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
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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
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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
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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
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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 . . . . . . . . . . . . . . .
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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
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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
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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
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23
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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
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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
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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?
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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?
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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
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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
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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
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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
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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
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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
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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."
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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?
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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."
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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?
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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
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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.
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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.
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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?
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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.
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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.
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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
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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
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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?
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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?
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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
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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?
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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?
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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.
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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 --
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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
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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.
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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
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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
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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
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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
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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?
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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
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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
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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
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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.
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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.
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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
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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?
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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.