonstrate how an inflating cost production is
13 going to override your returns and that invariably
14 everyone's going broke.
15 Q. And have you raised that in a context of
16 the EAA?
17 A. Dr. Polopolus had one graph at one point
18 where he drew this phenomenon.
19 Q. And why do you think that it is a strawman?
20 A. I think it is a strawman because we've
21 heard this since 1914 about, "Agriculture deserves
22 the same profit share that they had in every case."
23 And what we see is adjustments that people
24 don't consider, which is input change mix,
25 technological changes; and in some cases, we'll get
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
150
1 an increase in output, or activity increases,
2 changes in efficiency, and adjustments in
3 production.
4 Q. When you say "input change mix," what are
5 you referring to?
6 A. I'm referring to change in the relative
7 amount of fertilizer to water to new varieties, to
8 labor versus machinery.
9 Q. And what are you referring to when you say
10 "technological change"?
11 A. Technological changes can be improved,
12 efficiency-improved or specifically to sugar,
13 improved sugar content in the cane; improved milling
14 efficiency; higher yields, and biomass; improved
15 management practices; substitution of machinery
16 harvesting for labor harvesting as possibilities.
17 Q. And what adjustments in production are you
18 referring to?
19 A. That would be an adjustment in production.
20 Adjustments in production are the same
21 things as adjustments in the input mix.
22 Q. If I can refer you to Paragraph 6A on the
23 same exhibit.
24 A. Okay.
25 Q. How do you define a "price cost squeeze"?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
151
1 A. The "price cost squeeze" would be the
2 phenomenon that would say that cost of production
3 relative to prices received is narrowing.
4 Q. "Cost of production relative to" -- what?
5 I'm sorry. "Prices"?
6 A. Cost of production relative to price
7 received is becoming more narrow.
8 Q. And are you aware of any studies or reports
9 that have examined the price cost squeeze relative
10 to the EAA?
11 A. Nothing beyond what Dr. Polopolus developed
12 and presented to the board.
13 Q. Why, in your opinion, is it not relevant?
14 A. In my opinion, we've had this brought up as
15 a problem since the 1930's, 40's, 50's, 60's and
16 on. And what that ignores, totally, is the input
17 mix, adjustments, the ability of farmers and
18 processors to make adjustments to adopt new
19 technology; and in the cases of the soothsayers that
20 continually forecast the demise of agriculture
21 that's continued as a viable sector.
22 Q. What specific technological improvements
23 can you reliably project for the Florida sugar
24 industry relative to, let's say, production?
25 A. Reliably projecting technologies is
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
152
1 probably a part of the problem. We can go back
2 20 years and do any kind of analysis you want trying
3 to project the future and miss it completely. So
4 you'd be very unreliable in trying to go to the
5 future.
6 But there are shifts that take place, and
7 there are new technologies coming on line, such as,
8 Dr. Polopolus' suggestion in his publication with
9 IFAS that says that, "There are opportunities to
10 improve the processing by several percentage points
11 in the EAA at the mills."
12 So I would rely upon his expertise as --
13 that's one. Improved water table management,
14 drainage, coming from efforts of IFAS, Soil
15 Conservation Service. Even the League, I believe,
16 is supporting work along those lines in developing
17 technologies.
18 Improve varieties that have higher yield to
19 biomass and/or sugar content, which I believe, also,
20 is being supported by the Sugarcane League.
21 Improve mechanization, Dr. --
22 Mr. Wedgworth, in his deposition showed
23 innovativeness of sugar by him being one of the
24 pioneers in developing mechanical harvests, which
25 has been improved progressively.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
153
1 Q. Okay. The same Paragraph 6A, the first
2 bullet speaks in terms of, "Trends of yield
3 technology, price input mix will take care of
4 them."
5 I suppose you're referring to, it will take
6 care of what the price cost squeeze or the syndrome
7 of parity or both?
8 A. The price cost squeeze. As farmers reacted
9 to economic incentives, they will make adjustments.
10 And we probably can find some indication of
11 the kind of adjustments they've made in the past by
12 looking at the historical data to see what is
13 happening in, for example, sugarcane production, and
14 what's happening to our input mix, how they produce
15 cane now, relative to how they did 20 years ago and
16 how that's had some evolution of adjustment.
17 Q. Are you aware of any studies, whether
18 ongoing or completed, which have reviewed the trends
19 you speak about in that paragraph, "yield technology
20 price input mix"?
21 A. No, I have not. I assume you mean for
22 the EAA?
23 Q. Yes. What does Paragraph B refer to there
24 with respect to "vegetables," and I believe it
25 reads, "productivity gains are not addressed for" --
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
154
1 A. 6B, "Sod and Vegetables-productivity gains
2 are not addressed."
3 Q. ("Start from veggies to cane")?
4 A. I'm trying to read that.
5 Q. ("Shift from veggies to cane on some
6 acres")?
7 A. Again, these are comments relative to what
8 we consider on a 20-year analysis, and what are the
9 options. Everything's on the table. Let's think
10 about everything.
11 The concern I've got, particularly in the
12 first Hazen & Sawyer study, when I look at
13 vegetables, what she does is she locks yields, she
14 locks prices, and she begins an inflation against
15 cost production; and the cost production on
16 vegetables are relatively high compared to corn or
17 wheat or other crops.
18 And she has the inevitable happen, which
19 is, in a very few years, the cost overruns the gross
20 revenue.
21 And my impression, my opinion is that needs
22 to be addressed to see if that is a logical outcome,
23 which I don't think it is.
24 Q. And you think there are similar
25 productivity gains that will be made in sod and
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
155
1 vegetables which will prevent that cost price
2 squeeze?
3 A. There may be productivity gains and there
4 may be input mix shifts and there may be adjustments
5 due to the economic incentives.
6 Again, in which case for vegetables, this
7 is a small acreage relative to the world's 21,000
8 acres. The market is one where they hit a market
9 that has a window, and they've got the acreage at a
10 level where the price is responsive to output. And
11 what I'm saying, you can reduce your acreage of
12 vegetables somewhat and get a positive price
13 response to offset this increasing cost.
14 Q. Paragraph 7 speaks in terms of
15 "Harvesting," first bullet entry, "is full
16 conversion to mechanical."
17 Do you have any opinion as to whether a
18 full conversion to mechanical will have a positive
19 or a negative effect on yield in terms of tons per
20 acre?
21 A. I would like to see information on that. I
22 don't really have a real strong opinion about that.
23 Q. Have you heard of any studies or reports
24 that speak in terms of productivity gains or
25 decreases as a result of going from hand harvesting
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
156
1 to mechanical harvesting?
2 A. Again, I can't document the exact
3 references; but in visiting with people and looking
4 at a lot of documents in the Wedgworth deposition,
5 you can get both sides.
6 There are some that say mechanical
7 harvesting of sugarcane on the Muck soils may result
8 in somewhat less cane being harvested.
9 Mr. Wedgworth indicates, "mechanical
10 harvesting has no effect."
11 Q. The same page, Paragraph 8, addresses
12 "BMP's," and -- I'm sorry. It's Paragraph 9, which
13 address "Sensitivity Analysis."
14 Are you aware of any ongoing sensitivity
15 analysis being conducted in relation to this 20-year
16 study?
17 A. My impression is that Dr. Johns plans to do
18 some sensitivity analysis, yes.
19 Q. And what is a "sensitivity analysis"?
20 A. Sensitivity analysis to put it in context,
21 20 years is a long time to project. If we projected
22 20 years -- starting in 1970, projecting where
23 Russia would be, the United Soviet Union in 20 years
24 would have been really out of line because there is
25 no Soviet Union.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
157
1 Nevertheless, sensitivity analysis gives us
2 the option of saying we're going to make the best
3 projection we can; but on some of the factors that
4 we project, "We're going to try to look at some
5 bounds on it to see just how much it changes the
6 projection if you take an optimistic approach at it,
7 if you take a pessimistic approach. And let's try
8 and put some bounds around these estimates."
9 The further you project, the wider those
10 bounds will get.
11 Q. And are you aware of upon what estimate she
12 is conducting sensitivity analysis?
13 A. I don't recall the factors that she is
14 going to do sensitivity analysis on. No, I don't
15 recall those.
16 Q. Do you have an opinion with respect to this
17 particular 20-year study as to what factors would be
18 good candidates for the sensitivity analysis?
19 A. Did I list any on the next page? I'd want
20 to take a little bit of time just to be careful with
21 that. Some of those could be yield sugar
22 concentration, prices paid by farmers relative to
23 fuel, et cetera.
24 Q. Other than Dr. Johns, are you aware of any
25 studies or reports ongoing or completed which
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
158
1 perform sensitivity analyses on factors such that
2 you have just mentioned yielded sugar concentration
3 on prices paid by farmers for fuel?
4 A. It was my impression that ERS was looking
5 at an analysis in the EAA. Whether they will print
6 that, publish that, or it will ever see the light of
7 day, I have no idea.
8 Q. Who is ERS?
9 A. Economic Research Service,
10 U.S. Department Of Agriculture.
11 Q. Where did you gain this understanding that
12 they were looking at this?
13 A. Oh, that's a good question. That could
14 have been in a discussion I had with Ron Lord --
15 Dr. Ron Lord, Dr. Johns, or Dr. Jones, or a number
16 of other people.
17 Q. Was that being done, to your knowledge, for
18 purposes of the SWIM plan challenge or this hearing?
19 A. No.
20 Q. Do you know whether, in fact, it's ongoing?
21 A. I don't know that it's continued. I don't
22 know that anything was done on it. It was just
23 discussion, rather.
24 Q. The last page of the same exhibit at the
25 top talks in terms of "exercises," which I think you
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
159
1 identified as things which could be done in
2 conjunction with the 20-year analysis; is that
3 correct?
4 A. These were some alternatives that occurred
5 to me that were possibilities for the 20-year
6 analysis that might provide some information.
7 Q. Do you know whether anyone has undertaken
8 that second bullet entry there, "Identified major
9 changes from 1970 to 1990 that have occurred in cane
10 production in EAA"?
11 A. No, I don't know of anyone that's done
12 that.
13 Q. The last bullet reads, "With IFAS budget
14 and Sugar & Sweetner Report, do a simple trend on
15 net returns per acre over 20 years."
16 Are you aware of anyone that has done that
17 with either the IFAS budgets or the Sugar & Sweetner
18 Report or a combination thereof?
19 A. No, I'm not aware of that either. I'm not
20 aware that anyone has done that or is doing that.
21 Q. What does your note over to the side with
22 the arrow refer to there in the context of the
23 bullet entry which we just spoke about?
24 A. The bullet entry, again, was this concept
25 of looking at what information is available to do
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
160
1 some kind of a trend on the net returns per acre
2 over 20 years; and I was -- the note on the side
3 that I've placed is, "One way to proxy input and mix
4 adjustment as well as trends and technology
5 advances."
6 Now, I'm still concerned about this change
7 in mix of inputs and changes in production and
8 changes in management practices and the many other
9 things that we're seeing advance so rapidly; and it
10 occurred to me that this might be some way that we
11 might could proxy in how these adjustments are
12 taking place and what's going on in input mixes and
13 these changes as we try and develop some kind of
14 long-term trend.
15 Q. What are the terms "low confidence" and
16 "high confidence" refer to at the bottom of that
17 page?
18 A. Well, this would be some of the other
19 thoughts I had when we were looking at 20-year
20 analysis; and, again, these are my own personal
21 levels of -- that I could place on a confidence
22 study that was conducted over that long period of
23 time.
24 And whenever you make 8 single point
25 projections or trend projections, the low confidence
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
161
1 are the ones that I will state that I would not --
2 I'd have less confidence in those than I would in
3 the ones that say high confidence.
4 Q. Meaning you have less confidence in them
5 occurring?
6 A. Less confidence in the trend line, any
7 projections.
8 Q. I'm still -- I'm trying to understand that
9 term. Is there another way you can put that into
10 layman's terms with respect to low confidence?
11 A. Okay. On these, whenever we make a trend
12 line out for any or all of these factors, we have to
13 make estimates for your 2, 3, 4, to the year 20; and
14 this then is the basis of the analysis.
15 And what I'm saying is that, this 20 years
16 of information that you're going to use to base this
17 analysis on can be significantly different on either
18 side of that trend. It can be a much larger level
19 input mix than your trend or maybe less. And so
20 these can vary around a trend line significantly and
21 will change your ultimate results significantly. My
22 level of confidence on those might change if some of
23 the analysis above were done.
24 Q. If some of the analysis --
25 A. -- above were done, looked at the last
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
162
1 20 years.
2 Q. But you're not aware of anyone that has
3 done that?
4 A. No.
5 Q. That point you just raised, is that what
6 you meant in your final bullet on that page,
7 "20-year analysis of profit/acre trend, good base
8 for the future"?
9 A. Yes.
10 Q. Are you aware of anyone that had been asked
11 to do that, to do such a trend analysis?
12 A. No.
13 Q. If you could, turn to Exhibit 5.
14 A. (Witness complies.) Okay.
15 Q. What did you mean by "hatchet job," as you
16 used that term in the fifth bullet on the first
17 page?
18 A. This refers to the presentation by
19 Dr. Polopolus and consequently some presentations
20 with Dr. Richardson where they allowed Grace Johns
21 to do her study, make her presentation, and then
22 came up with some alternative estimates, a series of
23 fairly serious allegations relative to gross
24 errors.
25 And then they provided alternative numbers
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
163
1 without following through with what's typical
2 agricultural economic professional approach, which
3 is to give everybody every assumption and all the
4 background for how they generated their own numbers
5 and what did they use, just left their analysis
6 partially discussed.
7 Q. Is it your opinion or understanding that
8 Polopolus and Richardson undertook a separate
9 analysis?
10 A. At some point they generated some
11 alternative values.
12 Q. Are you aware of the fact that they have
13 referred to their effort or efforts in connection
14 with the Hazen & Sawyer Report as being a review of
15 that report?
16 A. My impression is they said it as both a
17 review and that they redid the report and the
18 analysis using their own numbers.
19 Q. When you say "their own numbers," what do
20 you refer to?
21 A. I have no idea. We've not been able to get
22 any idea of what the numbers are that they used.
23 We've repeatedly showed an expression of being
24 available and willing to meet with them.
25 Q. That expression manifested itself how,
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
164
1 through Counsel; or have you contacted them
2 individually?
3 MR. SAXE: Objection to form;
4 unclear.
5 Q. (By Mr. Burgess) How has your expression
6 to meet with them manifested itself?
7 A. Through the South Florida Water Management
8 District.
9 Q. Let me show you something which I believe
10 you were shown yesterday, and I'm not sure whether
11 you identified that or not.
12 Do you know what that document is?
13 A. This is a document that's titled, "The
14 Florida Sugarcane League Summary of
15 Hazen & Sawyer's Potential Economic Impact Analysis
16 Settlement Statement and MSD Act Including STA's,
17 BMP's and Alternative Assessments, Sugarcane
18 Vegetables and Sod." And this is a cover page that
19 was given to me by Carl Woelche, as I recall.
20 Q. Did he tell you what it was or where he got
21 it?
22 A. My impression is that this was given to him
23 in a meeting with Dr. Woelche, Dr. Johns and the
24 Sugar League economist, which would be Dr. Polopolus
25 and Dr. Richardson.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
165
1 MR. BURGESS: Can we mark that?
2 (WHEREUPON, Exhibit No. 11
3 was marked for identification.)
4 Q. (By Mr. Burgess) When you testified
5 earlier that you have made repeated expressions of
6 wanting to meet with Dr. Polopolus and Richardson,
7 what is it that you wanted to meet with them about?
8 MR. SAXE: Objection to form.
9 A. We were responding to inquiry by Dr. Johns
10 and Hazen & Sawyer and from the district, relative
11 to, would we be willing to sit down with all the
12 economists involved; and, again, we responded
13 positively in more than one case and opened our
14 calendars for that.
15 Q. (By Mr. Burgess) Well, you also testified,
16 I believe, that in your opinion, they left their
17 analysis partially discussed.
18 What parts are missing in your --
19 A. I'd go back to the idea of laying out
20 exactly step by step what they did, how they did it,
21 what each and every assumption is, what they
22 compared to what.
23 Q. As you sit here today, do you have any
24 specific questions of them or what they did?
25 A. Yeah. I would be curious about what they
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
166
1 used for debt on land and where they got it, what's
2 the basis of it, what they used for land values for
3 starting, why did they put a 4 percent inflation
4 rate on land, did they use any improved efficiencies
5 in any of the estimates.
6 I would ask for the basic assumptions,
7 methodology, and the results for the different
8 scenarios by year.
9 Q. When you say "basic assumptions and basic
10 methodology in terms of economic analysis," what are
11 you referring to? Are you referring to a baseline
12 scenario or --
13 A. That's one of the scenarios. What is the
14 baseline? I would like to see the baseline
15 described in detail. That's a baseline scenario.
16 Then, they implement the SWIM plan with different
17 levels of assessment. Then, they make another
18 analysis, which would be scenarios "A,B,C,D."
19 Q. When you say "They make another analysis,"
20 are you referring to the analysis in Exhibit 11?
21 A. Well, I'm referring to an analysis whereby
22 they would implement the SWIM plan with different
23 levels of assessment. And there are some values
24 that are reported here, but I don't really know how
25 to interpret those values.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
167
1 Q. Now, you're referring to the values, such
2 as, lost acreage, and remaining acreage, jobs and
3 workers total revenue, and total job earnings
4 appearing on Exhibit 11?
5 A. Yes.
6 Q. And when you said you would like another
7 basic methodology, what are you referring to there?
8 A. Well, you'll have to follow some kind of a
9 procedure that you follow through; and I would like
10 to know what procedure they followed, what specific
11 quantitative model they used, and how they used the
12 model, what assumptions they used to make
13 determinations of land being in production or not in
14 production.
15 Q. So does methodology refer to something like
16 FLIPSIM and basic assumptions refer to something
17 like, when land goes out of production?
18 A. You could do that. Methodology could be
19 more encompassing, but that could be the
20 quantitative technique to follow after the
21 analysis.
22 FLIPSIM is a computerization of a
23 methodology. Methodology is more encompassing than
24 FLIPSIM. FLIPSIM is a quantitative model.
25 Q. Have you heard that Polopolus and
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
168
1 Richardson used FLIPSIM?
2 A. I have heard that.
3 Q. What method did Grace Johns apply?
4 MR. SAXE: Objection to form. It's
5 unclear what -- the question he's
6 asking.
7 In what context, methodology for
8 what?
9 MR. BURGESS: In the context that
10 we're discussing.
11 Q. (By Mr. Burgess) Did Grace Johns use a
12 methodology similar to FLIPSIM as far as you know?
13 A. That would be a quantitative technique.
14 Methodology, again, would be how she did each step;
15 and she listed very carefully how she generated each
16 number and how she made the trend.
17 So that's -- methodology is more
18 encompassing. She used the computer model FLIPSIM,
19 but, basically, it was in a budgeting analysis
20 format.
21 Q. When you say budgeting analysis format, are
22 you talking about input/output format or a
23 profit/loss format or a balance sheet format or none
24 of the above?
25 A. Profit/loss format, where it is a
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
169
1 convenient mechanism for conducting an analysis over
2 time and tracking cost returns.
3 Q. As you sit here today, do any other
4 questions or areas of inquiry come to mind that you
5 would want to discuss with Polopolus and Richardson?
6 MR. SAXE: Objection to form on the
7 characterization, Counsel.
8 If you're trying to ask
9 Professor Lacewell what he might think
10 would be relevant to curing defects,
11 you could frame the question that way;
12 but as you're framing these questions,
13 it sounds like a proposal for meetings
14 as opposed to deposition questions.
15 I'm not sure why you're framing
16 them as questions that the witness is
17 interested in asking Dr. Polopolus or
18 Richardson.
19 MR. BURGESS: Well, his testimony
20 on the record is clear that, "We
21 repeatedly wanted to meet with them."
22 If they wanted to meet with them,
23 I suppose they have something they
24 want to talk to them about.
25 So that's what I'm trying to have
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
170
1 the witness testify here.
2 A. Whether it's a meeting or whether they
3 developed a document, they could satisfy many of our
4 questions by responding to some of the things that
5 we've mentioned here today.
6 Q. (By Mr. Burgess) And that's what I'm
7 trying to do is put some parameters on the things
8 we've mentioned here today.
9 We've mentioned a lot over the last two
10 days, but you certainly have given me a list here of
11 certain questions or areas of inquiry that you had.
12 And I was just wondering whether, if I had
13 cut you off, there was anything else that you might
14 want from them either in documentary form or by way
15 of inquiry?
16 A. I don't think of anything beyond what we've
17 talked about. This doesn't mean that there's not
18 something, though.
19 Q. I understand. On Exhibit 5 there is a
20 bullet entry about halfway down that says, "Is it
21 likely sugarcane acres would increase outside EAA to
22 offset reduction inside, so plant milling efficiency
23 not reduced."
24 Are you aware of any scenarios or studies
25 or reports that deal with the likelihood or lack
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
171
1 thereof of sugarcane acreage increase outside of the
2 EAA?
3 A. I'm aware that sugarcane acreage outside
4 the EAA has increased. Relative to the projection
5 for the future, I am not.
6 Q. And where has that increase taken place?
7 A. West of the EAA.
8 Q. Do you know -- strike that.
9 Do you have any information with respect to
10 whether there are lands west of the EAA which could
11 be placed into sugarcane production?
12 A. It is my impression that there are lands
13 west of the EAA that could come into sugarcane
14 production; but in all fairness, it can also be in
15 citrus production. So it would be unfair to do an
16 analysis of which is most profitable.
17 Q. Do you know, in terms of acreage, how much
18 land is available for expansion?
19 A. No, I do not.
20 MR. BURGESS: Keith, I have more to
21 go, but I think it would take us some
22 time to spend on that one document.
23 So maybe this would be a perfect
24 time to go on a break.
25 MR. SAXE: Well, it's 10 minutes
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
172
1 of noon, so that's a fine lunch break.
2 (WHEREUPON, a lunch recess was
3 taken.)
4 MR. SAXE: During the lunch
5 break, we were not able to undertake a
6 systematic collection of newly
7 produced or received documents;
8 however, I have brought with us the
9 presentation handout that was
10 delivered to the governing board.
11 That would be a copy of it. I have a
12 color copy of it that I'll provide you
13 today.
14 This would be a produced
15 document, but we need to take it back
16 and get the number control on it.
17 So if you want it marked as an
18 exhibit, what we'll have to do is I'll
19 have to take the document back to
20 Washington and then send it back to
21 the court reporter after we put a
22 control number on it.
23 MS. STINSON: That will be fine.
24 MR. SAXE: The only other
25 documents that I've brought are just
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
173
1 for purposes of reference. They're
2 documents that have either already
3 been produced, like the SWIM plan.
4 MS. STINSON: Right.
5 MR. SAXE: Hazen & Sawyer
6 Contract Completion Report, documents
7 that were either produced or made
8 available for production; and these
9 copies should not come into evidence
10 today.
11 They'll be here for our use in
12 reference; and since they're documents
13 that are already of record in the
14 case, I think any references to page
15 numbers will probably be sufficient to
16 reconstruct what was being referred
17 to.
18 MS. STINSON: Okay.
19 MR. SAXE: Here you go, Donna.
20 MS. STINSON: Thank you.
21 Okay. Before we get into
22 documents, let me ask you a follow-up
23 question regarding some testimony this
24 morning.
25 * * *
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
174
1 R E - E X A M I N A T I O N
2 * * *
3 BY MS. STINSON:
4 Q. You were testifying regarding various
5 adjustments that you believe could be made or are
6 normally made in terms of yield or productivity
7 increases or efficiencies.
8 Have you done any quantification of such
9 adjustments that you would expect the sugar industry
10 and the EAA could make?
11 A. For the EAA?
12 Q. Right.
13 A. I haven't done any independent analysis of
14 adjustments that I would expect them to make.
15 What does exist is some of the material
16 like Hazen & Sawyer put together where they did a
17 raw sugar yield trend over time that showed what the
18 expected change might be with changes and whatever
19 went into making those changes.
20 It can be technology. It can be new
21 varieties. It can be improved processing, but that
22 would be the example of the kind of things that you
23 would expect.
24 Q. Are you speaking of the 2 percent per year
25 productivity growth that was in the report?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
175
1 A. Yes.
2 Q. And do you think it was appropriate to use
3 that growth trend?
4 A. Yes, I think the growth trend supported by
5 that period of data would be appropriate.
6 Q. Let me show you a document that I don't
7 think you produced, but ask you if you've seen it
8 anyway. If you would, identify that.
9 A. I have not seen this document, no.
10 Q. I may ask you about it, anyway. Let's
11 see.
12 A. Is there a way to get a copy of it?
13 Q. Sure. In fact, I think your cohort may
14 want a copy of it.
15 MR. SAXE: Yeah, I'd like to have a
16 copy of it.
17 (WHEREUPON, there was discussion
18 off the record.)
19 MS. STINSON: Can we go ahead and put
20 the sticker on this and have it marked.
21 (WHEREUPON, Exhibit No. 12
22 was marked for identification.)
23 Q. (By Ms. Stinson) Would you identify the
24 document that's been marked as Exhibit 12, please.
25 A. Exhibit 12 is a document that is entitled,
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
176
1 "Economic Effects of the SWIM Plan on Sugarcane
2 Production in the Everglades Agricultural Area of
3 Florida," prepared by, "Ron Lacewell and
4 Lonnie Jones."
5 Q. Okay. You were one of the co-authors of
6 this document?
7 A. Yes.
8 Q. Is this a document that you referred to
9 before we took our lunch break that includes your
10 further analysis of the ability of the EAA to afford
11 the SWIM plan basically?
12 A. This is a document that we developed using
13 secondary sources of data to look at cost of the
14 SWIM plan relative to receipts for sugar.
15 Q. Just to be clear, are there any other such
16 documents that you have prepared or assisted in
17 preparing that have not been previously produced, to
18 your knowledge?
19 A. No.
20 Q. And if you recall, we went through
21 Exhibits 9 and 10, and I believe you indicated that
22 what you have there before you as 12 is a further
23 extension of 9 and 10; is that correct?
24 A. That would be true.
25 Q. Well, let me ask you some questions about
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
177
1 it. Were you asked to develop this analysis and
2 prepare this document?
3 MR. BURGESS: I'm sorry to interrupt.
4 Off the record.
5 (WHEREUPON, there was discussion
6 off the record.)
7 Q. (By Ms. Stinson) Let's start with the
8 first line, "Sugarcane Returns in EAA. "
9 The price per pound of sugar you have as
10 22.18?
11 A. Uh-huh.
12 Q. What does that represent, where is that
13 from, et cetera?
14 A. Okay. The 22.18 cents per pound of sugar
15 is given in executive summary is the average from '86
16 through 1990, which is five years from the Sugar &
17 Sweetner Report, which is dated June 1992, less one
18 penny for transportation of the sugar.
19 Q. How did you determine the one penny for
20 transportation?
21 A. The one penny for transportation was a
22 value that was selected in discussions between
23 Dr. Johns and Dr. Lord, where Dr. Lord works for
24 Economic Research Service USDA, and is an author of
25 the Sugar & Sweetner reports.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
178
1 Q. So the 22.18 -- excuse me.
2 The 23.18 cents per pound is a figure for
3 raw sugar?
4 A. Right.
5 Q. Where?
6 A. New York No. 14 market. That will be in
7 the Sugar & Sweetner Report.
8 MR. SAXE: Which is right here.
9 Q. (By Ms. Stinson) Can you tell me in that
10 report what page -- is that the July '92?
11 A. As a matter of fact, he didn't come up with
12 the March. It's in March, and that's July. So I do
13 not have a copy of that report.
14 Q. Does the July report have similar numbers?
15 A. No.
16 Q. So it's in the March report?
17 MR. BURGESS: March '92, Sugar Report.
18 THE WITNESS: Yes.
19 MR. BURGESS: I'm sorry. Did you say
20 average from '86 to '90?
21 THE WITNESS: Yes.
22 Q. (By Ms. Stinson) Was there any trend
23 associated with that?
24 A. I didn't work a trend. I did a simple
25 average.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
179
1 Q. Why did you select New York Market 14?
2 What does that mean?
3 A. Because in the Sugar & Sweetner Report
4 there is a discussion that that is the basis from
5 which sugar in Florida is traded.
6 Q. And the one cent a pound transportation was
7 based on discussions, not some data that you
8 reviewed; is that true?
9 A. That's true.
10 Q. And to get from price per pound to gross
11 returns per acre, what did you do?
12 A. Again, the same five-year average was taken
13 and using sugar production on a per acre basis.
14 We then calculated a simple average to give
15 us yield per acre, multiply the yield per acre times
16 this price per pound.
17 Q. There is a bar graph about the sixth or
18 seventh page called, "Average Yield of Sugar per
19 Harvested Acre, '86 to '90"?
20 A. Yes.
21 Q. Is that the information you used?
22 A. Yes.
23 Q. So you multiplied 22.18 times 7,597; is
24 that correct?
25 A. Yes.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
180
1 Q. Why did you choose a five-year time period
2 for averaging?
3 A. Five years is fairly typical for census of
4 Ag to bring in their information. They do a census
5 every five years. When average yields were being
6 developed for the farm program, they used five-year
7 averages. So five years seemed like a good time.
8 Q. "Costs Associated with Sugarcane in EAA,"
9 you have 17.87 cent production in processing costs.
10 Do those figures graphically depicted on a
11 table or graph that's called, "Sugar Production and
12 Processing Cost Per Pound"?
13 A. Yes.
14 Q. And is that further broken down then -- I
15 don't know -- about five pages from the end called,
16 "Sugarcane Production and Processing Costs"?
17 A. Yes.
18 Q. Okay. You say this information is from the
19 Sugar & Sweetner Report '86-'90 average.
20 Is that, again, the March report?
21 A. That's the June report, 1992.
22 Q. Why did you use different reports?
23 A. Because the June report didn't have
24 prices. The June report does have cost production
25 from the USDA reported by year, and it was available
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
181
1 in that report.
2 Q. Can you show me in that June report where
3 you got those numbers.
4 A. Let me remind you, they're a five-year
5 average from 1986 to 1990.
6 Q. Well, let me refer you back to Exhibit 12
7 to the page immediately following that table.
8 Following --
9 A. Following.
10 MR. SAXE: The pages may be in
11 different order, Counsel.
12 MS. STINSON: They are in
13 different order.
14 Q. (By Ms. Stinson) There's a table called,
15 "Cost of Sugar Production and Processing in the
16 EAA"?
17 A. Uh-huh.
18 Q. It says at the bottom, "Source,
19 Sugar & Sweetner Report Situation and Outlook
20 Report/June '92."
21 Is that the information that's gone into
22 the page that's in bold type called, "Sugarcane
23 Production and Processing Costs"?
24 A. Yes. And these numbers are taken directly
25 out of the June report.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
182
1 Q. Is this the table -- the table that's a
2 half-page table, is the smaller print, is that just
3 a Xerox copy of what is in the June report?
4 A. It's not a Xerox copy. It's in a
5 spreadsheet that I took out so I could let it do the
6 averaging, but it's an exact duplicate for those
7 items that are included here.
8 Q. Are there items of costs of sugar
9 production and/or processing that you have not
10 included?
11 A. I did not include a return to land that is
12 included in the June report.
13 So what I've got here would be a cost
14 production that doesn't include any cost against the
15 land resource.
16 Q. Why did you omit that cost?
17 A. Because returns to land is going to be a
18 residual that is very typical in production
19 economics when you're developing estimates that you
20 work out a return to all the factors of production
21 and come down and this would be the residual that's
22 left after you've paid all of the other factors of
23 production.
24 And it can vary; and it does vary, year by
25 year.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
183
1 MR. SAXE: Off the record.
2 (WHEREUPON, there was discussion
3 off the record; and
4 the requested portion of the
5 record was read by the
6 court reporter.)
7 Q. (By Ms. Stinson) I'm going to ask you to
8 walk me through that perhaps step by step.
9 What do you mean by "a residual"?
10 You're not talking to an economist.
11 A. Land is one of the resources that, of
12 course, we have for the production of agricultural
13 products. Land has a value.
14 So in the work that I have done, what I do
15 is I develop estimates of returns to land; and
16 that's what this process will do.
17 And it's going to take out the cost for the
18 fuel, the cost for the labor, the cost for the
19 fertilizer, the seed, et cetera, et cetera.
20 And you take the gross revenue, you
21 subtract out all these other costs and you subtract
22 those; and what you've got left, will go to factors
23 of production that you've not put a cost for above.
24 And what I leave out is land.
25 So that says I've paid for everything but
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
184
1 this one resource, land.
2 Now, what's left, is the money that will go
3 to land. So land gets to capture everything's
4 that's left and that's the return to that factor of
5 production. And it's calculated as to what's left
6 after you've paid all your cash expenses to all the
7 other things you had to buy.
8 Q. Why is the return to land not relevant in
9 determining your analysis here? Are you telling me
10 that it's not relevant?
11 A. It's relevant, and what I want to know is
12 what it is, exactly. I don't want any estimates. I
13 want to determine exactly what the return to land is
14 so that I know exactly how much money is left that
15 would be rent to that resource.
16 Q. Okay. Let me back up a minute here, too,
17 on the price per pound; and there's a bar graph here
18 "price received per pound of sugar."
19 A. Okay.
20 Q. You have the loan rate as 18 cents,
21 correct?
22 A. Yes.
23 Q. And then you have an additional 2 cents on
24 top of that as price support?
25 A. No. That 2 cents is a part of the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
185
1 18 cents.
2 Q. Okay. "Supply controlled U.S. price at
3 21.19 cents"?
4 A. That takes the penny off of transportation,
5 yes.
6 There is a correction I need to make as I
7 look at this. The price that's listed in these
8 different places is a price for the raw sugar plus
9 the molasses, Bagass, and other byproducts.
10 So what we have is 21.1 cents for the raw
11 sugar; that is, after you take a penny off of
12 transportation.
13 Q. Okay. And that is a five-year average from
14 the March report?
15 A. Yes.
16 Q. Since that's been found, can you identify
17 for me in that report where that number is?
18 MR. SAXE: Off the record.
19 (WHEREUPON, the witness and
20 counsel conferred.)
21 Q. (By Ms. Stinson) I'm looking at Page 16 of
22 the -- what is it, the June or am I looking at
23 March? Can I look at that page?
24 A. March, March.
25 Q. The March '92 Sugar & Sweetner Report, and
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
186
1 I don't see a 21.19. I see circled a "21.57
2 for '91"?
3 A. The 21.91 is an average over five years.
4 Q. Okay. For the years --
5 A. -- '86 through '90.
6 Q. Why did you not include '91?
7 A. Because I didn't have production costs data
8 for '91.
9 Q. Those have only been published through '90;
10 is that correct?
11 A. That's correct. The same information is
12 duplicated in the materials that you received from
13 Carl Woelche, also, in that deposition.
14 Q. Okay.
15 A. See, you've got copies of all of this in
16 his material.
17 Q. Okay. And then on top of that you have the
18 figure of 99 one-hundredths of a cent for basically
19 by-products --
20 A. Yes.
21 Q. -- as I understand it?
22 A. (Witness nods head.)
23 Q. From where is that figure?
24 A. It's from the Sugar & Sweetner Report.
25 Q. Are you talking June or March?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
187
1 A. I believe I got this one from June. I'll
2 have to find it. June.
3 Q. That's -- was that not in the March?
4 A. It's in the June. If it's in the March, it
5 would be identical.
6 Q. Can you tell me what page in June?
7 A. 33.
8 Q. May I take a look at that?
9 A. (Witness complies.)
10 Q. When you used the term "credit" in that
11 instance, can you tell me what that means?
12 Are these products sold by the farmers or
13 the mills? What do you mean by "credit"?
14 A. Credit is what is received for these
15 by-products which will be molasses, Bagass and
16 other -- and in this case, the USDA has broken this
17 back down into a per pound of sugar basis; and it
18 represents an income to sugar.
19 Q. Are these by-products then sold by someone?
20 A. They would be sold by -- probably through
21 the mill level. The truth is, I don't know exactly
22 whether it was sold.
23 So let me just say this: Credit is
24 received to the sugar industry for a product that's
25 sold.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
188
1 Q. Do we know if there should be any discount
2 for transportation costs in that figure?
3 A. If there is supposed to be a discount for
4 transportation costs, it's probably -- I would
5 anticipate that it's part of the audited cost in
6 returns data that's done by Economic Research
7 Service of the USDA. Where it will be captured in
8 either the variable costs or that the -- generally
9 administration or other places.
10 Q. But the transportation costs for the raw
11 sugar is not captured in any of those places,
12 correct?
13 A. Well, it is captured. The transportation
14 cost for the raw sugar, we've already put another
15 penny in there. Plus it is captured in the
16 processing cost as a -- one of the items that's
17 included there.
18 And in the discussion with Ron Lord, he
19 said that -- and let me find my breakdown of
20 processing, and I'll tell you exactly where he is.
21 Fixed expenses, part of -- no, it's in
22 marketing. I know it's in marketing. Part of the
23 marketing expenses that is included has a charge of
24 about -- these are based on a period of time, but
25 there is something less than another -- one penny
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
189
1 more that's included there for transportation
2 costs.
3 Q. Let me get this straight. You're saying
4 that in the line item which you call "variable cash
5 expenses for processing," there is included a
6 transportation cost; is that correct?
7 A. I sure am. It's under the topic
8 "marketing."
9 Q. Let me clarify that. If you look at the
10 bold-type page, that line, the 4.88 cents --
11 A. Yes.
12 Q. -- it says, "very low cash expenses," and
13 the very first thing listed is transportation?
14 A. Right.
15 Q. And, so, is there transportation and then
16 transportation again within marketing? Is that what
17 you're telling me?
18 A. This would be that part of the marketing
19 and maintenance that is included. Under "variable
20 expenses," you see "marketing, maintenance, labor,
21 transportation."
22 Q. Right. Those are items that will add up to
23 the 4.88.
24 A. Right. Of that 4.88, a part of that is
25 transportation. And so what we've got is -- where
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
190
1 is my processing?
2 Q. Let me ask you another question before we
3 go on. What transportation is that? Does that get
4 it from Florida to New York? Is that what you're
5 telling me. Or does that simply get it to the mills
6 from the fields?
7 A. That gets it from the mills to the
8 processing plants, and that is the audited value --
9 that's what they actually expense.
10 So that would be a cost that was incurred
11 by the EAA to move mill sugar to processing.
12 Q. But, then, to get it from processing on up
13 to the market in New York is another expense?
14 A. Well, it may not go to the market in
15 New York. What we did was look at the possibility
16 of making sure we covered all these costs.
17 Q. Let me double clarify again. You have
18 under that 4.88 cents, "transportation and
19 marketing"; but you mentioned earlier that there was
20 transportation within marketing?
21 A. We also have to transport the cane. So
22 some of that is cane transportation.
23 Q. To the mill?
24 A. To the mill. And then within the market
25 factor, a component of that is also transportation.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
191
1 And that's to go from the mill to the processor.
2 Q. And you have included in or assumed an
3 additional transportation cost from the processing
4 to the market; is that a fair statement?
5 A. From the mill to the processing.
6 MR. SAXE: Counsel, for clarification,
7 is there a distinction you're trying
8 to get at between processing and
9 refining? The mills are frequently
10 characterized as processors of the raw
11 sugar --
12 MS. STINSON: Right.
13 MR. SAXE: -- or of the
14 cane-producing raw sugar, refiners
15 turn raw sugar into refined sugar.
16 Maybe if we could stick to that
17 terminology, it will help to clear up
18 this line of questioning.
19 MS. STINSON: Well, I'm not sure.
20 Q. (By Ms. Stinson) You have subtracted a
21 penny off the price that you have in the price
22 component of your cost for transportation, correct?
23 A. We subtracted another penny for
24 transportation from the mill to the refinery.
25 But including in the costs that are already
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
192
1 accumulated, we have a cane transportation cost in
2 the field to the mill. And, in addition, under
3 "marketing," there is a transportation allowance
4 that was actually paid in the EAA to move cane from
5 the mill to the refineries.
6 So, yes, in addition to moving the cane
7 from the field to the mill; and, in addition, to
8 what's already in this report right here of
9 Sugar & Sweetner where they have a market charge
10 under "marketing of transporting the sugar from the
11 mill to the refinery," we've got another penny.
12 Q. And that is for transportation from the
13 mill to the refinery?
14 A. That's where the penny we had was -- is
15 another penny from the mill to the refinery, yes.
16 Q. That you have taken off the price received?
17 A. Yes.
18 Q. All right. Well, let me just ask you
19 then: Why did you take that penny off the price
20 received?
21 A. What we were trying to do; and, again, we
22 were working with Ron Lord -- Dr. Lord at ERS.
23 The New York sugarcane price is the price
24 delivered. So the seller pays the transportation
25 costs, that's if you deliver it to New York.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
193
1 Now, the sugarcane in the EAA goes to
2 processors, refineries in the EAA, 20 percent. Some
3 goes to the terminal; some goes to Savannah,
4 Georgia; some goes to New York.
5 And what we were doing is taking a
6 conservative side of this thing and saying, "We're
7 not sure what kind of prices the mills get."
8 We don't know what all kind of deals are
9 going. So we're going to take our best
10 approximation in conjunction with the advice of
11 Dr. Lord. "What would it take if I did the sugar,
12 if the mill sold sugar in New York and paid the
13 transportation costs?"
14 And that would, then, be an estimate of
15 delivering the cane to New York.
16 Q. That is not hard data maintained by ERS?
17 A. Apparently not.
18 MR. BURGESS: Rather than ask her to
19 read back that question, can I just ask you,
20 you said 20 percent goes where and I
21 didn't catch it?
22 THE WITNESS: 20 percent is
23 refined in the EAA.
24 Q. (By Ms. Stinson) Back under the executive
25 summary to get to the $1,356 costs per acre of
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
194
1 harvested sugarcane, you multiplied 17.87 cents
2 times -- whatever that number was -- the pounds per
3 acre, 7,597 pounds per acre; is that correct?
4 A. Yes.
5 Q. Does your analysis here assume or does it
6 matter that it is an integrated market that the
7 mills and farms are owned by the same entities?
8 A. It doesn't necessarily assume that. What I
9 could say is that that is an important factor, that
10 there is the integration.
11 And what this assumes is that the mills
12 will be paid for the factors of production. Each
13 will get a payment into the factors of production
14 exactly as laid out.
15 In the Sugar & Sweetner Report, once all
16 those factors of production are paid, then that
17 means the mill is economically viable and can
18 continue. However much they want to go ahead and
19 feed back through the land is sort of a decision.
20 If there's an opportunity for them to retain more of
21 the returns at the mill level, they can do that.
22 As returns to sugarcane may be approached
23 at the farm level, there are opportunities, then,
24 for this to be the maximum amount that could be a
25 return to land to keep the land in production to
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
195
1 keep the mills operating, and the mills still would
2 return for their factors of production in
3 agricultural farmland to be returned -- get a return
4 to its factors of production.
5 Q. On the production costs you have "capital
6 replacement." What does that include?
7 A. In this case for the numbers reported in
8 the Sugar & Sweetner Report, June 1992, this would
9 be the amount that is required to replace tractors,
10 equipment, planters, and capital items.
11 So it's a charge or return to those capital
12 items; and that will be, then, the costs for
13 replacement.
14 Q. Okay. I notice on the table that you have
15 from the June report, there are no numbers for that
16 item for '86 and '87? Is that correct, or I just
17 have an incomplete copy?
18 MR. SAXE: Off the record.
19 (WHEREUPON, there was discussion
20 off the record.)
21 A. Oh, '86, '87 reporting that, as a matter of
22 fact -- well, I've got a capital replacement here.
23 Let me look again.
24 MR. SAXE: Professor Lacewell, do
25 you want the use of a calculator?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
196
1 THE WITNESS: No. I've got to
2 take a look at that.
3 A. Page 33. If you'll look at Page 33.
4 Q. (By Ms. Stinson) I don't have it.
5 A. If you'll look at the top. This is where
6 the data is abbreviated down to cost per pound, and
7 they consolidated the production cost and processing
8 costs into fewer number of items. What you're
9 seeing there is what's on this table here. And if
10 you'll notice, there is nothing reported on that
11 line until 1988.
12 Q. Okay.
13 MR. BURGESS: That's Page 33 of what
14 report?
15 THE WITNESS: The June 1992
16 Sugar & Sweetner Report.
17 Q. (By Ms. Stinson) The cost for operating
18 capital, is that the cost of borrowing money
19 basically for day-to-day expenses?
20 A. Yeah, that's a good definition.
21 Q. Operating capital? And what is "nonland
22 capital"?
23 A. This would be more intermediate-type debt,
24 which would be machinery, buildings.
25 Q. So it's debt on those sorts of things?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
197
1 A. I would have to read back again in more
2 detail to see what is included in each one of
3 those. What was the question?
4 Q. What is "return to nonland capital"? Is
5 that debt, or what is it?
6 A. That's a payment for nonland capital, which
7 would be -- it could be a payment against that
8 factor of production. It could be -- it may include
9 depreciation.
10 Q. May I see Page 33 of the report.
11 A. (Witness complies.)
12 Q. Thank you.
13 Okay. There is a line item on Page 33
14 which says "NA" all the way through, but it's called
15 "unpaid labor."
16 Do you know what that is?
17 A. No.
18 Q. There is also a footnote here under "Their
19 Total Economic Costs," which says, "excludes
20 interest, fixed cash expenses." Can you tell me
21 what that means?
22 A. Well, I don't know what fixed cash expenses
23 are offhand as fixed costs and variable costs. And
24 they've got some returns above. What the -- the
25 nonland capital, in economics we want to return to
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
198
1 factors of production. The nonland capital, what
2 you've got is an investment in the machinery.
3 Q. Right.
4 A. And so as economists, we say, "Well, if I
5 didn't have this investment in machinery, I could
6 have it in a CD or bank or something."
7 And so we generate a cost against that, and
8 say, "If this money were in an alternative
9 investment, that's were I would be drawing some kind
10 of payment for it."
11 So the nonland capital and the operating
12 capital both in operating in that context of the
13 opportunity cost to that investment being somewhere
14 else, and we're making that investment get a
15 payment. And that's an economic approach to making
16 your resources get a payment back.
17 In this case, on excluding interest, what
18 you can do is look at it from an opportunity cost
19 standpoint where this money would be drawing me some
20 payment somewhere else, and I don't try to work it
21 into a borrowed capital and an interest payment
22 back, but it would still do the same thing.
23 It's a way of approaching what that would
24 either -- what you could end up paying is interest
25 if you actually borrowed it or if you didn't borrow
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
199
1 it and you just went and bought a tractor or a piece
2 of machinery, but because you put that money into
3 that piece of machinery, that money needs to be
4 making money back.
5 Q. And this footnote means that any return you
6 might otherwise be able to get on that money is not
7 included in these figures?
8 A. I can't say that it means that. I think
9 the nonland capital could be your opportunity cost
10 of that capital being an alternative investment.
11 Q. What's the footnote mean then?
12 A. I can't give you a definitive explanation
13 of what that footnote means.
14 Q. Okay. May I see that again, please.
15 A. (Complies with document.)
16 Q. We have copied and gave to you a document
17 entitled "DF in Settlement Agreement, 20-year
18 Analysis."
19 There is a page entitled, "Calculation of
20 Residual Returns."
21 Let me ask you to assume that this is a
22 document prepared by Hazen & Sawyer --
23 A. Yeah.
24 Q. -- and recently provided.
25 A. Okay.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
200
1 Q. The calculation of residual returns, if
2 you'd take a minute to review that; and then my
3 question is: Is this calculation consistent with
4 the calculations you have done in Exhibit 12 in
5 terms of the approach?
6 A. If I can't say whether or not they would be
7 in here, how they would be included; but basically
8 this would be a similar or analogous type approach.
9 Q. What items are you --
10 A. I don't know what she's including or not
11 including. It might be there. If she used an
12 opportunity cost, actual interest, I'm not sure how
13 some items might be taken care of.
14 Q. Okay. But the general categories you
15 would -- in terms of categories, is this an inclusive
16 list?
17 A. Those are broad categories; but, yeah, they
18 would work.
19 Q. And on the next page is entitled,
20 "Production Costs"; and maybe that will help you
21 answer your other question.
22 Can you tell me whether there is anything
23 not in here that you believe should be in here or
24 the converse?
25 A. Let's see. This table says, "production
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
201
1 Costs, include variable costs of planting,
2 cultivation, and harvest should be included."
3 "Management costs," and I would assume
4 there is a manager and payment made to management,
5 "tangibles tax and current EAA assessment, insurance
6 and general farm overhead."
7 These are consistent with what the
8 Sugar & Sweetner Report is gathering cost return
9 data on and, also, I believe it is in the IFAS
10 budgets, "soil subsidence management," as a actual
11 cost that the farmers would incur to try to have
12 water table management, "real estate, federal and
13 state taxes."
14 I don't know what she means by federal
15 taxes. So, I would say, until I get an explanation
16 on what the federal taxes are she's talking about,
17 I'm not sure if that would be included.
18 Q. Tell me what your concern is with that
19 item.
20 A. Is she including income tax; and in what
21 form, how, and how she calculated, and what bearing
22 does it have on it.
23 Q. Do you believe income tax should or should
24 not be included?
25 MR. SAXE: Counsel, just a
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
202
1 limited objection here.
2 It's a irrelevancy objection so
3 it's preserved, but I wanted to point
4 out for the record that
5 Professor Lacewell has never seen this
6 document before.
7 You're asking, basically, him to
8 speculate on what was intended by the
9 author, we've been told was
10 Hazen & Sawyer, with very summary
11 categorical descriptions.
12 And Professor Lacewell indicated,
13 I think several times, that he'd need
14 to know what specific items are
15 included in those before he could say;
16 but if you want to pursue that.
17 MS. STINSON: I understand.
18 MR. SAXE: Okay.
19 Q. (By Ms. Stinson) With respect to whether
20 or not federal income tax expenditures should be
21 included, however, what were you trying to say on
22 that?
23 A. Well, I'd want to have some more insight
24 into how she was going to handle that in the next
25 report in that your federal income taxes are a
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
203
1 function out of your returns above all these cash
2 costs.
3 And as this returns above cost that you can
4 take off of your gross income change, so does your
5 federal income tax.
6 So the question of how she does that and if
7 these are multi-national or integrated corporations,
8 how is she going to get a grip on that?
9 Q. Okay.
10 A. And from an economic standpoint in
11 depreciation of return to nonland capital would be
12 appropriate.
13 Q. Okay. The next the page is -- can you
14 think of anything that you've included or you
15 believe should be included that would not be covered
16 by the categories on her page entitled, "Production
17 Costs Included"?
18 MR. SAXE: Objection.
19 Again, Counsel, Professor
20 Lacewell doesn't know what's included
21 in these categories.
22 MS. STINSON: I understand.
23 Q. (By Ms. Stinson) But I think the general
24 categories are --
25 A. The general categories look appropriate. I
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
204
1 don't have an itemization, and I'm not -- haven't
2 generated an itemization that I would lay out to
3 compare against this.
4 Q. All right. On processing costs, again, are
5 there things on here that you don't -- that you feel
6 should not be on here, or items you feel should be
7 on here that are not, given limitations expressed by
8 your Counsel?
9 A. Given the limitations of these -- these
10 still could cover a lot of things, but generally
11 they look to me like they cover the items that
12 should be included as processing costs.
13 Q. Given the typo on depreciation?
14 A. On depreciation?
15 Q. Yes. With regard to production and
16 processing costs, are you aware whether or not there
17 is a July USDA publication, I believe,
18 Sugar & Sweetner publication that has a table of
19 costs over a 10-year period?
20 A. That may be June.
21 Q. June. Okay.
22 A. 1992.
23 Q. And that's the information that you have
24 used?
25 A. Sugar & Sweetner Report, yes.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
205
1 Q. This is shooting in the dark.
2 Does this term mean something to you,
3 "WEFA," W-E-F-A? I'm not even sure I have it
4 right.
5 A. What page are you on?
6 Q. It's not on any of this. It was a
7 suggestion made at the meeting about a resource for
8 production and prices and costs, as I understand
9 it.
10 A. WEFA?
11 Q. That's what I heard.
12 A. What's it stand for?
13 Q. I don't know. I'm asking you.
14 A. I don't know what that is.
15 MR. BURGESS: I know.
16 MR. SAXE: No fair.
17 Q. (By Ms. Stinson) That's not something
18 you've used, right?
19 A. Not to my knowledge.
20 (WHEREUPON, there was discussion
21 off the record.)
22 Q. (By Ms. Stinson) Are you aware of a
23 Sugar & Sweetner outlook of July as opposed to June?
24 A. No, I'm not aware of one.
25 Q. Do you believe it important to -- in doing
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
206
1 a 20-year analysis, to look at the effect of soil
2 subsidence on productivity and costs?
3 A. Soil subsidence represents a major issue in
4 the EAA of which I read Mr. Wedgworth's deposition
5 where he says, "It's not a problem and they can grow
6 cane from now into perpetuity."
7 There's a report that's fairly old that
8 shows that had the EAA would have subsided to the
9 point where there's no production by the year 2000.
10 So I think you've got to address soil subsidence and
11 try to get the latest possible information, the best
12 experts that exist to address the issue.
13 I just can't tell you how it shakes out.
14 Q. Okay. Have you or are you undertaking any
15 independent analysis of that issue?
16 A. No, I'm not.
17 Q. Do you believe it important to examine
18 productivity per yield belt?
19 And let me ask you, first, if you know what
20 I'm referring to when I say "yield belt"?
21 A. Yes. If you are referring to the
22 Hazen & Sawyer belts that she built for the EAA.
23 Q. Okay.
24 A. Is that what you're referring to?
25 Q. Yes.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
207
1 A. Yeah, I think it would be a better report
2 with the yield belts in there, yes.
3 Q. Have you looked at the varying returns by
4 yield belts in your analysis?
5 A. No, I have not, other than what she has in
6 the 10-year study.
7 Q. Okay. Is the information regarding yield
8 belts applicable or used at all in Exhibit 12?
9 A. Exhibit 12 is taken directly from the
10 published materials from the Sugar & Sweetner Report
11 and the other documents that we mentioned and would
12 be an average yield across all of the EAA price
13 costs, et cetera.
14 So specifically, no, it is not taken into
15 account differing yield belts.
16 Q. Okay. Let's -- under "Executive Summary"
17 the next heading is "SWIM Plan Costs funded
18 100 Percent in EAA."
19 MR. SAXE: Excuse me.
20 Counsel, if we're going to go
21 back to that document, can we take a
22 real quick break?
23 MS. STINSON: Sure. I don't mind.
24 (WHEREUPON, a recess was taken.)
25 Q. (By Ms. Stinson) Moving right along.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
208
1 "SWIM Plan Costs Funded," I've got to ask
2 you some questions regarding the numbers in that
3 section.
4 "28.5 million per year for 20-year bond
5 amortization." And we may have addressed this
6 somewhat earlier in looking at Exhibits 9 and 10.
7 Let's do that again.
8 There is a bold-type page which says,
9 "STA and BMP costs in EAA," and there is another
10 page, my version, it's two pages later called,
11 "SWIM Plan Costs," subheadings, "STA, BMP's"?
12 A. Yes.
13 Q. Do those pages reflect the information that
14 went into the $28.5 million per year figure under
15 the "Executive Summary"?
16 A. Yes. The SWIM plan costs is 314 million
17 amortized over 20 years at 6.5 percent interest
18 rate.
19 Q. I believe you indicated earlier that the
20 314 is out of the SWIM plan itself; is that correct?
21 A. Yes.
22 Q. Can you find that for me.
23 A. Pieces and parts of it.
24 Q. What pieces and parts you used. You can
25 refer me to page number.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
209
1 A. Page 160.
2 Q. Can I take a look at that, please.
3 A. (Witness complies.)
4 Q. Can you tell me on Page 160 where we looked
5 where the 314 comes from?
6 A. 312 comes design and construction land and
7 O and M. So that gets us through 312.
8 In working with the rest of the
9 information, Page 162 has a cost, and Page 164 has
10 some costs.
11 And this came from here; and, also, from a
12 document that I don't recall the name of, but it was
13 talking about how it funds some of the different
14 options. And there were some other participants in
15 some of the funding of this, which included the
16 electrical power company that had agreed to put
17 various amounts of money into some parts of this
18 program.
19 Q. Okay. On Page 162 there is a chart of
20 costs of monitoring. Is that the number?
21 A. That's another cost.
22 Q. For 2.6 million. Then, Page 164 of a chart
23 of cost of monitoring, EAA district works of 1.5.
24 Are those the costs you're referring to?
25 A. Those would go with the 312. So you add
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
210
1 those together. And then there was some offsetting
2 expenses that would not be against the assessment
3 that the utility company had agreed to pay for some
4 parts of this.
5 Q. Do you recall how much that is?
6 A. I would have to find the document that
7 exactly had that in it. That is a South Florida
8 Water Management District document, but I'd have to
9 go back and find it.
10 Q. You don't recall which document?
11 A. Not exactly, no.
12 Q. Anything other than the utility payment?
13 A. Some of the costs were going to be incurred
14 by the district. That wouldn't be part of the
15 assessment. And I can't be specific; but I was
16 thinking instead of Florida, it had some items in
17 there also.
18 Q. So you added 312 plus 2.6 plus 1.5 from the
19 SWIM plan and subtracted some offsetting payments;
20 is that correct?
21 A. That's correct.
22 Q. But you can't right now tell me what those
23 offsetting payments are?
24 A. Not exactly. I know the electric company
25 and South Florida was one participant.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
211
1 Q. And I believe you told me earlier that the
2 6.5 percent interest was a figure that you
3 determined; is that correct?
4 A. We looked at that and there was an
5 accountant that said that that may even be high, but
6 for current 20-year bonds on a viable entity like
7 that, that that was a value that we selected, yes.
8 Q. What accountant said that might be high?
9 Do you know?
10 A. He is -- yeah. I don't recall his name.
11 THE WITNESS: Keith, you may have to
12 help me with the name of the --
13 Q. (By Ms. Stinson) Mr. Hirschhorn or
14 something like that?
15 A. Yes.
16 Q. Is that something he told you verbally or
17 in writing? Do you recall?
18 A. On the telephone.
19 Q. That would be assuming, would it not, that
20 these bonds would have as collateral the assessments
21 on the EAA land?
22 MR. SAXE: I'm going to object on
23 asked and answered grounds. I think
24 we covered this ground yesterday.
25 Q. (By Ms. Stinson) Or this morning. Can you
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
212
1 answer my question?
2 A. No. I'm not a bond expert. So I really
3 can't tell you what it would take to get that
4 rated.
5 Q. Okay. Now, the BMP's for sugarcane land,
6 you have here at 86 cents per acre; and I believe
7 this morning when we were looking at
8 Exhibits 9 and 10, you told me something in the
9 nature of $11.50 per acre.
10 A. Yes.
11 Q. Can you tell me the source of the 86 cents
12 per acre?
13 A. The 86 cents is the figure developed from
14 the contract let by the South Florida Water District
15 to Brown & Caldwell to develop estimates of least
16 cost BMP procedures.
17 Q. Do you have that here? Can you tell me
18 exactly where that figure came from.
19 A. It came from the report that
20 Brown & Caldwell has submitted to the
21 South Florida Water Management District on
22 January 5th, 1993.
23 Q. Can you locate in that document where that
24 number is?
25 A. I don't know what page that is, but it's
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
213
1 that table right there.
2 Q. Table B2. Is it your understanding that
3 Table B2 in the Brown & Caldwell Report is the cost
4 for BMP's to remove 25 percent or to reduce
5 phosphorus discharges by 25 percent?
6 A. It is my understanding that that would be
7 the cost per acre in sugarcane to reduce phosphorus
8 discharges by a high level of confidence of
9 25 percent, yes.
10 Q. Okay. I don't see the figure of
11 86-cent per acre. Can you tell me where that comes
12 from?
13 A. As a matter of fact, it's 83 cents.
14 Q. That figure does not include the operation
15 of maintenance; is that correct?
16 A. I'm going to tell you what I think because
17 we don't have a complete copy of this report and
18 what we've got is a partial copy.
19 And the back of the report is missing,
20 perhaps.
21 MR. SAXE: Counsel, I have a copy
22 of that. It's got some marks on it,
23 but it may be more complete.
24 THE WITNESS: Just a minute.
25 MR. SAXE: Okay. Never mind.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
214
1 MS. STINSON: Give him a chance.
2 A. Let me refer you, again, to Brown &
3 Caldwell Consultants, January 5th, 1993. This is a
4 report submitted by them to the South Florida Water
5 Management District, "Table 15 has least cost BMP's
6 to achieve target phosphorus low reductions of sugar
7 for 25 percent."
8 They list the best management practices
9 that could be followed and they give a net cost per
10 acre of what it would take to achieve
11 25 percent reduction in phosphorus discharge.
12 Q. (By Ms. Stinson) Okay. Do you know
13 whether that figure includes both capital
14 expenditures and operation and maintenance?
15 A. My impression is that it does include
16 capital expenditures and operation and maintenance.
17 Q. In the analysis you've done here, you have
18 held costs as well as revenues constant over the
19 20 years; is that correct?
20 A. Yes. But that's not a 20-year analysis,
21 Counselor. This is an analysis done based on five
22 years of average data from '86 to 1990 and
23 everything is held constant.
24 Q. Okay. But what you are saying is that
25 these will be the costs, to both the costs and the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
215
1 revenues, to per acre of sugarcane over the period
2 of the bond which is 20 years, correct?
3 A. I didn't draw that conclusion or make that
4 statement. It's a view of what it looks like
5 today. If revenues go up faster than cost, they
6 could more than pay for the residual. There's more
7 residual there to take care of these kind of
8 things.
9 If alternative costs go up faster than
10 revenues, the alternative could occur. This is a
11 snapshot of database for five years.
12 Q. Okay. Then you get -- you look at the
13 number 465,341 acres. That's all acres, whether
14 harvested or not, and whether cane or other types of
15 agriculture, correct?
16 A. What page are you on?
17 Q. We'll have to number these next time.
18 A. What's at the top?
19 Q. Two pages, one that says, "STA and BMP Cost
20 in the EAA," and the other says, "STA and EAA Cost."
21 A. Okay. I'm looking at "STA and EAA Acres."
22 Q. Okay. If you would, also find the one that
23 says, "STA and BMP Costs." In my version it comes
24 about five pages later.
25 A. (Witness complies.) Okay.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
216
1 Q. What you've done to get the 61.25, you have
2 allocated to every acre of agriculture in the EAA?
3 A. That's true.
4 Q. Regardless of what type of crop or whether
5 it's actually harvested, correct?
6 A. That would be total extra cropland in the
7 EAA after the STA's, yes.
8 Q. Where did that number come from, 465,341?
9 MR. SAXE: I'm going to object. I
10 believe these questions have been
11 asked and answered.
12 MR. BURGESS: It's a different
13 number.
14 MS. STINSON: It's a different
15 number for what we did on
16 Exhibits 9 and 10.
17 MR. SAXE: Right. Different
18 because it's in this document; is that
19 your position?
20 MS. STINSON: No. I mean, the
21 actual numbers are different, I
22 believe.
23 MR. SAXE: Okay.
24 A. If you'll go toward the end of this report,
25 there is a set of tables; and what we did is we
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
217
1 started with the 456,6 -- let me get you on the
2 right page. "The Procedures for Estimating Cost in
3 Returns in the EAA."
4 Q. (By Ms. Stinson) Right. I see that.
5 A. If we come down to base acres, these were
6 taken from surveys Hazen & Sawyer did, 456,641
7 acres. This is total acres of cane production.
8 Skip one, two, three numbers, and you'll find
9 43,400 acres. That's acres and vegetables -- typo --
10 and sod before STA's.
11 We add the 456,641 to the 43,400, which
12 both came from Hazen & Sawyer based on their survey
13 data, and we get 500,041, total acres of cropland in
14 the EAA before STA's are calculated and that's a sum
15 by taking the total cane acres, gross acres, and
16 total vegetable and sod acres. And that will agree
17 back with your STA and EAA acres earlier.
18 Q. Okay. Well, earlier when we were looking
19 at Exhibits 9 and 10, you used, as I recall,
20 somewhat different numbers. I have written down the
21 figure of 522,000 acres total.
22 A. Exhibits 9 and 10?
23 MR. BURGESS: It's the last page of
24 Exhibit 10.
25 A. I'm not sure of the source of 522,000
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
218
1 acres, to tell you the truth -- and this was working
2 papers. And what we did is went back to where we
3 could get a grip on some numbers that we could trace
4 all the way through. And so that's what we did on
5 this report that was put together, where we knew
6 where every number came from.
7 Q. (By Ms. Stinson) Well, can you find it in
8 the Hazen & Sawyer Report for me, though, the 456
9 and the 434?
10 A. As a matter of fact, this shows the
11 522,000 acres in Hazen & Sawyer. These are not
12 exact numbers, but they'll -- I will get you the
13 exact numbers. If you'll look at that table right
14 there.
15 Q. (By Ms. Stinson) 21 in Hazen & Sawyer has
16 the 522?
17 A. And from the 522, they then have sugarcane
18 at 457,000 acres, which is rounded from 456,641;
19 vegetables are 21,000 acres; sod is 23,000 acres.
20 There's also 11,000 acres of pasture; and
21 10,000 acres of other Ag uses of which I took out of
22 the cropland sector.
23 Q. Okay. You have allocated the 61.25 of the
24 total STA annual cost among all the crop acres; is
25 that correct?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
219
1 A. Yes. What I've allocated is 28.5 million
2 across the 465,341 cropland acres after STA's are
3 built.
4 Q. Okay.
5 A. The result of that is a per cropland acre
6 appropriation or allocation of $61.25.
7 Q. Okay. To which you add 86 cents an acre
8 for the BMP's?
9 A. For sugarcane.
10 Q. For sugarcane?
11 A. Yes.
12 Q. And you have not added the cost of BM --
13 you have not analyzed the cost to the vegetable
14 producers, correct?
15 A. We didn't address vegetables or sod.
16 Q. Or sod. Why not?
17 A. Because the majority of the acres are in
18 sugarcane. We may do that at a later date. No
19 particular reason.
20 Q. Have you made a determination as to whether
21 the vegetable or sod acres can support the cost of
22 STA plus BMP costs in the EAA?
23 A. We have done analyses. We haven't made a
24 budgeting analysis similar to this, and all we'd
25 have to go on is the IFAS crop budgets for
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
220
1 vegetables.
2 By looking at those, you can make a
3 determination of if there is enough residual there
4 to cover some costs.
5 Q. And you haven't done that?
6 A. I haven't done that, specifically.
7 Q. The 62.11 says, "per cane acre with STA and
8 BMP if allocated uniformly across EAA."
9 What does that mean, "if allocated
10 uniformly across the EAA"?
11 MR. BURGESS: Where are you?
12 A. Well, mine says --
13 Q. I'm looking at a different page.
14 A. Are you? "STA and BMP costs in EAA."
15 Q. Well, maybe yours is just a different
16 type. Okay.
17 A. "$62.11 per cane acre for STA and BMP."
18 Q. Right.
19 A. That's what I've got.
20 MR. BURGESS: "If allocated
21 uniformly across EAA"?
22 MS. STINSON: Yours has been
23 edited.
24 A. That just says if you took every cane acre
25 and divided the total number of cane acres by the --
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
221
1 if you added the 61.25, which is all cropland acres,
2 says everybody gets to pay 61.25 or 61.25 would be
3 the 28.5 million allocated across 465,000 acres.
4 MR. BURGESS: Would he --
5 A. And then just for cane, if we added
6 86 cents, we would get $62.11 that are applicable to
7 gross cane acres.
8 Q. (By Ms. Stinson) Okay. Gross cane acres,
9 not harvested cane acres?
10 A. That's right.
11 MR. SAXE: One moment please.
12 (WHEREUPON, there was discussion
13 off the record.)
14 A. I made the statement that it would be 62.25
15 per cropland acre for the STA's, and it would be
16 61.25 per cropland acre for STA's.
17 Q. (By Ms. Stinson) Okay. And that is for
18 all crops?
19 A. Yes.
20 Q. And the 62.11 is the cost per gross cane
21 acre assuming that vegetables and sod pay their
22 61.25 plus BMP costs, correct, whatever that may be?
23 A. Yeah.
24 Q. And then you have that after the STA's of
25 that 465,341 cropland acres 435,033 will be our
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
222
1 gross cane acres, correct?
2 A. Yes.
3 Q. So you multiply those gross acres times the
4 62.11 to get $26.7 million allocated of STA cost
5 allocated to the sugar producers, correct?
6 A. If you're going to multiply 62.11 times
7 430,533 gross acres of cane, you get $26.7 million
8 of annual cost for STA's and BMP's against an acre
9 of cane land.
10 Q. Okay. Which you then divide by the number
11 of acres you would anticipate actually being
12 harvested?
13 A. Yes.
14 Q. Of 322,900; is that correct?
15 A. Yes.
16 Q. For an assessment per harvested acre of
17 $82.82; is that correct?
18 A. That would give you a cost per harvested
19 acre for STA's and BMP's, and it's per harvested
20 acre of cane.
21 Q. And, again, that is assuming that the
22 vegetable and sod people pay their share?
23 A. That's equally apportioning the cost of
24 STA's across the entire cropland in EAA.
25 Q. Per acre?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
223
1 A. Per acre.
2 Q. But you have not determined whether the sod
3 and vegetable producers essentially can afford to
4 pay their share?
5 A. We have.
6 MR. SAXE: Objection to form.
7 Q. (By Ms. Stinson) You can answer anyway.
8 A. We haven't pulled the crop and livestock
9 for the crop budgets up to do an analogous study for
10 vegetables or sod.
11 Q. Then back on the "Executive Summary," you
12 have a figure of, well, $83 SWIM cost. I presume
13 that's just the rounding of the $82.82 cents?
14 A. Yes.
15 Q. Calculated as 1.09 cents SWIM cost per
16 pound of sugar?
17 A. That would be the $82.82 divided by yield.
18 Q. By yield, that's the 7,597 pounds per acre?
19 A. 7,597, yes.
20 MR. BURGESS: Where is that figure
21 from?
22 MR. SAXE: Excuse me, Counsel,
23 are you asking on what date?
24 MR. BURGESS: In this document.
25 MS. STINSON: Right there.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
224
1 MR. SAXE: Which figure?
2 MR. BURGESS: The 7,597.
3 MR. SAXE: That's on the table
4 average yield of sugar per harvested
5 acre 1986 to '90.
6 MR. SAXE: Off the record.
7 (WHEREUPON, there was discussion
8 off the record.)
9 Q. (By Ms. Stinson) Based on your analysis of
10 the returns and costs associated with sugarcane, is
11 your conclusion that the returns to the grower are
12 $327 per acre?
13 A. This analysis looks at what can be returned
14 to the grower if needed. So in all cases, not all
15 the 327 is returned to the grower. In those cases
16 where it's integrated, where you have the
17 cooperative or where you have a company that has
18 both the production and the milling, they can
19 allocate it anywhere they want; but it's equivalent
20 to $327 per acre of land.
21 Q. Again, that's an average across all yield
22 belts, correct?
23 A. That's generated from the Sugar & Sweetner
24 Report's statistics that are published from '86
25 through 1990. So it would be all of the EAA.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
225
1 Q. The returns per acre used in the
2 Hazen & Sawyer Report are significantly different
3 from the returns you have used in your analysis; is
4 that correct?
5 A. She gets lower returns, yeah.
6 Q. Can you explain the discrepancy.
7 A. Not all the discrepancy, but some of the
8 discrepancy is attributable to the way she begins
9 inflating costs and handling costs and returns and
10 what she has is, for several of the cases, the costs
11 are increasing faster than returns. So they begin
12 to collapse on each other.
13 Q. What costs are inflated by Hazen & Sawyer,
14 the production -- I mean, generally those within the
15 production and processing categories?
16 A. Yes.
17 Q. Can you tell me how those are inflated? Is
18 there an across-the-board percentage, or does it
19 vary by labor and other components?
20 A. I can tell you when I look at this.
21 Q. Okay.
22 A. Costs for milling were inflated by
23 2.8 percent per year, and inflation in the cost of
24 increasing productivity is estimated 10-year average
25 produced here. Prices -- this is coming off of
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
226
1 Page 4-11, Page 4-12.
2 Q. Of what version of the report?
3 A. The "Contract Completion Report," dated
4 October 1992. The costs of production are inflated
5 based on the cost of the production indices reported
6 by USDA and the "Agricultural Prices Publication."
7 Q. What is the inflation rate there?
8 A. She doesn't give it, and my recollection --
9 I recall it to be 3 percent. I don't see the exact
10 value she used, but I recall it as 3 percent.
11 Q. Essentially, then, is what you're saying is
12 that she inflated the processing costs 2.8 and the
13 production cost 3 percent, as you recall?
14 A. What did I say?
15 Q. You said, "cost of milling." Does that
16 mean processing?
17 A. Yeah, milling.
18 Q. Are you saying that it is inappropriate to
19 inflate these costs in a projection or simply that
20 you have not done a projection but a snapshot view
21 which is a different approach?
22 A. When you do the inflation, you've got to be
23 careful that you don't throw a bias into this that
24 can bias it either direction. So that's what I'm
25 saying about using rates of inflation.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
227
1 What we see is that with inflating costs,
2 we have a reduction in per acre profits over time.
3 Whether or not that's appropriate or not depends
4 upon whether your efficiencies, production prices,
5 and other things are moving the same direction.
6 And to use just straight rates of
7 inflation, just on the input mix you have, allows
8 for absolutely no adjustments in the production
9 process. There will be no changes. It assumes
10 there will be no changes in any of your inputs or
11 input mixes or anything like that. And that locks
12 in a fixed input/output ratio.
13 Q. Hazen & Sawyer also inflated productivity
14 by 2 percent, correct?
15 A. They had raw sugar and per ton of sugarcane
16 increasing it 2 percent.
17 Q. Do you think it's similarly inappropriate
18 to increase productivity by a straight line rate
19 inflation rate?
20 A. Well, I didn't say it was inappropriate. I
21 said it needs to be done in a consistent and
22 defendable method; and I would say that it's not
23 inappropriate to use improved efficiency, changes in
24 input mix, increasing costs, as long as you have an
25 opportunity to make some adjustments or give the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
228
1 producer the opportunity to make adjustments.
2 Q. Do you have any opinion as to whether the
3 inflation of costs used by Hazen & Sawyer are
4 appropriate or inappropriate?
5 Have you analyzed those?
6 A. I haven't analyzed those in detail. I
7 think it's important to look at for a 20-year
8 analysis whether this is done like you mentioned
9 before, for all products just in gross or if she's
10 going to do it by each production item and try to do
11 it separately for each production item.
12 Q. The categories of data, for example, with
13 regard to costs which you used in your analysis,
14 variable cash expenses, et cetera, capital
15 replacement, are you saying that it would be --
16 rather than inflating the bottom line, it would be
17 better to look at each of those line items
18 individually?
19 A. It very well could be because energy's
20 declining. That mix that you get when you take
21 prices paid index from USDA, which is prices paid by
22 farmers for all inputs is a conglomerate of all
23 kinds of different things that may have absolutely
24 no relationship to the mix of inputs used by the
25 EAA.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
229
1 So you need to come back in and see what
2 the EAA is doing. And I still would want to look at
3 the same time at what's happened over time with some
4 of the data that's in the Sugar & Sweetner Report
5 where they have graphed the actual data by year.
6 When you start working with this, they
7 have, also, graphed the cost per pound of sugar and
8 the cost per pound of sugar has declined in the EAA,
9 if you look at the graph in the Sugar & Sweetner
10 Report just as cost of a pound of sugar.
11 Q. But that would account for increase in
12 productivity, would it not?
13 A. Yes, it would.
14 Q. You may have answered this, but let me make
15 sure. Have you analyzed or formed an opinion as to
16 what rate of inflation, if any, should be applied to
17 the cost of milling and production in the EAA if
18 you're doing a future projection?
19 A. I've not locked into a hard opinion on
20 that. No, I have not formed an opinion. I would
21 like to see information on that and I'm interested
22 in looking at the data that's put in front of me and
23 this could very well be a different rate of
24 inflation for each of the inputs, but it still
25 leaves unresolved the question of how does one take
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
230
1 care of input mix.
2 Q. You have not independently looked at that?
3 A. No, I have not.
4 Q. But in your analysis, you did not attempt
5 to do that as you said; you simply took a snapshot
6 of data?
7 A. That's right. We didn't have a reducing
8 cost of production or reducing cost per pound of
9 sugar or increasing yields or increasing costs or
10 anything. It's a snapshot.
11 Q. Do you consider yourself at all an expert
12 in the effects -- possible effects of GATT and/or
13 NAFTA on the sugar industry?
14 A. No. I'm relying upon other people that
15 have worked very close with it, no.
16 MS. STINSON: I don't have any other
17 questions.
18 MR. SAXE: Let's just take a real
19 quick break.
20 (WHEREUPON, a recess was taken.)
21 * * *
22 R E - E X A M I N A T I O N
23 * * *
24 BY MR. Burgess:
25 Q. Dr. Lacewell, prior to your retention by
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
231
1 the Justice Department, have you had any prior
2 research experience with the Florida sugar industry?
3 A. No.
4 Q. How about with the production or sod
5 industries in Florida?
6 A. Not in Florida, no.
7 Q. Sugar industry any place else?
8 A. I worked with the Lower Rio Grande Valley
9 which has both sugar and vegetables.
10 Q. How much do they have in sugar?
11 A. I don't remember the acres, but it's a
12 smidgen of what Florida has.
13 Q. And what was the issue or issues in that
14 study again?
15 A. We were doing analysis of the
16 Lower Rio Grande Valley relative to cropping
17 patterns and formal renovations.
18 Q. Is there anything from that study that
19 you've drawn upon for any opinions, or conclusions
20 that you've rendered so far in your deposition?
21 A. No.
22 Q. Other than the comments that you have
23 provided to Hazen & Sawyer with respect to their
24 draft and/or final reports, have you provided any
25 original pieces of research to them?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
232
1 A. No, I haven't.
2 Q. Has Dr. Johns or Dr. Jones or Dr. Ozuna to
3 your knowledge?
4 A. They'll have to answer themselves.
5 Q. To your knowledge, you don't know?
6 A. No.
7 Q. Could you look at Exhibit 11, please.
8 A. Okay.
9 Q. Are you familiar with the assertions that
10 appear after the first bar graph on that page,
11 starting with, "No income taxes paid by growers"?
12 A. I see that, yeah.
13 Q. Have you reviewed these before?
14 A. We've seen these comments before, yes.
15 Q. Take the first one, for example, "No income
16 taxes paid by growers." Is that an accurate
17 statement, to your knowledge, with respect to
18 Grace Johns' 10-year study?
19 A. To my knowledge, she did not include income
20 tax by growers, yes.
21 Q. And do you know why she didn't consider
22 that?
23 A. The reason she didn't consider that is her
24 study was based on whether land would be in
25 production or not in production; and as your
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
233
1 returns, your taxable returns decline, your taxes
2 return.
3 So this is a flexible value here that will
4 go down as your returns, taxable returns, go down
5 and you'd have to incorporate that; but by the time
6 your returns get to where there's no taxable
7 returns, there's no income tax.
8 Q. So, in essence, does it matter at the point
9 where land is not yielding any of the returns?
10 A. It's not going to be a significant factor
11 in determining whether land is in production or not
12 in production.
13 Q. And that is because?
14 A. As your returns to land are declining, your
15 income taxes are declining. That's a cost. It's a
16 function of the net.
17 Q. Do you know whether Grace Johns did a cash
18 flow statement or a balance sheet?
19 A. What Dr. Johns did was an analysis that
20 looked at it year by year that calculated the
21 returns to land. And so she did this on an annual
22 basis, from 1994, for a 10-year period. And it
23 looked at the returns to land for sugarcane,
24 vegetables, and sod over that period of time.
25 Q. And is a return to land study a classic
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
234
1 economic analysis?
2 A. It's a typical economical analysis to see
3 if land's going to be in production or not in
4 production.
5 Q. And would you say that, typically,
6 consideration of income taxes is or is not included
7 in the returns to land analysis?
8 A. Typically is not included in a returns to
9 land analysis.
10 Q. Have you seen it both ways, if you will?
11 A. I have never seen it included in a returns
12 to land analysis.
13 Q. Is there a role for income taxes in
14 economic analysis?
15 A. Income taxes could play a role in farm
16 survival, and its objective is to do an analysis of
17 a unique farm firm and with the specific
18 characteristics of that farm firm, evaluate the firm
19 and its survivability, then income taxes could play
20 a role. But I am not sure that it even plays a role
21 in that.
22 Q. Why is that?
23 A. Well, again, if you're in such a position
24 that you're about to become insolvent, I'd say
25 there's a probability that you're not paying any
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
235
1 income tax.
2 Q. The second point on Exhibit 11 reads,
3 "No debt carried by growers."
4 Do you know whether or not Grace Johns
5 assumed any debt carried by growers for her 10-year
6 analysis?
7 A. She put in an interest on operating
8 capital, which you could assume she borrowed
9 operating capital, short-term debt. She also
10 amortized the machinery, which assumes that she
11 borrowed all the money that was used for the purpose
12 of the machinery, which would be intermediate debt.
13 She had debt as "debt," yes.
14 Q. Did she have any long-term debt?
15 A. She did not have any land debt.
16 Q. Is there other long-term besides the land
17 debt?
18 A. That would be the most logical that I can
19 think of unless you want to mortgage your land to
20 take the money to buy something else completely
21 unrelated to the operation. You could still
22 mortgage the land, so it's still land debt.
23 Q. And why didn't she include land debt?
24 A. Because land debt, again, will not be a
25 determining factor of whether or not a piece of land
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
236
1 is used to produce a crop. Land debt would be
2 important in farm firm survival.
3 Q. Have you ever seen land debt considered in
4 a returns to lands analysis?
5 A. No, I haven't.
6 Q. What's your definition of farm firm?
7 What does that connote?
8 A. A farm firm would be an individual farm
9 operation that's operated as a separate entity and
10 is engaged in production of agricultural products.
11 Q. Are you aware of any farm firm analyses
12 that have been conducted with respect to the EAA in
13 connection with the SWIM plan challenge?
14 A. Not beyond the work that is carried out by
15 Dr. Johns in the Hazen & Sawyer Report or whatever.
16 Q. Do you consider her work or any portion of
17 her work to be farm firm analysis?
18 A. She used many of the principles you used in
19 production economics and farm management analysis to
20 evaluate land in production. She did not evaluate
21 whether a farm would survive specifically or not
22 survive specifically.
23 Her analysis was directed to determining
24 when land would go out of production.
25 Q. And when, if you recall, did she say land
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
237
1 would go out of production? At what economic point?
2 A. The point land goes out of production is
3 when the returns to land is zero.
4 Q. So it's your testimony that long-term debt
5 or land debt was not an important factor for
6 Grace Johns to consider in her analysis?
7 A. I would say that land debt, long-term debt
8 was not an important factor for her to consider in
9 determining whether land in EAA would be in
10 production or not in production.
11 Q. The third entity there on Exhibit 11
12 states, "All machinery is purchased new in 1994 for
13 cash and without any debt."
14 Do you know whether that's an accurate
15 statement of an assumption in Grace Johns' 10-year
16 study?
17 A. All machinery was purchased in 1994, except
18 something -- and it was in 1981. I don't recall
19 what, but, nevertheless, she purchased all machinery
20 new in 1994 and she borrowed all the money to
21 purchase machinery and paid it off over a planning
22 period.
23 Q. Do you know how long the planning period
24 was?
25 A. I can look it up. I don't recall it
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
238
1 exactly.
2 Q. So that would not be an accurate statement;
3 is that correct?
4 A. That's not an accurate statement.
5 Q. If you wouldn't mind taking a look to see
6 where that might be in that report.
7 A. 8 percent annual interest over 12 years.
8 Q. Do you know how much of the money was
9 borrowed, how much was put in this machinery?
10 A. The total amount.
11 Q. For what percentage?
12 A. Well, she says depreciation returns in
13 investment is a 1994 purchase price of the farm
14 machinery complement amortized at 8 percent annual
15 interest over the estimated economic life of
16 machinery, which says that she borrowed in her
17 analysis every penny of it.
18 Q. What page is that?
19 A. It's 4-11, second paragraph.
20 MR. SAXE: To clarify, that's 4-11.
21 Q. (By Mr. Burgess) The next entry on
22 Exhibit 11 states, "Improper use of model technique
23 (FLIPSIM)."
24 What is your understanding as to whether
25 and to what extent Grace Johns employed FLIPSIM?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
239
1 A. She used FLIPSIM as a method to make
2 calculations so that she could determine and
3 estimate through time the returns to land so that
4 she could track to see whether it was a positive
5 returns to land.
6 So FLIPSIM provided a convenient tool to
7 keep a count of cost and returns and the returns to
8 land.
9 Q. Are you familiar with FLIPSIM?
10 A. Somewhat.
11 Q. Is it a methodology for studying impact of
12 policy changes on farm level behavior?
13 A. That's what it says in the documentation,
14 yes.
15 Q. Have you ever utilized it?
16 A. I have not utilized it myself, no.
17 Q. Do you have any opinion as to whether
18 FLIPSIM could be used to analyze the impact of
19 federal sugar program policy changes?
20 A. To evaluate the impact of federal sugar
21 policies changes of what?
22 Q. Well, the program changes, assume --
23 A. On what? What do you want to evaluate?
24 Q. Production. Changes in production.
25 A. Okay. He's got a static model, and he's
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
240
1 got a stochastic model.
2 If you ran it the way that Grace ran it,
3 you could probably get some estimates of what
4 changes in sugar production -- sugar policy would do
5 to production of sugar.
6 Q. How did Grace run it?
7 A. She ran it as a static model to keep the
8 calculation straight for her. It's convenient
9 because it's programmed and tested and keeps all
10 your items in the right place and moves from year to
11 year.
12 Q. What does "stochastic" mean?
13 A. Stochastic means, random chance --
14 probabilities. Stochastic is another word for
15 probability.
16 Q. Going back to the debt item just for a
17 moment. Other than the new machinery purchased
18 complement, was there any other intermediate debt
19 that Grace Johns considered for her 10-year
20 analysis?
21 A. Not that I recall at this point.
22 Q. What other type of intermediate debt might
23 a farm have?
24 A. That would be the most logical.
25 Q. Equipment complement?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
241
1 A. Yes.
2 Q. Do you have an opinion as to whether or not
3 Grace Johns improperly used FLIPSIM?
4 A. My opinion is she did not improperly use
5 FLIPSIM.
6 Q. The next item states on Exhibit 11, "No
7 risk in the sugarcane yield of model farm."
8 Do you know whether or not Grace Johns
9 considered risks in her model farms?
10 A. She didn't consider risks, no.
11 Q. Do you know why not?
12 A. When you look at the EAA and you look at
13 the program for sugar policy and you look at the
14 yields, it's not a terribly risky business.
15 So she did review the materials, and you
16 take the 5-year averages, the yields have been
17 reasonably consistent. If you look at the prices,
18 the prices over the last few years have been
19 reasonably consistent.
20 What you've got is an industry that's got
21 technology improving faster than cost production is
22 increasing, so average cost per pound of sugar is
23 actually going down.
24 And another way to consider this is land
25 values, and we hear from Richardson land value
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
242
1 2,500 or 3,000. Mr. Wedgworth said something 3,000
2 or 4,000.
3 If you look at what the returns to land
4 have to be to get that kind of value, then risk
5 would already be incorporated in those land values;
6 and when you back out of this and get your annual
7 returns to land, that's got to be pretty high to
8 justify that.
9 Q. I'm sorry. Backed by something?
10 A. You better repeat it.
11 MR. BURGESS: Would you read it
12 back, please.
13 (WHEREUPON, the requested
14 portion of the record was read
15 by the court reporter.)
16 Q. (By Mr. Burgess) And your basis for saying
17 that the sugar farming in the EAA is not a terribly
18 risky business is what?
19 A. Data in the Sugar & Sweetner Report.
20 Q. Over what period of time do the averages
21 show that the yields have been reasonably
22 consistent?
23 MR. SAXE: Objection to form.
24 If you're attempting to restate
25 what Professor Lacewell said about
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
243
1 yields, I don't think he said that it
2 shows that yields have been fairly --
3 quote, "fairly consistent."
4 MR. BURGESS: Whatever he said
5 with respect to yields.
6 Q. (By Mr. Burgess) Over what period of time
7 were you basing that statement?
8 A. Those would be over 20 to 30 years that the
9 gross tons do not change much. The amount of sugar
10 from each pound, from each ton of sugar has gone
11 up. So we have an increasing output of sugar per
12 ton of cane, but we don't see a lot of variability
13 in output and risks or in price.
14 Q. And your testimony with respect to prices
15 was that they had been reasonably consistent.
16 For what period of time have they been
17 reasonably consistent?
18 A. Do you have March?
19 (Dr. L. Jones complies with
20 document.)
21 A. The date of that in front of me right now
22 is '85 to '91.
23 Q. (By. Ms. Stinson) And what does that show?
24 A. It shows the price is over 20, but in the
25 20-cent bracket, 20, 23 cents.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
244
1 Q. Are you aware of any studies which address
2 the likely price of sugar over the next, say, to two
3 to three to five years?
4 A. There is a study that was in one of the --
5 that's in the handout that you gave me, which is
6 Exhibit 11, that talks about implications of GATT
7 agreement for world commodity prices that I would
8 assume addresses that. I haven't read it.
9 And there's some material Dr. Polopolus has
10 put together that I also have not reviewed that
11 addresses sugar price.
12 Q. Do you have an opinion as to what the
13 likely price of sugar will be over the next two to
14 three to five years?
15 A. The next two to three to five years, my
16 opinion of that would be that if we don't have a new
17 farm bill by 1995, the current farm bill's in place
18 and that there will be no dramatic changes.
19 Q. What role, if any, does yield risks
20 normally play in a returns to land analysis?
21 A. Normally no role in the returns to land.
22 Yield risks can be important in looking at farm firm
23 survivability, to repay notes, and can be important
24 in looking at cropping patterns within a single farm
25 firm with unique characteristics.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
245
1 Q. What is your definition of "yield risk"?
2 A. Yield risks is the variability of yield
3 across several years.
4 Q. And, if I recall your testimony correctly,
5 you don't expect any increase or change in yield
6 risk as a result of implementation of the BMP's as
7 long as they're implemented, quote, unquote,
8 "correctly"?
9 A. That's true.
10 Q. With respect to sugarcane production in the
11 EAA, is there a probability distribution of yields
12 for each season?
13 A. Across seasons?
14 Q. Yes, from season to season.
15 A. You can develop a probability of
16 distribution of yield, yeah.
17 Q. Do you know whether anyone has done that
18 with respect to the SWIM plan challenge?
19 A. I don't know whether that's been done or
20 not, no.
21 Q. The next entry on Exhibit 11 speaks in
22 terms of, "mill efficiency trend overstated."
23 And what is your understanding regarding
24 the level of mill efficiency in the Florida
25 sugarcane production?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
246
1 A. My understanding is what's in the
2 Sugar & Sweetner Report which gives the pounds of
3 sugar per ton of cane.
4 Q. What does "mill efficiency" refer to?
5 A. Mill efficiency would be the pounds of cane
6 per ton of cane --
7 MS. STINSON: Excuse me?
8 A. -- pounds of sugar per ton of cane.
9 MS. STINSON: Thank you.
10 Q. (By Mr. Burgess) Do you believe that's a
11 correct or incorrect statement that Grace Johns
12 overstated the mill efficiency term?
13 MR. SAXE: Counsel, I just wanted to
14 point out, this is not
15 Professor Lacewell's document.
16 MR. BURGESS: I understand.
17 MR. SAXE: So when you ask him
18 what a given term means --
19 MR. BURGESS: Right.
20 MR. SAXE: -- he doesn't know
21 what the author intended the term to
22 mean.
23 MR. BURGESS: Okay.
24 Q. (By Mr. Burgess) Well, assuming that the
25 author intended the terms to mean pounds of sugar
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
247
1 per ton of cane -- strike the question.
2 What did Grace Johns say with respect to
3 mill efficiency trends, if you recall?
4 A. She had mill efficiencies increasing over
5 time derived -- she derived that from looking at the
6 historical data that was in the
7 Sugar & Sweetner Report.
8 Q. And at what percentage did she have them
9 increasing over time, if you know?
10 A. 2 percent is the number she used.
11 Q. Are you aware of any other studies or
12 estimates of mill efficiency in the EAA other than
13 Grace Johns' 2 percent?
14 A. It's the only one that I'm aware of. The
15 data's in the Sugar & Sweetner Report. So it's
16 published information.
17 Q. Did she use a regression equation to
18 generate that 2 percent?
19 A. That's my impression.
20 Q. Did you check her regression equation in
21 her report?
22 A. I looked at it. I didn't check her
23 statistics or look back on it. She indicated it was
24 significant, had a high "R" squared. I don't know
25 what the "R" squared was.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
248
1 Q. You didn't check her computations, then?
2 A. No, I did not.
3 Q. Do you know, in fact, whether she even used
4 that regression equation in her analysis?
5 A. I would assume she did, but I don't know,
6 in fact, that she absolutely did.
7 Q. Does the concept of mill efficiency have a
8 tendency to increase the prices paid to the growers?
9 A. Because you take production costs and
10 processing costs and take out for all the factors of
11 production from each of them and leave the residual
12 as what could be returns to land, then if you have
13 increasing efficiency at the mill, so that the
14 increasing efficiency is greater than your regular
15 increasing cost production, that means the
16 processing cost per pound of sugar is going down and
17 it would leave more that could be paid to the land.
18 Q. The next entry on Exhibit 11 states,
19 "Improperly combining mill and grower return."
20 Do you know whether Grace Johns combined
21 mill and grower returns in your 10-year analysis?
22 A. What Grace Johns did was take out a cost
23 for each of the factors of production. She did
24 that, also, at the mill. So she paid for each of
25 the factors of production which is typical
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
249
1 economical analysis.
2 She then said, what's not gone to pay all
3 the different factors of production could be
4 available to pay the landowner to keep land in
5 production. That was her estimate of what could be
6 paid.
7 Q. The next item speaks in terms of, "No
8 machinery will require replacement during the
9 10-year study period."
10 Do you know whether she, in fact, made that
11 assumption?
12 A. She bought the machinery in 1994 with the
13 12-year life. So, no, there would not be a need to
14 do that; but she's making a payment against the
15 machinery every year.
16 Q. Next assumption reads, "Land values
17 increase at a constant 4 percent without concern for
18 net cash return."
19 Do you know whether or not Grace Johns'
20 study had land values increasing at 4 percent per
21 year?
22 A. I don't recall Grace Johns having land
23 value estimates in her study. I can't tell you the
24 source of that comment or what it refers to or what
25 it means.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
250
1 Q. The next item reads, "Farms leave
2 production as soon as cash costs exceed cash
3 returns."
4 Do you know whether or not that was an
5 assumption Grace Johns made?
6 A. Oh, I don't know what that particularly
7 might mean. Again, what Grace Johns did, she paid
8 all of her factors of production; and she left
9 residual that could be paid to land once this
10 residual that could be available to be as a payment
11 to land reads zero, that's when she quit
12 production. She said, "There's not anything left to
13 pay land. There's no economic incentive to stay in
14 production. If that point is hit in this analysis,
15 that's when I'll take land out of production."
16 Q. Is that the same as marginal costs
17 exceeding marginal revenues?
18 A. Well, marginal costs exceeding marginal
19 revenues refers to how much you put on a specific
20 input. And so you're making decisions about your
21 input mix, and that's when marginal revenue or
22 marginal cost or marginal value of product equal
23 marginal factor, cost becomes an important
24 consideration.
25 She didn't change her input mix one bit, so
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
251
1 all she did was pay each of the factors of
2 production for the processing, for the production,
3 generate a residual that could be paid to land; and
4 when that reached zero, she quit.
5 MR. SAXE: Could we take just a
6 one-second break?
7 (WHEREUPON, the witness and
8 counsel conferred and
9 there was discussion
10 off the record.)
11 Q. (By Mr. Burgess) In response to one of
12 Ms. Stinson's questions, I think you said that you
13 would rely on others with respect to issues of GATT,
14 NAFTA. Who were you referring to?
15 A. Primarily Dr. Bruce Gardner.
16 Q. How about with respect to the federal sugar
17 program, do you consider yourself an expert in that
18 area?
19 A. No. I would still rely upon Dr. Gardner.
20 Q. Do you have any opinions as to whether that
21 program should be retained, revised, or abolished?
22 MR. SAXE: Question for
23 clarification. Are you talking
24 about -- your previous question about
25 upon whom would Professor Lacewell
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
252
1 rely concerning the federal sugar
2 program, did you mean the continuation
3 or the future prospects for the
4 federal sugar program?
5 MR. BURGESS: I guess, his expert
6 opinions concerning the federal sugar
7 program.
8 MR. SAXE: The mechanics, the
9 present operation?
10 MR. BURGESS: Yes.
11 MR. SAXE: Okay. Thank you.
12 You can answer the question.
13 A. It still would be Dr. Gardner relative to.
14 Q. (By Mr. Burgess) Do you have any opinion
15 as to whether the loan rate of 18 cents is going to
16 stay the same or go up or go down over the next two
17 to three years?
18 A. If I were projecting, I would project it
19 would probably stay the same. The government
20 programs have been in place for 40 years. So I
21 would expect it to be the same.
22 Q. Do you have an opinion as to whether sugar
23 production costs have trended up or down in Florida
24 over the last five years?
25 I apologize. If you've already voiced the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
253
1 opinion, I don't recall.
2 A. Based on the information of the
3 Sugar & Sweetner Report, when you look at the costs
4 for production in processing per pound of sugar,
5 that looks like a downward trend to me.
6 Q. Over what period of time?
7 A. In this case, the graph shows from
8 1981 through 1990.
9 Q. In your opinion, the graph shows that costs
10 of processing on per pound of sugar basis is going
11 down?
12 A. Yes.
13 MS. STINSON: Excuse me.
14 May I ask what graph you're
15 looking at?
16 THE WITNESS: This is in the
17 Sugar & Sweetner Report, June 1992;
18 and it's figure A-10, "Florida
19 Sugarcane Production and Processing
20 Costs."
21 MS. STINSON: Thank you.
22 Q. (By Mr. Burgess) To your knowledge, has
23 anyone other than Dr. Johns attempted to analyze how
24 many people are employed in agriculture and
25 agriculturally-related industries within the EAA?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
254
1 A. There is material that Dr. Polopolus
2 presented to the board, but I don't know how he
3 generated or developed the numbers.
4 Q. Other than Johns and Polopolus, are you
5 aware of any other estimate?
6 A. No.
7 Q. What multiplier did Grace Johns use in
8 connection with her determination as to jobs that
9 would be lost in the region?
10 MR. SAXE: Counsel, are you asking for
11 the number or the source of the
12 number?
13 MR. BURGESS: Well, I'm sorry.
14 Q. (By Mr. Burgess) I thought there was some
15 testimony that she used a multiplier abdicated by
16 Mulkey & Clouser.
17 Do you recall that testimony?
18 A. She used the RIMSII, yeah, multipliers.
19 Q. And do you know what the -- I guess you're
20 looking it up.
21 A. Yeah, I'll have to look it up to get
22 exactly what it was. On Page 9-15 of the "Contract
23 Completion Report" of Hazen & Sawyer, the
24 multipliers that I see on this page say,
25 "Palm Beach County milled rice multipliers." These
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
255
1 are for rice.
2 So rice has a different set of multipliers
3 than sugarcane. Output sales, per dollar of direct
4 sales is 1.26; earnings per sales of direct
5 sales, .1936; employment and FTE's per million
6 dollars of direct sales, 9.13.
7 Then there's a set of numbers for the State
8 of Florida, which is output sales per dollar of
9 direct sales, 1.44; earnings per dollar of direct
10 sales, .2523.
11 Q. Is this for -- I'm sorry.
12 Are you reading for rice?
13 A. Rice, still rice.
14 And employment in FTE's per million dollars
15 for direct sales is 14.2.
16 Q. Do you know whether those RIMSII
17 multipliers can be used to reflect number of people
18 employed as opposed to just FTE's?
19 A. They represent FTE's.
20 Q. Are you aware of any simulations which have
21 been run by Dr. Johns or others conducted with
22 respect to people as opposed to FTE's?
23 A. Again, there's some numbers that
24 Dr. Polopolus has generated that show people; but we
25 don't know what procedure he used to do that.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
256
1 Q. Do you know what the moderating provisions
2 of the -- for Florida statutes, in particular,
3 Chapter 17-4 provide for?
4 A. No, I don't.
5 Q. Do you know what a mixing zone is?
6 A. You'd need to read a definition to me. I
7 can't give you a definition.
8 Q. Do you know or have you ever heard of the
9 term SSAC, S-S-A-C, spoken in terms of the Florida
10 Statute for Florida Water Quality Standards?
11 A. No.
12 Q. My notes reflect that in Exhibit 7 you used
13 a term, I believe, that is in context of referring
14 to Dr. Luke's studies as "socio-economic
15 evaluations." What is your experience with respect
16 to socio-economic evaluations? How are they
17 conducted?
18 A. My experience is I have not done a specific
19 socio-economic study. If I was involved in anything
20 that involved that, I would go back with Dr. Jones
21 and ask for his support on that part of the program.
22 Q. Dr. Lonnie Jones?
23 A. Yes.
24 MS. STINSON: Off the record.
25 (WHEREUPON, there was discussion
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
257
1 off the record.)
2 Q. (By Mr. Burgess) Are you aware,
3 Dr. Lacewell, of any studies ongoing which consider
4 the weighing of the social-economic and
5 environmental costs of achieving the levels called
6 for in the SWIM plan versus the social, economic,
7 and environmental benefits that might be gained from
8 reaching those levels?
9 THE WITNESS: Read that back.
10 (WHEREUPON, the requested
11 portion of the record was read
12 by the court reporter.)
13 A. Relative to the first of those comments,
14 whether they would be economic, social,
15 environmental, costs of reaching the discharged
16 levels of the SWIM plan, there's the Hazen & Sawyer
17 Report that was commissioned by the South Florida
18 Water Management District to make some estimates of
19 what could be expected to be the impact in the EAA
20 of satisfying the SWIM plan. This included the
21 direct, indirect and induced impacts which would be
22 economics and economic activity changes in gross
23 output from agriculture, jobs, this sort of thing.
24 Relative to socio-economic impacts, which
25 might include schools, streets, sewers, and other
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
258
1 infrastructure of that nature, it's my impression
2 that Mr. Luke may be doing some work on that in the
3 EAA; but I don't have firsthand knowledge nor can I
4 say what he's going or how he's going to do it or
5 what he's going to do.
6 Q. You're not aware of anyone doing it on the
7 Respondent's side, the District of the DER of the
8 United States?
9 A. I'm not aware, no. There's a SAGE group
10 that are carrying out the studies. So, no, I don't
11 have a complete inventory of what kind of studies
12 the South Florida Water Management District is
13 doing.
14 Q. You're not aware of any benefits, that type
15 study that is being done?
16 A. Beyond the work that Hazen & Sawyer did,
17 no, I'm not aware of anything beyond
18 Hazen & Sawyer's work.
19 Q. Have you reviewed the Marjory Stoneman
20 Douglas Act?
21 A. I read through that sometime ago.
22 Q. Are you aware that under that act the cost
23 of treatment to reach the goals enunciated in the
24 SWIM plan are divisible and are allocatable, if you
25 will, in a proportion to a property owner's
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
259
1 contribution towards the problem?
2 MR. SAXE: Objection to form.
3 Q. (By Mr. Burgess) In the abstract, are you
4 familiar with that?
5 MR. SAXE: I think that assumes
6 material not in evidence, Counsel.
7 It's a legal conclusion, first of
8 all, concerning the Marjory Stoneman
9 Douglas Act.
10 MR. BURGESS: Objection to legal
11 conclusion noted.
12 Q. (By Mr. Burgess) Are you aware of that
13 concept?
14 A. I've heard of it.
15 Q. Have you done any research or studies past
16 what you have testified to so far in attempting to
17 quantify what the farmers share of that program
18 enunciated in the SWIM plan might be?
19 MR. SAXE: Objection to form.
20 Characterization of what I assume
21 you're referring to in Exhibit 12 as
22 an assessment of what the farmers'
23 share of the costs might be, I think
24 is an unfair accusation.
25 Professor Lacewell is describing
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
260
1 what the purpose of that presentation
2 and that analysis was.
3 I'm not sure that you've properly
4 described it.
5 Q. (By Mr. Burgess) You can still answer.
6 A. I have not done any work that would look at
7 rates of discharge and how that might relate back to
8 reinforcing assessments in any other way.
9 Q. Have you done or are you aware of any work
10 that has been done with respect to an examination of
11 whether or not the amounts referenced in Exhibit 12
12 are available to be funded from existing resources,
13 other than what is contained in Exhibit 12?
14 THE WITNESS: Can you repeat that
15 question?
16 (WHEREUPON, the requested
17 portion of the record was read
18 by the court reporter.)
19 MR. SAXE: Objection to form;
20 unclear.
21 A. I can't get a grip on the question.
22 Q. (By Mr. Burgess) Okay. Have you
23 undertaken, yourself, any research to examine
24 whether or not the SWIM plan program can be funded
25 from existing or available resources other than
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
261
1 Exhibit 12 to the extent that you might say that
2 there is such a study?
3 A. I have not done any work beyond
4 Exhibit 12.
5 Q. Are you aware of any other studies that
6 have been done with respect to whether or not the
7 SWIM plan can be funded from available resources?
8 A. I'm not aware of other studies on that
9 topic.
10 Q. Turning to Exhibit 12, did either yourself
11 or Dr. Jones discuss the contents of this with
12 Grace Johns' before the February 11th presentation?
13 A. No.
14 Q. Did Grace Johns review a draft or reports
15 or any of the overheads before that presentation?
16 A. No.
17 Q. Other than Dr. Jones, who else helped in
18 the preparation of this exhibit?
19 A. Just Dr. Jones.
20 Q. The "Executive Summary" page on the bottom
21 in the overview section talks in terms of returns to
22 land for management and risks.
23 How do you define "risks" in the way that
24 you use it in that sentence?
25 A. Earlier, I went through how each of the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
262
1 factors of -- nitrogen's a factor of production, so
2 you pay 10 cents per pound for nitrogen; you have
3 20 pounds, that would be $2. That's the cost to pay
4 for nitrogen. There is a cost associated with all
5 of the factors of production that we could quantify
6 and clearly enumerate.
7 In this case, this would be those things
8 that do not have a cost associated with them in the
9 values that we worked with. So this is going to be
10 the residual, and this is the correct returns to the
11 land management risks. And that means that it's not
12 enumerated or quantified earlier.
13 Q. On the tenth page there's a bar on the top
14 that says, "STA and BMP costs in the EAA."
15 A. Okay.
16 Q. And the next to last bullet talks in terms
17 of 430,533 times 75 percent. What is the 75 percent
18 figure?
19 A. This figure we took from Hazen & Sawyer,
20 and Hazen & Sawyer worked with a gross acre of cane
21 and from that gross acre of cane, 12.5 percent would
22 be in roads, canals, and ditches; 12.5 percent would
23 be in cane that's not harvested.
24 We did that to get down to harvested
25 acres.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
263
1 Q. If you could, turn to the "Sugarcane
2 Production and Processing Costs Chart," which is
3 some number of pages subsequent.
4 A. Okay.
5 Q. Now, we had a lot of testimony this morning
6 on transportation costs and I made some notes and I
7 just want to make sure that I understand what it is
8 that you have said and then fill in some areas where
9 I think that there has not been testimony.
10 Turning towards the 4.88 figure under
11 "Variable Cash Expenses," do we know how much, in
12 fact, of that 4.88 is for transportation; and I want
13 you to know that my intention is not to repeat and
14 have you repeat testimony, but just to fill in
15 blanks where I think they might exist.
16 A. Okay. The values of 1986 through 1990 as
17 recorded in the Sugar & Sweetner Report of June 1992
18 Appendix Table A-4 are as follows: .832, .779,
19 .8, .909, .841, and this is processing costs per net
20 pound of 96-degree raw sugar for Florida and that is
21 for cane transportation specifically.
22 Q. Those amounts?
23 A. Yes.
24 Q. And is that for transportation from the
25 field to the mills?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
264
1 A. Yes.
2 Q. So the only, then, transportation component
3 of the variable cash expenses would be a
4 transportation component for bringing cane from the
5 field to the mill?
6 A. In this table, yes.
7 MR. SAXE: Counsel, I'd like to show
8 something to Professor Lacewell from
9 the March '92 Sugar & Sweetner Report
10 that he testified earlier he
11 considered in generating these figures
12 in the interest of possibly refreshing
13 recollection.
14 I'm referring to Page 45 of this
15 document.
16 A. There are other transportation costs
17 included in the market and when we get to
18 processing, we haven't gone to that. So this cane
19 transportation is a cost to move the cane from the
20 field to the mill.
21 Q. (By Mr. Burgess) And, now, let's go to
22 marketing. You're talking about the marketing
23 component of variable cash expenses?
24 A. Yes.
25 Q. Okay. And what portion of transportation
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
265
1 costs -- what portion do transportation costs bear
2 in the relation to the total marketing cost?
3 A. In discussions with Dr. Lord on the
4 telephone, he said it would be more than 50 percent,
5 maybe 60 percent. And he quoted a number of
6 eight-tenths of a penny per pound.
7 In the Sugar & Sweetner Report, March 1992,
8 it does say under the variable cost of processing
9 raw sugar in Florida the prices -- no, that's not
10 what I want.
11 Processing includes all expenses necessary
12 to move raw sugar to a refinery and there captured
13 in the marketing cost.
14 Q. I'm sorry. Where does it say that?
15 A. It says that on Page 45 of the March 1992,
16 Sugar & Sweetner Report, beneath Figure B-2.
17 Q. And what does it say there?
18 A. Under "Sugar Processing Costs" it says,
19 "Processing includes all expenses necessary to move
20 raw sugar to a refinery. Processing costs for
21 lowest Florida at 6.31 cents a pound, and highest in
22 Hawaii at 13.01 cents."
23 Q. And is it your understanding that that
24 reference on Page 45 speaks in terms of processing
25 including transportation costs for moving the raw
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
266
1 sugar from the mills to refineries, whether they're
2 located in the EAA in Savannah, Georgia, or in
3 Baltimore or wherever?
4 A. Yes. That's an average cost to move the
5 sugar out of there on a per pound basis.
6 Q. And the average per pound cost, again, is
7 not in that report but you have gleaned that from
8 conversations with Dr. Ron Lord; is that correct?
9 A. That's right. It's not separated out as a
10 separate item. It is a component of what they put
11 in as marketing costs.
12 Q. And he told you that that was approximately
13 eight-tenths of one penny per pound?
14 A. Yes, that's what he said.
15 Q. So it would be your testimony, would it,
16 sir, that with respect to the 17.87 appearing at the
17 bottom of that page that that figure would, in fact,
18 include transportation costs to move that sugar from
19 the field to the mills to all East Coast markets?
20 A. That would include the cost to move the
21 sugar from the field to the mill, and it would
22 include the cost that was actually paid in the EAA
23 to move sugar from the mills to refineries wherever
24 the refinery was.
25 Q. Okay. Four pages from the end of that
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
267
1 exhibit --
2 MR. SAXE: Counsel, again, you're
3 referring to a scratch copy of that.
4 It may not be paginated.
5 A. Give me the title.
6 Q. (By Mr. Burgess) "The Procedures for
7 Estimating Costs and Returns in EAA."
8 A. Yes, I've got that.
9 Q. The ending figure on that Page $62.11
10 representing, "STA's and BMP's cost per acre of land
11 allocated to cane."
12 What's the difference between that figure
13 and the $82.82 figure appearing as SWIM costs per
14 harvested acre of cane?
15 A. Okay. The $62.11, as we went through
16 earlier, would be the cost per acre of cropland in
17 the EAA which is 28.5 million divided by 465,341
18 acres that would be available for cropland after the
19 STA's. We added 86 cents on, which is the cost for
20 BMP's for sugarcane; add those two up, we get
21 62.11.
22 Now, the 62.11 is a cost that would go
23 against roads, ditches, canals, and unharvested
24 cane.
25 So the harvested cane is going to have to
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
268
1 pay the whole bill. So rather than try to throw
2 62.11 out there, we said, as a farmer, if I were a
3 farmer, I would have to pay all of these costs just
4 on my harvested acres of cane because that's the
5 only place I'm going to make any money.
6 So we took the $62.11 which is applicable
7 across all the acres, and we multiplied it by the
8 acres allocated to cane after STA's which gave us
9 the $26,740.
10 Q. Is that multiplication or computation shown
11 in this exhibit somewhere?
12 A. I hope so. It -- are you on "procedures"?
13 Stay with your "procedures."
14 Q. Okay.
15 A. Turn one page over.
16 Q. Okay.
17 A. So we multiplied it by all the acres of
18 cane including roads, ditches, canals, unharvested
19 cane gave us 26,740,405.
20 Q. Right. Okay. I see where that's at.
21 A. Then we divided by actual acres of cane
22 harvested and said they've got to support the whole
23 thing and that gives us 82.82.
24 Q. Now, are you aware of any economic impact
25 analysis that has been conducted similar to the
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
269
1 Grace Johns' study where this particular figure of
2 $83 an acre is used to determine what lost of jobs
3 or lost of acreage may have resulted from --
4 A. No.
5 Q. -- imposition of that assessment?
6 A. We generated these numbers. The first time
7 they were made public was when Dr. Jones made the
8 presentation so, no.
9 Q. What was the purpose for generating these
10 numbers?
11 A. Because we did some work with the working
12 papers looking at what we were doing in response to
13 some things that they were doing in Miami, so
14 Dr. Jones and I said, "The best thing we can do is
15 stop and generate our own values. It's time we knew
16 where every number came from. Let's take it from
17 beginning to end, and we'll see if council has any
18 reaction to it."
19 Q. You said earlier in your testimony that
20 your capacity thus far has been to review existing
21 efforts. As you sit here today, do you have any
22 plans for affirmative work efforts, research, or
23 reports?
24 MR. SAXE: Objection to form. Have
25 any plans specific to this case?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
270
1 Q. (By Mr. Burgess) Are you undertaking -- do
2 you have any efforts that you're undertaking now
3 other than what you've testified to with respect to
4 Exhibit 12, which I would couch in terms of an
5 affirmative work effort as opposed to a review of
6 existing work effort?
7 MR. SAXE: I'll interject.
8 Counsel, if you'll restrict the scope
9 of your question to plans relevant to
10 the subject matter regarding which
11 Professor Lacewell might testify as
12 defined by our designation of
13 Professor's Lacewell as a potential
14 expert witness and distinguish work
15 that goes outside the scope of his
16 potential expert testimony and deals
17 with potential litigation consultation
18 that's not within that ambient, then I
19 won't object to the question.
20 I understand that you're asking
21 whether relative to the matters
22 regarding which this deposition is
23 going forward his expert opinions
24 concerning economic impact,
25 et cetera.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
271
1 Whether Professor Lacewell has
2 any plans presently to undertake
3 affirmative research or analysis and
4 if that's correct then, I have no
5 problem with the question.
6 Q. (By Mr. Burgess) Well, answer it given the
7 provisions that Counsel have given.
8 A. Somebody give me the question with
9 provisions and I'll answer it.
10 Q. My question is simply whether your existing
11 testimony has been early on that you were retained
12 to review existing work efforts. And my question to
13 you is: As you sit here today, do you have any
14 plans for affirmative work efforts, which I would
15 classify Exhibit 12 as being an affirmative work
16 effort, preparation of a research report?
17 Do you have any of those plans in the
18 context of the SWIM plan challenge, the issues in
19 the SWIM plan challenge?
20 A. The plans that I have now are to review the
21 20-year study that Hazen & Sawyer's going to do; and
22 if I can interact on that one, I will. I do not
23 have any specific plans for a specific study beyond
24 that at this point.
25 Q. The expert witness designation that your
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
272
1 Counsel referred to says that the subject matter of
2 your expected testimony is, quote, "Direct economic
3 impacts of the Everglades Restoration Program," end
4 quote.
5 Have you formulated any expected testimony
6 other than that which you have given thus far, which
7 is in the nature of reviewing the Hazen & Sawyer
8 study and other studies with respect to direct
9 economic impacts of the Everglades Restoration
10 Program.
11 MR. SAXE: Could you restate the
12 question? It was a long one.
13 Q. (By Mr. Burgess) Have you formulated any
14 testimony other than that which you have given thus
15 far in your deposition with respect to direct
16 economic impacts of the Everglades Restoration
17 Program?
18 A. I would say that I haven't. I have an
19 alternative opinion from what I've represented in
20 the past two days.
21 Q. Are you working on or towards developing
22 direct economic impact testimony regarding the
23 Everglades Restoration Program other than in your
24 capacity as you just testified of reviewing
25 Hazen & Sawyer's 20-year study?
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
273
1 MR. SAXE: Counsel, I'm going to
2 object. The question is improper in
3 the context of the unfolding dilemma
4 with the scope of expert testimony by
5 the United States in this case.
6 Presently there's no -- there
7 have been no decisions concerning a
8 scope of an affirmative presentation
9 of expert testimony by
10 Professor Lacewell; and our position
11 has been stated as having listed
12 Professor Lacewell for protective
13 purposes as these issues unfold and
14 primarily contemplating responding to
15 the case that we expect the
16 petitioners to put forward, which case
17 has not yet been articulated through
18 the process of discovery.
19 So, at this point, to ask
20 Professor Lacewell whether there's any
21 other testimony that he expects or
22 intends to present, assumes
23 incorrectly that decisions have been
24 made concerning the scope of the
25 testimony that Professor Lacewell will
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
274
1 be proffered for.
2 MR. BURGESS: I really don't care
3 what decisions have been made or
4 haven't been made. I just care what
5 the man's working on, and I'm just
6 trying to figure out what that might
7 be.
8 This document here, the expert
9 witness disclosure statement,
10 obviously as all of us were
11 constrained to do, says that he's
12 expected to have final opinions on
13 October 26, 1992, and that his
14 testimony is going to concern direct
15 economic impacts of the Everglades
16 Restoration Program.
17 It doesn't say the man's a
18 rebuttal witness. It doesn't say he
19 was only going to stand up if we stand
20 up.
21 I'm trying to find out, other
22 than what we've talked about so far,
23 what he has in the hopper, if you
24 will, with respect to direct impacts
25 of the Everglades Restoration
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
275
1 Program.
2 Q. (By Mr. Burgess) Dr. Lacewell, is there
3 anything that you are working on now that in your
4 opinion with respect to the Everglades Restoration
5 Program will yield testimony, expected testimony
6 concerning the direct economic impacts of the
7 Everglades Restoration Program?
8 A. My interactions with Hazen & Sawyer over
9 the next period of time is going to be important in
10 reviewing what the expected impacts are, according
11 to my opinion.
12 Q. Do you have any plans to meet with
13 Hazen & Sawyer?
14 A. Yes.
15 Q. When?
16 A. Monday.
17 Q. Where?
18 A. There.
19 Q. Who else is going to be there?
20 A. Dr. Jones and Dr. Boggess.
21 Q. And what is the agenda for that meeting?
22 A. The agenda is for Dr. Johns to discuss her
23 approach, methodology, the way she looks at doing
24 this, any data she's generated at this point; and to
25 be in a review mode to offer suggestions if we see
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
276
1 need for her to accept or reject as she sees fit.
2 Q. Who organized that meeting?
3 A. I organized that meeting.
4 Q. Did you ask for it?
5 A. I asked Grace Johns if she'd be willing to
6 meet with us.
7 Q. You did?
8 A. Yes.
9 Q. And what was the purpose of your asking to
10 meet with her?
11 A. So that we could see what she's doing, and
12 have some idea of what kind of methodology she's
13 using, what the data's looking like, how she's going
14 about the 20-year analysis.
15 Q. Are you aware, as you sit here today, of
16 any -- I'll say major differences between her
17 10- and 20-year study, let's say, concerning her
18 assumptions or methodology?
19 A. I don't have a chance to interact with
20 her. Very briefly, I think she's going to try to
21 address soil subsidence difference; but she didn't
22 really give me any real insight as to where that may
23 go.
24 I would answer that by saying, we haven't
25 really talked about it so there may be major
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
277
1 differences and I'm just not aware of them.
2 Q. Have you formulated any final opinions
3 which you anticipate you would render at the time of
4 trial of this matter other than final opinions which
5 concern a review of either the efforts of Polopolus
6 and Richardson or Grace Johns?
7 MR. SAXE: I'm going to object.
8 Again, Counsel, the use of the
9 words "anticipate, anticipated expert
10 testimony, expected expert testimony"
11 are not --
12 MR. BURGESS: You've already said
13 the decision hasn't been made.
14 MR. SAXE: Correct. So it's
15 unclear to me how any -- there could
16 be anticipated or expected expert
17 testimony.
18 If you want to ask what testimony
19 the deponent might present, given the
20 scope of the designation, the scope of
21 the expertise, the scope of the work
22 he's doing, I have no problem with
23 that. But I don't understand --
24 MR. BURGESS: You indicated it
25 might mean the same thing so --
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
278
1 MR. SAXE: No. To me there's the
2 significant question of degree; and
3 one is clearly acceptable and the
4 other one is not answerable.
5 So, again, if you want to
6 rephrase your question.
7 MR. BURGESS: Well, you're not
8 instructing him not to answer, are
9 you?
10 MR. SAXE: Well, if you're going
11 to ask the witness about testimony
12 that he expects, intends, or
13 anticipates giving in light of my
14 objection, I'm just going to put on
15 the record that the objection is as I
16 have just stated, basically.
17 MR. BURGESS: Okay. I note your
18 objection, but the question stands.
19 THE WITNESS: Read the question
20 one more time.
21 (WHEREUPON, the requested
22 portion of the record was read
23 by the court reporter.)
24 A. If I were to answer no, how would you
25 interpret that? You asked it differently.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
279
1 Q. (By Mr. Burgess) I don't think it matters
2 how I would react to it.
3 A. Let me try to respond. Maybe --
4 MR. BURGESS: You see, Keith, it was a
5 good question.
6 THE WITNESS: It's very elusive.
7 MR. SAXE: I think the witness
8 has made clear that it's a very
9 unclear question.
10 A. The final opinions that I might come to can
11 be affected by the work that Grace Johns is doing or
12 things that evolve, but from what you've deciphered
13 in two days of deposition, you probably have a
14 fairly clear idea of the kinds of opinions I'm
15 evolving toward.
16 Q. (By Mr. Burgess) So at this point, any
17 final opinions that you might render, your
18 understanding is that those are going to be
19 dependent upon the work of others including
20 Grace Johns?
21 A. For the most part, if there is something
22 left unturned that I think that I might could shed
23 more light on, I will certainly undertake an
24 analysis, maybe not totally unlike something like
25 this (indicating Exhibit 12).
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
280
1 Q. And is there anything that you are now
2 working on shedding more light on?
3 A. No.
4 Q. What is Dr. Bromley working on?
5 A. I haven't visited with Dr. Bromley in
6 sometime, so I cannot answer that question.
7 Q. When did you meet with him the last time?
8 A. I don't know.
9 Q. Last year or -- I mean, in connection with
10 this case.
11 A. I believe it was in 1992.
12 Q. And do you know what he was working on then
13 in connection with this case?
14 A. My impression was that he was looking at
15 these tradeable permits for disposal of phosphorus.
16 Q. What is his area of expertise?
17 A. He's a resource economist.
18 Q. Do you know whether he is working on any
19 natural resource benefit analysis with respect to
20 the Everglades?
21 A. I don't know that. It's my impression he's
22 not.
23 Q. What is Dr. Ozuna working on in connection
24 with the SWIM plan challenge?
25 A. Dr. Ozuna is going to be able to answer
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
281
1 that a whole lot better than I can, but his role was
2 primarily one of a reviewer to look at the study of
3 the benefits of the Everglades that was part of the
4 Hazen & Sawyer expanded contract.
5 Q. How about Dr. Gardner?
6 A. Dr. Gardner is a former Secretary of
7 Agriculture, Assistant Secretary of Agriculture, has
8 been involved in policy, policy analysis, policy
9 formulation; and his primary areas, as I understand
10 it, will be to consider policy.
11 Q. And Dr. Jones, is he working on anything
12 other than what he's working on with you in
13 connection with the SWIM plan challenge?
14 A. Not to my knowledge. I don't think so.
15 Q. Who is -- I think there's been some
16 testimony as to Irwin Hirschhorn. What role has he
17 played in connection with the work you have done?
18 A. Mr. Hirschhorn is in South Florida, and the
19 role he played was in the exhibit that shows the
20 information that he sent back relative to --
21 Q. That would be Exhibit 10?
22 A. 10. Great. Thank you. Oh. That's not
23 the one I'm thinking about.
24 Q. Do you know -- while you're on Exhibit 10,
25 do you know who prepared that analysis that is on
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
282
1 the second page of that fax? Actually it's the
2 first -- not the cover page of the fax, but the --
3 A. The page just beyond the cover page.
4 Q. Stamped "Confidential" at the top. Do you
5 know who prepared that?
6 A. Well, that was probably -- and I'm not
7 positive, Mr. Hirsch --
8 Q. Horn.
9 A. -- horn, in Miami was working with this.
10 Q. The paragraph in the cover page of the fax
11 says in the second sentence, "When we recalculated
12 the bond at 6.5 percent, it resulted in the costs
13 and values for the SWIM plan coming back very much
14 into line with your values."
15 Does the word "your" there mean the values
16 reflected on that second page marked "confidential"?
17 A. Before they're scratched out.
18 Q. Okay.
19 A. Or we sent the fax to Suzanne Ponzoli, so I
20 would assume she was involved in that.
21 Q. But do you know the architect of those
22 numbers that appear on that page?
23 A. I don't know who generated each number.
24 No, I don't know that.
25 Q. And that, in any event, wasn't the exhibit
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
283
1 you were looking at or for with respect to
2 Mr. Hirschhorn?
3 MS. STINSON: There was a document we
4 looked at but was not made an exhibit.
5 A. Oh, that's it. That's right.
6 Q. (By Mr. Burgess) You received a notice of
7 taking deposition in this matter asking for you to
8 produce, I believe, it's five categories of
9 documents. Do you recall that?
10 A. Yes.
11 Q. Have any documents been withheld on the
12 basis of privilege or otherwise that would otherwise
13 be responsive to that list of five documents?
14 MR. SAXE: Counsel, I'll have to
15 answer that question.
16 MR. BURGESS: Well, he can answer
17 whether or not documents have not been
18 provided to his knowledge.
19 He can answer.
20 MR. SAXE: You asked whether
21 documents have been withheld on
22 grounds of privilege that might
23 otherwise have been responsive.
24 And Counsel has been the one
25 responsible for determining whether
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
284
1 privilege applies and withholding a
2 document.
3 MR. BURGESS: Okay.
4 MR. SAXE: So if you want to ask
5 the court reporter, I don't object;
6 but I'm telling you --
7 MR. BURGESS: I'd like to ask the
8 witness whether he has any knowledge
9 as to whether any documents have been
10 withheld that otherwise are
11 responsive.
12 MR. SAXE: Okay. You can answer
13 the question.
14 A. I don't know whether they were responsive,
15 but there are some documents that were withheld by
16 Counsel.
17 MR. BURGESS: And when are we going to
18 get a privileged list, Counsel?
19 MR. SAXE: I can't give you an
20 exact date. It should be quite soon.
21 (WHEREUPON, there was discussion
22 off the record.)
23 Q. (By Mr. Burgess) Let me show you a
24 document dated June 16th and ask you if you can
25 identify that.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
285
1 A. This is a memorandum I sent to
2 Mr. Keith Saxe on June 16th, related to comments on
3 Hazen & Sawyer draft.
4 MR. SAXE: You didn't make an exhibit
5 of this.
6 MR. BURGESS: No, I don't think
7 she did. So if you wouldn't mind, I'd
8 like it the next numbered exhibit.
9 (WHEREUPON, Exhibit No. 13
10 was marked for identification.)
11 MS. STINSON: And what is the date of
12 that document again?
13 THE WITNESS: June the 16th, 1992.
14 Q. (By Mr. Burgess) Do you remember when, in
15 relation to that date, you received a draft copy of
16 the Hazen & Sawyer report?
17 MR. SAXE: Objection; asked and
18 answered, I believe.
19 MR. BURGESS: When?
20 MR. SAXE: Yesterday by --
21 yesterday by your learned colleague --
22 MR. BURGESS: I don't think he --
23 MR. SAXE: -- Ms. Stinson.
24 MR. BURGESS: I don't think he
25 said he could recall when he received
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
286
1 it. I'm asking him when in relation
2 to that date.
3 MR. SAXE: That question is
4 specifically asked. The witness can
5 answer the question. My objection's
6 on the record.
7 A. I don't have the date I received it. It
8 was just before this date because I reviewed it and
9 then sent my ideas to Mr. Saxe.
10 Q. (By Mr. Burgess) And did you send your
11 ideas to Grace Johns, also?
12 A. No, I didn't.
13 Q. Did you talk to her about your ideas?
14 A. We talked on the telephone. It wouldn't be
15 in a specific enumerated concept like this, but we
16 visited about the studies she's doing and editorial
17 comments or misspelled words, yeah.
18 Q. Was it both the impact study and the
19 benefit study that you reviewed draft copies of?
20 A. I did review the benefit study, but I don't
21 think I had any comments. I'd have to look. I
22 don't recall. If they were, they were editorial.
23 MR. BURGESS: I don't have any other
24 questions. Thank you.
25 MR. SAXE: If I could just take a
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
287
1 couple of minutes to review my notes
2 to see whether I have any questions.
3 Basically, if not, we can adjourn.
4 There seems to be an Exhibit 11 --
5 MR. BURGESS: There is an
6 understanding, Keith, that we're
7 providing privileged lists a week in
8 advance; and I seem to be the only one
9 doing it.
10 So until people start doing it
11 back to me, I'm going to refrain from
12 doing it.
13 MR. SAXE: That's not actually
14 consistent with my understanding.
15 MS. STINSON: It's supposed to be
16 10 days after the documents --
17 MR. SAXE: Which were produced --
18 MS. STINSON: -- which would be a
19 week before deposition.
20 MR. SAXE: No. That's --
21 MR. BURGESS: Documents are due
22 three weeks in advance of deposition;
23 and privileged lists, one week before
24 the deposition.
25 As I've said, I've been the only
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
288
1 one apparently doing that.
2 MR. SAXE: I can't speak to
3 whether you have or have not.
4 You know, as I said before, it is
5 my intent to produce the privileged
6 list or that it be produced as quickly
7 as possible; and I expect it will be
8 produced forthwith.
9 MR. BURGESS: Well, I think the
10 whole purpose of having them produced
11 in advance of the deposition was so
12 that we can inquire as to the extent
13 applicable on the record of the
14 witness with respect to the document.
15 MR. SAXE: Well, I think that
16 certainly any concerns in that regard
17 are diluted substantially by the
18 likelihood that we'll be back on the
19 record again about these documents and
20 about these witnesses.
21 But I understand your point, and
22 I share your interest.
23 I just need five minutes to take
24 a quick look and then we can perhaps
25 adjourn.
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
289
1 (WHEREUPON, a recess was taken.).
2 MR. SAXE: I just want to go back on
3 the record for one minute.
4 * * *
5 E X A M I N A T I O N
6 * * *
7 BY MR. SAXE:
8 Q. The exhibit that has been marked as
9 Exhibit 12, Professor Lacewell, if you would look at
10 the page that's entitled "STA and BMP costs in
11 EAA."
12 We've been referring informally to a
13 scratch copy that's not coming into evidence, that
14 is, a copy as it was distributed on the date of
15 Professor's Lacewell's presentation to the Water
16 Management District Board.
17 MS. STINSON: Jones.
18 Q. (By Mr. Saxe) Pardon me, Professor Jones.
19 If you look at the page in the scratch
20 version titled, "STA and BMP costs in EAA," there is
21 some language included in the fifth bullet point
22 down $62.11 and I'm reading now, "$62.11 per cane
23 acre with STA and BMP if allocated uniformly across
24 EAA."
25 The language "if allocated uniformly across
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
290
1 EAA," appears to be omitted from the version that's
2 coming into evidence today.
3 Can you explain for the record how that
4 omission came to be and whether it's inadvertent or
5 intentional?
6 A. Inadvertent omission, and it would be
7 coming from transferring data from disks.
8 MR. SAXE: No further questions.
9 THE REPORTER: Who all needs copies of
10 the transcript?
11 MR. SAXE: I do.
12 MR. BURGESS: Yes.
13 MS. STINSON: Yes.
14 (WHEREUPON, at the hour of
15 5:30 P.M., the deposition was
16 concluded.)
17 * * *
18
19
20
21
22
23
24
25
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
291
1 SIGNATURE OF WITNESS
2 I, RONALD D. LACEWELL, Ph.D., solemnly swear or
3 affirm under the pains and penalties of perjury that
4 the foregoing pages contain a true and correct
5 transcript of the testimony given by me at the time
6 and place stated with the corrections, if any, and
7 the reasons therefor noted on a separate sheet of
8 paper and attached hereto, and that I am signing
9 this before a Notary Public.
10
11 ____________________________
RONALD D. LACEWELL, Ph.D.
12
13 STATE OF T E X A S *
14 COUNTY OF _______________ *
15 SUBSCRIBED AND SWORN TO BEFORE ME by
16 RONALD D. LACEWELL, Ph.D., on this, the
17 _______________ day of ________________, A.D.,
18 1993.
19
_____________________________
20 Notary Public, State of Texas
21
22
23 My Commission Expires: __________________________
24
25 Job 1SUGA.FLOR00/0385
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
292
1 C O R R E C T I O N S T O T H E
2 D E P O S I T I O N O F
3 RONALD D. LACEWELL, Ph.D.
4 PAGE/LINE ** READS ** SHOULD READ ** REASON
5 __________________________________________________
6 __________________________________________________
7 __________________________________________________
8 __________________________________________________
9 __________________________________________________
10 __________________________________________________
11 __________________________________________________
12 __________________________________________________
13 __________________________________________________
14 __________________________________________________
15 __________________________________________________
16 __________________________________________________
17 __________________________________________________
18 __________________________________________________
19 __________________________________________________
20 __________________________________________________
21 __________________________________________________
22 __________________________________________________
23 __________________________________________________
24 ___________________________________
RONALD D. LACEWELL, Ph.D.
25 Job 1SUGA.FLOR00/0385
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
293
1 STATE OF TEXAS *
2 COUNTY OF HARRIS *
3 I, LORI A. BELVIN, a Certified Shorthand
4 Reporter in and for the State of Texas, hereby
5 certify pursuant to the Texas Rules of Civil
6 Procedure and/or agreement of the parties present to
7 the following:
8 That this deposition transcript is a true record
9 of the proceedings held and the testimony given by
10 RONALD D. LACEWELL, Ph.D., the witness named herein,
11 on March 2, 1993, after said witness was duly sworn
12 by me.
13 CERTIFIED TO BY me in Houston, Harris County,
14 Texas, on this, the ______ day of ____________,
15 A.D., 1993.
16
17
18 __________________________________
LORI A. BELVIN
19 Certified Shorthand Reporter
Notary Public, The State of Texas
20 Cert. No.: 2572 Exp.: 12/31/93
21 LOONEY & COMPANY
8 Greenway Plaza, Suite 920
22 Houston, Texas 77046
(713) 621-8572
23
24
25 Job 1SUGA.FLOR00/0385
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
294
1 STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
2
SUGAR CANE GROWERS COOPERATIVE OF)
3 FLORIDA, INC., ROTH FARMS, INC., )
and WEDGWORTH FARMS, INC., )
4 )
and )
5 )
FLORIDA SUGAR CANE LEAGUE, INC., )
6 UNITED STATES SUGAR CORPORATION )
and NEW HOPE SOUTH, INC., )
7 )
and )
8 )
FLORIDA FRUIT AND VEGETABLE )
9 ASSOCIATION, LEWIS POPE FARMS )
W.E. SCHLECHTER & SONS, INC., and)
10 HUNDLEY FARMS, INC., )
)
11 Petitioners, )
)
12 v. )
)
13 SOUTH FLORIDA WATER MANAGEMENT )
DISTRICT, )
14 )
Respondent, )
15 )
and )
16 )
MICCOSUKEE TRIBE OF INDIANS OF )
17 FLORIDA, the UNITED STATES OF )
AMERICA, FLORIDA DEPARTMENT )
18 OF ENVIRONMENTAL REGULATION, and )
FLORIDA WILDLIFE FEDERATION, )
19 )
Intervenors. )
20
21 ---------------------------------------------------
REPORTER'S CERTIFICATE/FILING CERTIFICATE
22 DEPOSITION OF RONALD D. LACEWELL, Ph.D.
VOLUME II
23 TAKEN ON MARCH 2, 1993
---------------------------------------------------
24
25 I, Lori A. Belvin, a Certified Shorthand
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
295
1 Reporter in and for the State of Texas, hereby
2 certify pursuant to the Texas Rules of Civil
3 Procedure and/or agreement of the parties present to
4 the following:
5 That the deposition transcript is a
6 true record of the testimony given by RONALD D.
7 LACEWELL, Ph.D., the witness named herein, on
8 March 2, 1993, after said witness was duly
9 sworn/affirmed by me.
10 That $______________ is the charge for
11 the preparation of the completed deposition
12 transcript, and any copies of exhibits charged
13 to MS. DONNA H. STINSON, Attorney for the
14 Petitioners;
15 That the original signature page and
16 correction sheet were sent to MR. KEITH E. SAXE,
17 along with their ordered copy of the deposition
18 transcript, for examination and signature by the
19 witness and return to Looney & Company by
20 ____________________, 19__.
21 That the original transcript
22 ______ was/ ______ was not returned to the
23 deposition officer by the witness.
24 That the original deposition transcript,
25 or a copy thereof, together with copies of all
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
296
1 exhibits, was delivered on _________________ to
2 MS. DONNA H. STINSON, Attorney for the
3 Petitioners;
4 That pursuant to the information made a
5 part of the record at the time said testimony was
6 taken, the following includes all parties of record:
7
8 MS. DONNA H. STINSON, Attorney for SUGAR CANE
GROWERS COOPERATIVE OF FLORIDA, INC., ET AL.;
9
MR. RICK J. BURGESS, Attorney for FLORIDA SUGAR
10 CANE LEAGUE, INC., ET AL.;
11 MR. KEITH E. SAXE, Attorney for UNITED STATES OF
AMERICA.
12
13 That a copy of this certification was
14 served on all parties shown herein.
15 CERTIFIED TO on this _________ day of
16 ________________, A.D., 1993.
17
18 _______________________________
LORI A. BELVIN
19 Certified Shorthand Reporter
The State of Texas
20 Cert. No.: 2572 Exp. Date: 12/31/93
21 LOONEY & COMPANY
8 Greenway Plaza, Suite 920
22 Houston, Texas 77046
(713) 621-8572
23
24
25 Job No. 1SUGA.FLOR00/0385
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125
297
1 DELIVERY ACKNOWLEDGMENT
JOB NO. 1SUGA.FLOR00/0385
2 STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
3
SUGAR CANE GROWERS COOPERATIVE OF)
4 FLORIDA, INC., et al. )
Petitioners, )
5 )
v. )
6 )
SOUTH FLORIDA WATER MANAGEMENT )
7 DISTRICT, )
)
8 Respondent, )
)
9 and )
)
10 MICCOSUKEE TRIBE OF INDIANS OF )
FLORIDA, et al. )
11 )
Intervenors. )
12 --------------------------------------------------
ORAL DEPOSITION OF RONNIE D. LACEWELL, Ph.D.,
13 VOLUME II
TAKEN ON MARCH 3, 1993
14 --------------------------------------------------
MS. DONNA H. STINSON MR. KEITH E. SAXE
15 123 South Calhoun St. 601 Pennsylvania NW
P. O. Box 6526 Avenue NW
16 Tallahasee, FLA 32301 Room 879
Washington, D.C. 20004
17 MR. RICK J. BURGESS
One Biscayne Tower
18 Suite 3636
Two South Biscayne Boulevard
19 Miami, FLA 33131
I hereby acknowledge the receipt of a/an ___
20 original ___ copy of the following items (s)
pertaining to the above numbered and styled cause.
21 ___ Deposition (s) ___ Sworn Statement (s)
___ Certified Questions ___ CNA (s)
22 ___ Affidavit (s) ___ Deposition Summary (s)
___ Exhibits ___ Videotape (s)
23 ___ Ascii Disk (s) ___ Minuscript (s)
___ Signature Pg (s) ___ Correction Sheet (s)
24 ___ Certification Pg (s) ___ Notice of Filing (s)
___ Invoice (s) ___ Other:________________
25 By:_____________ Date:__________ Time:_________
PARLIAMENTARY REPORTING OF FLORIDA, INC.
800-521-9125