0001 01 DIVISION OF ADMINISTRATIVE HEARINGS 01 DEPARTMENT OF ADMINISTRATION, STATE OF FLORIDA 02 02 SUGAR CANE GROWERS COOPERATIVE OF ) 03 FLORIDA, a Florida agricultural ) 03 cooperative marketing association; ROTH ) 04 FARMS, INC.; AND WEDGWORTH FARMS, INC., ) 04 ) 05 and ) 05 ) 06 FLORIDA SUGAR CANE LEAGUE, INC.; UNITED ) 06 STATES SUGAR CORPORATION; AND NEW HOPE ) 07 SOUTH, INC., ) 07 ) 08 and ) 08 ) 09 FLORIDA FRUIT AND VEGETABLE ASSOCIATION,) 09 LEWIS POPE FARMS, W.E. SCHLECHTER & ) 10 SONS, INC., and HUNDLEY FARMS, INC., ) 10 Petitioners, ) 11 ) 11 vs. )CASE NOS. 92-3038 12 ) 92-3039 12 SOUTH FLORIDA WATER MANAGEMENT DISTRICT ) 92-3040 13 an Agency of the State of Florida, ) 13 ) 14 Respondent, ) 14 ) 15 and ) 15 ) 16 THE UNITED STATES OF AMERICA, ) 16 MICCOSUKEE TRIBE OF INDIANS, the ) 17 FLORIDA DEPARTMENT OF ENVIRONMENTAL ) 17 REGULATION, the FLORIDA WILDLIFE ) 18 FEDERATION, et al ) 18 ) 19 Respondent-Intervenors ) 19 20 20 21 ************************************** 21 22 DEPOSITION OF F. LARRY LEISTRITZ 22 23 ************************************** 23 24 VOLUME I 0002 01 On the 8th day of February, A.D., 1993, between 02 the hours of 9:10 A.M. and 12:30 P.M. and 1:50 P.M. and 03 5:30 P.M. in the offices of the United States Attorney's 04 Office, 816 Congress Avenue, Suite 650, Austin, Texas, 05 before me, DOTTIE NORMAN, a Certified Shorthand Reporter 06 in and for the State of Texas, appeared F. LARRY 07 LEISTRITZ, who, being by me first duly sworn, gave his 08 oral deposition at the instance of the United States of 09 America in said cause. 10 This deposition is being taken in accordance 11 with the Federal Rules of Civil Procedure. 12 ************ 0003 01 APPEARANCES 01 02 For the Sugar Cane Growers Cooperative of Florida, 02 a Florida agricultural cooperative marketing 03 association; Roth Farms, Inc.,; and Wedgworth Farms, Inc.: 03 04 HOPPING, BOYD, GREEN & SAMS 04 By: DONNA STINSON 05 Post Office Box 6526 05 Tallahassee, FL 32314 06 06 For The United States of America: 07 By: ROBERT ROSENBERG 07 Assistant United States Attorney 08 Southern District of Florida 08 155 South Miami Avenue 09 Miami, Florida 33130 09 10 -and- 10 11 KEITH E. SAXE 11 U.S. Department of Justice 12 Environmental and Natural Resources 12 Division 13 P.O. Box 663 13 Washington, D.C. 20044-0663 14 14 15 Also Present: Lonnie Jones 15 Ron Luke (until lunch recess only) 16 16 17 17 18 INDEX 18 19 Page 19 Direct Examination by Mr. Rosenberg 6 20 20 21 21 0004 01 EXHIBITS 01 Page 02 Deposition Exhibit No. 1 8 02 Personal Resume of F. Larry Leistritz 03 03 Deposition Exhibit No. 2 21 04 Letter dated 2-3-93 04 to Rosenberg from Leistritz 05 05 Deposition Exhibit No. 3 41 06 Memorandum dated 8-19-92 06 to Leistritz from Luke 07 07 Deposition Exhibit No. 4 51 08 Letter dated 10-13-92 08 to Luke from Leistritz 09 with Enclosures 09 10 Deposition Exhibit No. 5 53 10 Facing Economic Adversity: Experiences 11 of Displaced Farm Families in North Dakota 11 12 Deposition Exhibit No. 6 68 12 The Consequences of the Farm Crisis 13 for Rural Communities 13 14 Deposition Exhibit No. 7 82 14 Economic Impact of Leafy Spurge 15 15 Deposition Exhibit No. 8 106 16 Economic Impacts of New and Expanding 16 Firms in the Upper Great Plains 17 17 Deposition Exhibit No. 9 111 18 Socioeconomic Impact of the Conservation 18 Reserve Program in North Dakota 19 19 Deposition Exhibit No. 10 114 20 Landowner Characteristics and the Economic 20 Impact of the Conservation Reserve Program 21 in North Dakota 21 22 Deposition Exhibit No. 11 140 22 Rural Environments 23 23 Deposition Exhibit No. 12 152 24 The Economic Contribution of the Sugarbeet 24 Industry of Eastern North Dakota and Minnesota 25 25 0005 01 Deposition Exhibit No. 13 157 01 Contribution of Public Land Grazing 02 to the North Dakota Economy 02 03 Deposition Exhibit No. 14 159 03 Developing Economic-Demographic Assessment 04 Models for Substate Areas 04 05 Deposition Exhibit No. 15 197 05 Task Description 06 06 Deposition Exhibit No. 16 207 07 Memorandum dated 7-1-92 07 to Rhoads from Johns 08 08 Deposition Exhibit No. 17 209 09 Handwritten Notes 09 10 Deposition Exhibit No. 18 211 10 Handwritten Notes 11 11 Deposition Exhibit No. 19 212 12 Handwritten Notes 12 13 Deposition Exhibit No. 20 212 13 EAA Poverty Profile 14 14 Deposition Exhibit No. 21 214 15 Sugarcane Outline Labor Market 15 16 Deposition Exhibit No. 22 215 16 EAA Farm Worker Profile 17 17 Deposition Exhibit No. 23 216 18 Handwritten Notes titled 18 "Everglades Report" 0006 01 F. LARRY LEISTRITZ, 02 the witness hereinbefore named, being first duly cautioned 03 and sworn to testify the truth, the whole truth and 04 nothing but the truth, testified as follows: 05 DIRECT EXAMINATION 06 QUESTIONS BY MR. ROSENBERG: 07 Q. Professor Leistritz, I'm Robert Rosenberg. I'm 08 an Assistant United States Attorney. I will be taking 09 your deposition today and tomorrow also. 10 Let me talk to you about a couple of 11 matters first. If you can't answer a question because I 12 haven't formed it properly or spoken too quickly, it 13 doesn't make sense to you, please tell me. I'll try to 14 repeat or reconstruct the question as needed. 15 A. Yes. 16 Q. If you don't know something in response to a 17 question, it's permissible to say, "I don't know. I don't 18 know that." 19 We're here not to trick you, but we are 20 here to seek information. 21 A. Yes. 22 Q. And I'll try to be as direct as possible in my 23 questions. I'm not an economist and so I would be asking 24 you to define terms. Sometimes expert witnesses throw 25 jargon around. 0007 01 A. Yes. 02 Q. Somebody is going to read this deposition, and 03 that person may not be an economist. So I may ask you, if 04 you could, to define some terms. That would be helpful I 05 think. 06 A. Yes. 07 (At this time there was a brief discussion 08 off the record.) 09 QUESTIONS BY MR. ROSENBERG: 10 Q. If you want a break for one reason or another, 11 just tell me. 12 A. Okay. 13 Q. We'll try to be fairly liberal with breaks 14 here. Just say so. I will ask, however, that when you 15 answer questions you answer verbally. 16 A. Yes. 17 Q. Nods and uh-huhs and things like that can't be 18 picked up. If you are referring to a document -- and I'll 19 try to do the same thing -- refer to it by the exhibit 20 number as opposed to this or that, things like that. 21 Sir, do you have your curriculum vitae with 22 you? Did you bring a curriculum vitae? 23 A. I did not bring -- I do not have an extra copy. 24 Q. Let me go through that with you. Allow me to do 25 this if I can. Let me hand you this. 0008 01 A. Yes. 02 Q. And I think we may want to mark that as an 03 exhibit. That is a little thicker than the document your 04 counsel gave you. 05 A. Right. 06 Q. That appears to me to be a curriculum vitae 07 together with a collection of publications, list of 08 publications. 09 A. Yes. 10 Q. Would you look that over for me and tell me if 11 that is complete. 12 A. Uh-huh. 13 (The instrument referred to was here marked 14 as Deposition Exhibit No. 1 for identification.) 15 THE WITNESS: Yes, sir. The document 16 labeled Exhibit 1 is complete as of August 1992. There 17 might be a few more publications that have occurred since 18 then. 19 QUESTIONS BY MR. ROSENBERG: 20 Q. Okay. My understanding is that you have at 21 least 250 publications. 22 A. Something on that order. 23 Q. Am I right? 24 A. Yes. 25 Q. When we talk about publications, just for my 0009 01 reference, does that include studies you have undertaken 02 or research projects you have undertaken? 03 A. Yes. 04 Q. And impact statements you have done? 05 A. Yes, uh-huh. 06 Q. So the 250 documents would include every 07 document you have generated whether it's a book, an 08 article, impact statement or study report? 09 A. The attempt was to list all of those here, that 10 is research reports, books, journal articles and the 11 like. 12 Q. Okay. Would you state for me your educational 13 background starting with your high school, please? 14 A. Okay. Yes. I graduated from Rushville Public 15 High School in Nebraska in 1963. I received my Bachelor's 16 degree in Agricultural Economics at the University of 17 Nebraska-Lincoln in 1967; Master's degree in Agricultural 18 Economics, University of Nebraska, 1968; and completed my 19 Ph.D. at the University of Nebraska in 1970. 20 Q. At any time did you undertake any other 21 training, whether it's reflected in your academic 22 credentials or not, that bears in any way on the work you 23 have done in the present case? 24 A. In terms of formal training, classes? 25 Q. Or seminars or conferences or other matters, any 0010 01 training sessions. 02 A. Okay. We have, of course, participated in a 03 great variety of scientific conferences both in the U.S. 04 and abroad but no essentially formal training programs as 05 such. 06 Q. Did any of those -- did any of those conferences 07 concern economic impacts regarding water resources? 08 A. Certainly. Yes. 09 Q. Which ones? 10 A. Oh -- well, many of our scientific conferences 11 will cover -- will cover a broad range of topics. Like 12 our annual conferences of our Agricultural Economics 13 Association will typically have -- will have within them 14 special sessions or symposia dealing with such topics as 15 water resource projects or community impacts and that sort 16 of thing. 17 Another association that I've been active 18 in in recent years is the International Association for 19 Impact Assessment. And, again, these conferences, which 20 are a multiday affair, will have -- will have within them 21 then special sessions on perhaps economic impacts or 22 alternative ways of measuring economic impacts, community 23 impacts of natural resource development and the like. 24 Q. Are these people presenting papers? Is that 25 what is happening? 0011 01 A. Yes, that's a very typical format. There are 02 some variations. Sometimes they are termed symposia or 03 round tables or whatever. It's basically presentation of 04 papers, that sort of thing. 05 Q. But those aren't actual training sessions? 06 A. Right. 07 Q. Those are simply a gathering of -- 08 A. Yes, and reporting. 09 Q. -- people like you? 10 A. Yes, uh-huh, people like myself reporting on 11 things that they have been doing. 12 Q. Would you describe for me your employment 13 history in chronological order starting from your 14 undergraduate days? 15 A. Okay. Yes. As an undergraduate, I was employed 16 on an hourly basis in the Department of Economics, in the 17 Department of Agricultural Economics. As a graduate 18 student, I also was employed by the Nebraska Agricultural 19 Experiment Station as a graduate research assistant. 20 During that period of time, I worked on a study of the 21 Nebraska land market. And we -- it's had about three 22 different publications resulting from that work. 23 Q. Do me a favor. Give me years when you say this 24 or ranges of years. 25 A. Yes. This was -- graduate school was 1967 to 0012 01 1970. Okay. In 1970 I joined the faculty at North Dakota 02 State University in the Department of Agricultural 03 Economics. I have been a faculty member at North Dakota 04 State University ever since. This included one year when 05 I was on leave and spent 1978-79 as a visiting -- as a 06 visiting professor at Texas A&M University. I also, 07 during the period 1975 to 1978, was on loan on a half-time 08 basis from the university to our state legislative 09 counsel, the legislative research -- 10 Q. State of North Dakota? 11 A. State of North Dakota, yes. So I guess those 12 would be -- also during the period 1979 to 1982 at North 13 Dakota State University I was attached on a half-time 14 basis to our University Office of -- Office of Research 15 Administration and had the title Director of Sponsored 16 Programs during that period. 17 Q. What did that mean? 18 A. Grants and contracts. We were essentially 19 trying to establish a grant and contract office there at 20 the school, provide information to people who are working 21 on grant proposals and that sort of thing. But 22 essentially from 1970 up to date I've been a faculty 23 member there in agricultural economics at North Dakota 24 State University. 25 Q. So on one side your formal employment has been 0013 01 as a professor or as a teacher -- 02 A. Uh-huh. 03 Q. -- at North Dakota State? 04 A. Uh-huh. 05 Q. Have you had other employment, that is contract 06 employment, project employment in that period? 07 A. Yes. In fact, we've engaged in quite a wide 08 variety of grant and contract research. Most -- 09 Q. When you say "we," I'm not sure who the we is. 10 A. I have been engaged in quite a variety of grant 11 and contract research, often in association with other 12 faculty members and also generally -- many of these 13 projects would involve other individuals who did a lot of 14 the work. I would sometimes call them research assistants 15 and the like. I guess that over the -- over the 22 years 16 that I've been at North Dakota State University, I have 17 acted as project leader or project director, some such 18 title, for grant and contract projects something in excess 19 of three million dollars. 20 Q. How many projects was that? 21 A. Okay. I would have to go back and count. 22 Q. You can -- a round figure will do. 23 A. 30 or more. 24 Q. When you were working with these projects, was 25 that actual hands-on work or were you simply the 0014 01 coordinator several levels above the project? 02 A. Much of it we could say -- we could say most of 03 it would be actual hands-on work. 04 Q. And what -- what types of projects were these? 05 A. Okay. Again covering quite a range of subject 06 matter, but generally relating to economic impacts or 07 economic implications of different kinds of research 08 development alternatives including water projects, 09 including projects where we looked at the "economic 10 contribution" or economic impact of different industries 11 in the state or the region such as the sugarbeet industry 12 in the Red River Valley of North Dakota, Minnesota, the 13 potato industry in the Red River Valley and so on. The 14 general theme then would be economic impacts really, 15 economic including fiscal impacts of natural resource. 16 MR. SAXE: Off the record for a minute. 17 (At this time there was a brief discussion 18 off the record, during which time Ron Luke entered the 19 room.) 20 QUESTIONS BY MR. ROSENBERG: 21 Q. So these 30 or so projects were in the nature of 22 economic impact projects? 23 A. Right. 24 Q. Economic impact assessments? 25 A. Right. And most -- the result of most of those 0015 01 was one or more research reports. So as you look through 02 the list of research reports, you get a pretty good idea 03 of the subject matter of these projects. 04 Q. I looked at one called leafy spurge. 05 A. Yes. 06 Q. Is that in there? 07 A. Yes. Uh-huh. 08 Q. What is that leafy spurge thing about? 09 A. Leafy spurge is a perennial weed, a noxious 10 weed, which is widespread in the Northern Plains Region of 11 the U.S. and into Canada. It is a serious economic 12 problem for people that raise cattle in North Dakota, 13 Montana and some of the adjacent states. 14 The plant -- it spreads both by seed and by 15 rhizomes. It will form virtually a mono-cultural 16 community or stand. Cattle won't eat it. In fact, in 17 quantities it's poisonous to cattle. 18 Anyway, we were asked to take -- to 19 basically make an assessment of the economic impact of 20 leafy spurge to the livestock industry. 21 Q. You did that? 22 A. Yes, we did that. 23 Q. I asked you a question earlier -- I asked you a 24 question: Is there any other training that bears on the 25 work you have done in this case? 0016 01 You told me about the seminars. Let me be 02 more specific. 03 Was there any other specific training, 04 other than your academic training, that bears in any way 05 on the work you have done in this case, anything you can 06 point to specifically? 07 A. In terms -- I don't -- 08 Q. In terms of a postgraduate course of some sort 09 or postdoctoral course, in terms of an extended seminar 10 where the subject matter was such that it was useful in 11 this case? 12 A. I wouldn't identify -- I don't think I can 13 identify specific formal courses. We have obviously 14 prepared several books, some of which have been -- some of 15 which are used as texts for some of the courses that you 16 are talking about. 17 Q. Have you ever had a Florida study or Florida 18 case that you worked on? 19 A. No. This is the first one. 20 Q. Are you familiar with the Florida State 21 requirements, whether statutory or regulation requirements 22 in Florida? 23 MS. STINSON: I object to the form; 24 overbroad. 25 MR. ROSENBERG: Let me back up. 0017 01 QUESTIONS BY MR. ROSENBERG: 02 Q. Regarding economic impact statements, economic 03 impact studies, are you familiar with Florida statutory or 04 Florida regulatory requirements? 05 A. This is a topic that we're planning to pursue 06 further. I have not had -- I have not had opportunity to 07 study -- study the Florida regulatory requirements and so 08 on in detail at this point. 09 Q. When are you planning this? Where does this fit 10 in? 11 A. Okay. As our study progresses here over the 12 next few months basically, we would, of course, be 13 examining the Florida requirements and so on in additional 14 detail. 15 Q. Are you familiar with Florida water law 16 requirements, statutory or regulatory? 17 A. No, not in any detail. 18 Q. Is this the first contact you have had with an 19 economic impact study or statement in the State of 20 Florida? 21 A. Yes. 22 Q. Have you ever taught any courses that relate to 23 your work in this case? 24 A. Yes. I have taught on several occasions a 25 course in what we have termed socioeconomic impact 0018 01 assessment where we cover economic impacts, demographic 02 impacts, public service effects, fiscal impacts, and 03 including also mitigation measures and this sort of 04 thing. 05 Q. Let me back up. 06 The term "socioeconomic impact" -- would 07 you define that for me? 08 A. Yes. The socioeconomic impact studies are 09 generally regarded as including some or all of the 10 following components: Economic impacts, which have 11 generally been the effects of a particular action or 12 policy or program on -- 13 Q. Or stimulus of any sort? 14 A. Stimulus on employment and on levels of business 15 activity in different economic sectors, for instance, 16 changes in retail, in the sales volume in the retail trade 17 sector, or changes in the level of income and activity in 18 the construction sector. So that would be the economic 19 impacts. 20 Demographic impacts would be a second major 21 component of many of these studies. This has basically 22 been changes in the number and composition of the 23 population of a given area, be it a state, a county, a 24 town. 25 Public service impacts, that is changes in 0019 01 demands for different kinds of public services -- 02 Q. Is this a third phase? 03 A. That would be a third phase, would be the public 04 services: education, healthcare and the like. 05 Fiscal impacts, basically then changes in 06 costs and revenues of governmental units, would be -- 07 Q. Is this another phase, the fourth phase? 08 A. Would be the fourth phase. 09 So we said economic, demographic, public 10 service, fiscal. I guess the last phase which is often 11 addressed is the "social impacts". And the latter 12 component would be -- would be one that I have not dealt 13 with to any great extent. 14 Q. Tell me if I have it right. 15 A socioeconomic impact takes -- the first 16 part or first phase is economic impact, and that is a 17 direct impact of the stimulus, indirect impact of the 18 stimulus -- 19 A. Yes, uh-huh. 20 Q. -- and the induced impact of the stimulus? 21 A. Right. 22 Q. And that would be the economic impact assessment 23 part of this thing? 24 A. Right. Uh-huh. 25 Q. The second phase -- not necessarily related to 0020 01 the first, is it -- is a demographic study? Is that 02 true? 03 A. Right. Yeah. 04 Q. A third phase would be -- well, fiscal is the 05 fourth phase. 06 A. So the public services I guess. 07 Q. The public service sector is the third phase? 08 A. Uh-huh. 09 Q. Is this sequential? 10 A. Very often -- we often think of the economic 11 changes as often being a stimulus then to changes in 12 population, for instance, with expanded economic activity 13 creating more jobs and leading to an inmigration of 14 population or conversely, for instance, if you were 15 looking at a situation of, say, closing a military base, 16 with the closing of the base then there are secondary 17 impacts leading to reduced business activity, reduced 18 employment which might be seen as likely to lead to the 19 outmigration of a portion of a population. 20 Q. You are in a demographic stage right now. 21 A. So we often see the demographic impacts as being 22 at least in part affected by, driven by economic changes. 23 The changes in population then are typically one of the 24 major factors that are seen as causing changes in public 25 service requirements, people moving in bringing children 0021 01 that need to go to school. And the changes in public 02 service demands, requirements then are one of the major 03 factors that lead to the change -- well, that affect the 04 costs and revenues of governmental units, public service 05 requirements affecting then the costs for the 06 jurisdictions that need to provide the services. 07 Q. So my question was: Are these sequential? And 08 I think you are telling me the answer -- 09 A. I'm saying the answer is generally yes in large 10 measure. 11 Q. And they would all flow from that first economic 12 impact statement, either demographics or the public 13 sector, fiscal? 14 A. Uh-huh. The economic changes would be seen as 15 affecting the demographic, the public service and the 16 fiscal, yes. 17 Q. In this case I have here -- I'm sorry -- a 18 letter of February 3rd from you to me. 19 A. Right, saying here are a lot of documents. 20 Q. Is that your letter to me, February 3rd? 21 A. Yes. 22 (The instrument referred to was here marked 23 as Deposition Exhibit No. 2 for identification.) 24 QUESTIONS BY MR. ROSENBERG: 25 Q. Do you recall what documents you sent with 0022 01 that? 02 A. Yes. You had sent a list, basically pages 03 copied out of my vitae, where you had checked off 04 documents that you wanted us to -- of which you wanted us 05 to provide a copy. And I believe the set of documents 06 that I sent to you then was essentially everything you had 07 marked, I think, with possibly -- I believe there was one 08 or possibly two documents I couldn't immediately put my 09 fingers on. But it was essentially then a couple of 10 books, a number of research reports, and quite a number of 11 journal articles, book chapters and the like. 12 MS. STINSON: For the record, I asked him 13 to do it directly to save the day's mailing time. 14 (At this time there was a brief discussion 15 off the record.) 16 QUESTIONS BY MR. ROSENBERG: 17 Q. Have you ever conducted a cost/benefit study? 18 A. Not a formal cost/benefit study per se. 19 Q. What types of cost/benefit studies have you 20 conducted? 21 A. Okay. Certainly many of the studies that we 22 have been involved in would include -- would include some 23 of the elements that are often included in a cost/benefit 24 study. And certainly some of these economic impact 25 assessments would fall under that category. 0023 01 Q. What are these elements? 02 A. Okay. Well, for instance, the benefits to 03 different groups, different economic sectors from -- well, 04 looking, for instance, at some of this work with the leafy 05 spurge and so on, we are looking at the cost to the 06 livestock growers from expanded leafy spurge infestations. 07 And then the people who were sponsoring the study, 08 basically the USDA group that are involved in different 09 programs to control noxious weeds, would be looking at the 10 costs of the weed infestations to the stockmen. That could 11 also be looked at as a benefit from a more effective weed 12 control program. Similarly then we were looking at also 13 the effects for other sectors of the state economy. 14 Q. Let me back up. 15 When economists refer to cost/benefit 16 studies, that term means something to them. 17 A. Yes. 18 Q. What does that mean to you? 19 A. Okay. Cost/benefit studies typically are an 20 attempt to make as comprehensive as possible an assessment 21 or a statement of the costs of a particular action and the 22 benefits, including non -- including what are often termed 23 non-market benefits or costs. And then basically -- 24 basically also identify those groups that would be -- that 25 would be experiencing the costs or receiving the 0024 01 benefits. And, of course, then the -- what I would see as 02 one of the hallmarks of a cost/benefit study, as I 03 understand it, is the effort to come up with a formal 04 cost/benefit ratio which is then an effort to -- through 05 this cost/benefit ratio to determine whether the project 06 should be seen as desirable or undesirable. 07 Q. If I understand your testimony, you have never 08 directly done a cost/benefit study; am I correct? 09 A. We have never done a -- I have never done a 10 study where we attempted to ultimately come up with a 11 final cost/benefit ratio for a project. 12 Q. Instead, in some of your economic impact studies 13 you have shown where there would be benefits to certain -- 14 A. Right. 15 Q. Certain entities? 16 A. Right, and costs to certain entities. 17 Q. When a cost/benefit study is conducted, does it 18 list benefits to other sectors in the economy or in 19 society? 20 A. Okay. There are different -- there are 21 different viewpoints about the appropriateness of 22 including "secondary benefits," for instance. And 23 different -- so there are -- there are different 24 viewpoints whether the secondary benefits to other sectors 25 should be included and in what way. 0025 01 Q. When you did your studies, did you -- even 02 though they weren't formal, they were informal, did you in 03 your economic impact studies relate to these other 04 sectors? 05 A. Yes. Well, I think the issue associated with 06 this "secondary impacts" or "secondary benefits" has to do 07 with basically the area -- well, one could say has to do 08 with one's accounting stance. That is to say if a 09 particular action is to be taken -- let's say in the 10 Austin, Texas area we're going to build a water project or 11 something of that nature. Okay. This will have -- there 12 will be direct effects in terms of additional employment 13 and so on. There will also be secondary effects. 14 The debate, as I understand it, about 15 whether to include -- whether and in what way to include 16 secondary benefits has to do with whether the secondary 17 effects of building the project in the Austin, Texas area 18 is really just a transference of activity that otherwise 19 would occur somewhere else. Okay. And if, on the other 20 hand, the -- so if the question relates to the 21 desirability of investing, say, Federal funds to build a 22 project in the Austin, Texas area versus using those funds 23 for some other purpose or building something in Florida, 24 then one can say perhaps -- one can argue that some of 25 these secondary effects are sort of a wash. 0026 01 On the other hand, if the objective is to 02 try to identify what will be the effects of building the 03 project for the communities nearer where the project is 04 built, then very definitely the secondary effects are just 05 as relevant as the direct effects in terms of trying to 06 describe what's the change in employment, what's the 07 change in population, public services and so on. 08 Q. I was going to ask you. Would you define 09 "secondary effects" for me. That's one of those terms 10 economists know what it means. Other people like me may 11 not. 12 A. It's also possible -- good to define these 13 terms. 14 If we were thinking about a water project 15 or something like this, we might talk about the direct 16 effects basically involving the people actually employed 17 building the facilities, the companies that -- the 18 expenditures made directly by the project proponent to 19 local firms for supplies, materials and the like. 20 Q. Those are direct effects? 21 A. Direct effects, also sometimes referred to as 22 first-round effects. Okay. 23 Then the secondary effects are those that 24 result from subsequent rounds of spending. For instance, 25 we said that the people employed directly on the project 0027 01 and their wages and so on -- that would be part of the 02 first round or direct effects. Okay. These construction 03 workers then spend part of their income at local stores or 04 for lodging at local motels and so on. So then the 05 additional receipts by the motel owners, the shopkeepers 06 and so on -- that would be part of the secondary effects. 07 Q. Is that the same as an indirect effect? 08 A. Yes. Indirect or secondary are -- 09 Q. Synonymous? 10 A. -- used pretty much synonymously. 11 Q. Then what is an induced effect? 12 A. Some would use secondary and indirect 13 synonymously. To some, when the term "induced" is used, 14 the meaning there or the distinction is that the induced 15 effects are those that flow from the -- from people 16 spending their additional income, additional spending by 17 households as distinguished from indirect effects that 18 would flow from the expenditures of a project for supplies 19 and materials and the like. 20 Q. Give me an example in the instance you are 21 telling us about the project that comes here, the laborers 22 get some money. 23 A. Right. 24 Q. What is the induced effect, for example? 25 A. The induced effects would come both from the 0028 01 laborers spending their additional income and also the 02 shopkeepers, the motel owners and so on that we referred 03 to as a result of selling more goods in the shop, as a 04 result of having higher occupancy in the motel. Part of 05 that additional revenue becomes income to the proprietor 06 or income to people that work in these establishments. 07 They, in turn, then will typically spend some of their 08 additional income locally for goods, services and the 09 like. 10 The distinction is perhaps most important 11 when one gets into the actual -- what one might say the 12 mechanics of estimating the impacts or estimating the size 13 of the "multiplier effect" through such devices as 14 input/output models and so on. There are -- multipliers 15 have been computed either -- both alternatively including 16 and excluding the "induced effects". 17 Fundamentally you get different numbers, 18 different multipliers, depending on whether you include or 19 exclude the induced effects. 20 Q. In your answer -- tell me if I got it right. I 21 may not. You use a term "spent locally". 22 A. Yes. 23 Q. Now, is there a component in this system here of 24 geographic area? 25 A. Okay. When we refer to expenditures made 0029 01 locally, what we're really referring to is we -- as we 02 attempt to assess the impact of a project, it is important 03 early on to identify basically the bounds of the study 04 area, the area of interest or whatever term we might be 05 using. Region of influence is a term that's also 06 sometimes used. Then expenditures within this region of 07 influence study area or whatever are typically referred to 08 as local expenditures. Essentially, we have divided the 09 world into the region of interest and the rest of the 10 world. 11 Q. How is that done? 12 A. Okay. Well, there are at least I think two 13 answers to the question. One depends on essentially the 14 objectives or the impetus for the study. If, for 15 instance, one of the concerns was to somehow measure the 16 impacts, the costs and benefits, if you will, for, let's 17 say, the state, the State of Florida, the State of Texas, 18 then you would be concerned about all expenditures that 19 were made within the state. 20 Very typically, though, if the -- and this 21 is often done. Okay. Very typically, if the interest is 22 primarily in trying to measure the impacts on those 23 communities that would -- that would somehow be directly 24 affected by the project, then the study area or region of 25 influence would be defined based on several criteria, one 0030 01 being where will the people that actually are working on 02 the project likely live, where are those communities where 03 the people will live. 04 Another factor and also an important factor 05 may be regional trade patterns. Okay. For instance, 06 while the people actually working on the project may live 07 in several small communities near the project site, they 08 may do a great -- the regional trade patterns may suggest 09 that they will do a great deal of their shopping and so on 10 in a more distant sort of regional trade center. 11 In this case, at least for some purposes, 12 one might wish to include the relevant regional trade 13 center in one's analysis, at least for some purposes. 14 Q. Those are two of the criteria. 15 A. Yes. 16 Q. Are there other criteria for selecting the 17 geographic area? 18 A. Yeah. There are certainly a wide range of 19 criteria. One of the others that come to mind include 20 political jurisdictions, for instance, that is -- you 21 know, our states tend to be divided up into counties. We 22 also have municipalities. We have school districts and 23 sometimes special districts. And these different units 24 then have various kinds of responsibilities. 25 So another kind of a pragmatic but 0031 01 nonetheless relevant issue is basically certain kinds of 02 data are available only at certain jurisdictional levels. 03 For instance, some kinds of information are available at 04 the county level, not readily available for subcounty 05 areas. And so defining the study area then becomes -- 06 becomes one of the -- one of the important things that the 07 analyst or the team of analysts need to do. It's not -- 08 it's not a, you know, simple, easy, one-criteria, you 09 know, you look at the county where the thing is located, 10 but rather one needs to kind of balance a number of 11 considerations in trying to settle on the study area. 12 And, again, for some -- one may define a 13 study area for purposes of community impacts, but at the 14 same time some calculations might be made to show some 15 effects -- some of the economic effects or likely tax 16 revenue effects or whatever at the level of the state, for 17 instance. 18 Q. Does that mean you would have different areas? 19 Some would be larger and some smaller? One would be a 20 fiscal impact area? One would be a social impact area? 21 One would be a demographic impact area? 22 A. Certainly it might be very relevant to talk 23 about more than one geographical level of analysis, that 24 perhaps much of one's community level analysis, public 25 services, fiscal, demographic might focus on a relatively 0032 01 restricted area where most of the -- where most of the 02 project-related people might be expected to live, where 03 their kids might go to school and so on, but one might 04 also -- it might also appear relevant to do -- to look at 05 some perhaps broader economic, demographic, fiscal 06 dimensions for a larger area, perhaps even as large as the 07 state. That is providing estimates that we think that the 08 project will totally lead to this level of additional 09 employment, this level of additional income, this level of 10 additional tax revenues and so on for the state. 11 Q. Is it important to set this geographic area 12 early in your study, to set it late in your study? When 13 in your study is it set? 14 A. Normally defining the study area is something 15 that would be an issue quite early in the study. 16 Q. Sir, have you ever been a litigation expert in a 17 case? 18 A. Yes. 19 Q. Have you ever testified in court? 20 A. Yes. 21 Q. And what's the most recent case you testified 22 in? 23 A. The most recent case I testified in I guess was 24 -- must have been about 1988 or '89. It was a -- it had 25 to do -- it was a tax case in Federal court in Grand 0033 01 Forks, North Dakota. 02 Q. What was briefly the substance of that case? 03 You told me it was a tax case. 04 A. The substance, as best I can relate it -- okay. 05 During the late '70s and early 1980s, we had a series of 06 large power plant construction projects in West Central 07 North Dakota. Several large power plant facilities, 08 coal-burning power plants were built very much like some 09 of the lignite-fired facilities here in Texas. 10 The point at issue was that the gentleman 11 who was involved in the case then maintained a permanent 12 residence in Eastern North Dakota. His wife, family lived 13 there. He was employed pretty much continuously for a 14 number of years working on several of these power plant 15 construction projects out in the western part of the state 16 200 and some miles away. And so the issue then was 17 whether he could -- whether he could deduct his expenses 18 for living away from home, living out there in the coal 19 fields while he worked on those projects. 20 And basically then some of the -- some of 21 the points of issue were -- 22 Q. Let me ask you this: What was your role as a 23 witness in this case? 24 A. My role was to basically relate then the history 25 of the development of the several construction projects 0034 01 and including basically questions of was there a 02 reasonable expectation of how long these construction 03 projects would continue, of whether there was likely to be 04 subsequent projects after the initial one and so on. So 05 that was -- I was providing I guess you could say that 06 kind of background. 07 Q. Who were you employed by in that case? 08 A. I was testifying on behalf of the Department of 09 Justice. 10 Q. United States Department of Justice? 11 A. Uh-huh. 12 Q. Have you ever testified in any other case? 13 A. Other cases? There were I believe two -- there 14 were two related cases in this whole tax business, as I 15 recall. The first one was probably 1986 and the second 16 one in 1988. 17 Q. And your role in these cases was to be the 18 historical expert; am I correct? 19 A. In large measure, yes. 20 Q. Have you ever testified in a case other than 21 being an historical expert? 22 A. I don't recall. I don't think so. 23 Q. Okay. Other than the tax cases, have you ever 24 been deposed? 25 A. No. 0035 01 Q. Aside from those cases that went to court, have 02 you ever been hired as a consultant in cases that were 03 being litigated but didn't testify in court? 04 A. Well, let me see. I have worked with RPC on one 05 some years ago, the first-use tax case. Would that -- 06 Q. You have got to answer my questions. You can't 07 ask her. 08 A. Okay. Yes. About 10 years ago I was a 09 consultant for RPC. And this was a case called Louisiana 10 First-use Tax Case. It had to do with the State of 11 Louisiana imposing a tax on -- it was natural gas being 12 produced in the Outer Continental Shelf. This I don't 13 believe went to court. Certainly I was not involved in 14 testifying. 15 Q. What was your role as a consultant? 16 A. I was part of the RPC team that was basically 17 examining the impact of -- impact of OCS gas development 18 on Louisiana and Louisiana communities. 19 Q. What was your specific role? 20 A. I was involved in helping to assess then the 21 economic and fiscal impacts of OCS energy development on 22 the State of Louisiana. 23 Q. Does RPC stand for something or is it just 24 called RPC? 25 A. Research and Planning Consultants. 0036 01 Q. But everybody calls it RPC? 02 A. Uh-huh. 03 Q. And you have had an association with them for 04 how long, sir? 05 A. Since 1979. 06 MR. ROSENBERG: In the deposition -- after 07 we've been taking the deposition, somebody came in. He's 08 not identified on the record. I'm going to ask him to 09 identify himself so we know on the record who is here. 10 MS. STINSON: I'll identify him. It's Ron 11 Luke just sitting in. 12 QUESTIONS BY MR. ROSENBERG: 13 Q. Sir, to your understanding, what connection does 14 Ron Luke have with RPC? 15 A. Ron Luke is the president of RPC. 16 Q. Okay. And RPC is your present employer in this 17 case? 18 A. Yes. 19 Q. You are doing work for RPC now? 20 A. Right. 21 Q. Have you ever had a prior case that has involved 22 the same issues as are present in this case: SWIM plans, 23 water resources, matters such as that? 24 A. Not a legal case, no. 25 Q. Or as a consultant? Have you ever worked as a 0037 01 consultant on a case that has involved the same issues 02 that are present in this case? 03 MS. STINSON: I object to the form. I 04 request clarification. 05 When you say "case," do you mean a matter 06 in litigation or a research project or either? 07 MR. ROSENBERG: Let me see if I can 08 reconstruct it. 09 QUESTIONS BY MR. ROSENBERG: 10 Q. Have you ever worked on a matter, whether it's 11 been a case -- have you ever worked on a matter that's 12 been a case, a litigation case that's involved the same 13 issues as are present in this case? 14 A. I think I should answer yes, and then I would 15 say that, for instance, the Louisiana first-use tax case 16 involved some of the same kind of issues, that is 17 community impacts of particular kinds of development 18 activities or options and essentially distribution of the 19 costs and benefits and this sort of thing. And certainly 20 many of our other projects then have dealt with similar 21 kinds of issues, again attempting to assess economic, 22 demographic, and fiscal impacts of different kinds of 23 development or resource management activities or 24 alternatives. 25 Q. Have you ever worked on a case or a study in 0038 01 which the stimulus was a SWIM plan or the effect of water 02 resources? 03 A. Yes, several of our studies have involved water 04 resources in one way or another. 05 Q. You say "our studies". 06 A. Studies that I have worked on. 07 Q. What are they? 08 A. Okay. Starting maybe chronologically back about 09 20 years ago, I was part of a team that undertook a -- I 10 guess we could say a major study to examine the potential 11 effects of weather modification in North Dakota, that is 12 effects of added rainfall. 13 Okay. Subsequent work then involving 14 development of energy resources in the Northern Great 15 Plains. We had about a three-year project in the late 16 1970s, the title of which was I believe "Water as a 17 Parameter in the Development of Energy Resources in the 18 Northern Great Plains." 19 I think it would have been just slightly 20 subsequent to that study I worked on a project with the 21 Harza engineering firm out of Chicago which was basically 22 looking then at the issue of water resource demands 23 related to development of energy resources in the 24 multistate area of the Dakotas, Montana and Wyoming. 25 So those would be -- those would be some 0039 01 specific studies that I can point to. 02 Q. What do those studies have in common with the 03 study regarding the EAA, as you understand it? 04 A. Okay. What I guess -- what they generally have 05 in common with the study of the EAA then is basically the 06 issue -- important issues include the issues of both sort 07 of direct farm level effects and also community level 08 impacts of alternative natural resource, in this case 09 water resource management options. And so that while the 10 setting is different, many of the same tools, techniques 11 and so on are relevant whether one is looking at the 12 community impacts of water management in Florida or 13 community impacts of water resource development in the 14 Northern Great Plains. The same kind of issues and the 15 same kind of tools become -- tools as in input/output 16 models, demographic projection techniques, fiscal analysis 17 and the like. 18 Q. Now, in these water studies or any of your 19 studies, whether in cases or academic studies, have you 20 ever used or have they ever involved the FLIPSIM model? 21 A. F-L-I-P-S-I-M. That's an acronym, FLIPSIM. 22 Q. Have any of these studies or cases ever -- 23 A. No. 24 Q. Sir, you are the author of -- I should say: 25 What is your relationship with this book, "Impact of 0040 01 Growth"? 02 A. "Impact of Growth." Yes. I was one of the 03 three authors of the book that you are holding there. 04 And, essentially, I was responsible for one chapter there 05 which I can identify for you. 06 MR. ROSENBERG: Off the record. 07 (At this time there was a brief discussion 08 off the record.) 09 QUESTIONS BY MR. ROSENBERG: 10 Q. Do you know, without me showing you the book, 11 what chapter you wrote on? 12 A. It was basically a chapter on impact models. 13 Q. Chapter 2 is entitled "Selection of Economic/ 14 Demographic Models." 15 A. Yes. 16 Q. Chapter 3 is entitled "Public Service Impacts." 17 Chapter 4 is entitled "Social Impacts." Chapter 5 is 18 "Fiscal Impacts." 19 A. Selection of the models was the chapter that I 20 was involved in. 21 Q. 2? 22 A. Uh-huh. 23 Q. Would you consider this book authoritative on 24 the other chapters also? 25 A. I would think so, yes. 0041 01 (An instrument was here marked as 02 Deposition Exhibit No. 3 for identification.) 03 QUESTIONS BY MR. ROSENBERG: 04 Q. Sir, I'm showing you Exhibit 3. And that is a 05 memorandum to you. Am I correct? 06 A. Yes. 07 Q. Are you familiar with that? 08 A. To me from Ron. 09 Q. Let me ask you a couple of questions, please. 10 A. Yes. 11 Q. What is a SEARS? 12 A. Okay. The SEARS model -- don't you love these 13 acronyms -- is a socioeconomic impact assessment model 14 which was developed basically by myself and -- well, 15 primary developers were myself and Dr. Steve Murdock at 16 Texas A&M University. The acronym stands for 17 Socioeconomic Assessment of Repository Siting because the 18 major impetus for developing the SEARS model was a 19 long-term contract that we had at that time with the U.S. 20 Department of Energy relative to their attempts to site a 21 geological repository for high-level radioactive wastes. 22 Okay. The SEARS model in, you know, different variations 23 has been used by myself and others at North Dakota State 24 University, by Dr. Murdock and his group at Texas A&M 25 University. It has also been used by RPC on several 0042 01 studies. 02 Q. Is it being used in the present matter? 03 A. Not the SEARS model per se. The SEARS model, 04 however, basically -- we would be using similar types of 05 techniques, input/output models, demographic forecasting 06 methods in the present matter, not the SEARS model per se. 07 Q. So what model are you using in this case in 08 place of SEARS? 09 A. Okay. What we are using for the economic -- for 10 the economic assessment is the RIMS input/output model 11 developed by the U.S. Department of Commerce. And then 12 for our demographic work we rely heavily on demographic 13 forecasting models that have been developed at the Bureau 14 of Economic and Business Research at the University of 15 Florida. We're also then -- we will be doing public 16 service and fiscal analysis using -- well, not -- I'm 17 trying to think of the best way to say this. Not using a 18 formally identified named model, but, in fact, using what 19 we regard as sort of standard procedures for that type of 20 assessment. 21 Q. Okay. In the assessment you are making now in 22 this case -- excuse me. Let me withdraw that and give you 23 this question. 24 When you run the SEARS model, how do you 25 get direct impacts into the SEARS model? Where do you get 0043 01 the direct impacts from? 02 A. Okay. One way of answering that is to say that 03 clearly -- with the SEARS model or with any similar model 04 that I'm aware of, it's -- it is imperative to have some 05 detailed information about the project, the proposed 06 action, as it were, which generally is obtained from the 07 proponent. 08 What kind of information are we talking 09 about? 10 Employment, how many people are employed in 11 different phases of the project and perhaps what's the 12 duration of employment, short-term construction people 13 versus more permanent employees, sometimes information 14 about skill levels and so on, especially as it might 15 relate to whether the jobs can be filled out of a local 16 labor pool or whether a large portion of the work force 17 have to be inmigrants. 18 Another important dimension is the 19 expenditures that are going to be generated by the 20 project, what kind of purchases of goods and services, 21 supplies and materials and so on. 22 Q. Let me back up for a second here. 23 In what you are doing in this case, where 24 did you get the direct impacts? 25 A. Okay. At this point -- at this point that 0044 01 analysis is still going on. But essentially we'll -- the 02 process will be that based on the SWIM plan and different 03 alternative scenarios that might be developed consistent 04 with the SWIM plan we would then, relative to best 05 management practices, known as BMPs, relative to number, 06 size and location of stormwater treatment areas, known as 07 STAs, and some of these other things, then the first step 08 in the analysis would be a -- what we might call a 09 farm level analysis using -- presumably using the FLIPSIM 10 model. 11 Q. That's what I'm getting it. When you say this 12 analysis is going on, are you now using a FLIPSIM model to 13 construct the direct, indirect and induced impacts? 14 A. Not as yet. And there has been -- there has 15 been some uncertainty about I guess the relative roles of 16 some of the different parties here relative to the 17 farm level analysis, FLIPSIM and the like. 18 Q. I don't know what that means. What are you 19 getting at? 20 A. Okay. I or the RPC team has not as yet been 21 doing analysis with the FLIPSIM model. It may develop 22 that we will be -- that we will be responsible for doing 23 some of this analysis. That's -- I guess up to this point 24 it has not been clear what our responsibility might be 25 relative to doing the analysis of that level. But the -- 0045 01 but if I might say then, the FLIPSIM analysis is one step. 02 And then subsequent to the FLIPSIM analysis, regardless of 03 whether we are responsible for doing it or whether someone 04 else -- whether we obtain FLIPSIM results from another 05 entity, then the analysis goes on downstream with economic 06 impacts and the like. 07 Q. Well, what's the problem? I'm not sure I follow 08 you. You say you are not doing the analysis or you are 09 going to or you are getting information from another 10 entity. I'm not sure I'm completely following you here. 11 A. Okay. 12 MS. STINSON: May I confer with my client? 13 MR. ROSENBERG: Let's go off the record. 14 (At this time there was a brief discussion 15 off the record.) 16 THE WITNESS: Okay. The question was: 17 What about FLIPSIM? 18 And the answer is yes. We intend to use 19 the FLIPSIM model for the farm level -- assessment of the 20 farm level impacts which then become input to subsequent 21 steps of the process. We have obtained a copy of the 22 FLIPSIM model and so on. 23 QUESTIONS BY MR. ROSENBERG: 24 Q. When was that done? When did you get a copy of 25 the FLIPSIM model? 0046 01 A. Okay. We, in this case being RPC -- I cannot 02 say with -- it seems to me that it's been -- it's been 03 perhaps a month or more ago. I cannot say for certain 04 exactly when -- 05 Q. Last six weeks or so? 06 A. I can't say for sure. I think it might have 07 even been a bit longer ago than that. 08 Q. Earlier in questioning here I asked you to go 09 through levels of impacts. I asked you if these were 10 sequential. 11 Do you recall that? 12 A. Uh-huh. 13 Q. And I want you to help me out because I'm not 14 sure I understand. 15 You were talking about fiscal impacts or 16 social impacts or public impacts. 17 Now, in order to get to that, you have to 18 get to direct impacts. Am I right? 19 A. Yes. 20 Q. Where did you get the information for direct 21 impacts if you haven't been using the FLIPSIM model? 22 A. In our earlier work, we had essentially taken 23 the FLIPSIM derived results from the Hazen and Sawyer 24 report. And basically then we were using those as the 25 basis for opinions about economic, demographic, public 0047 01 service effects. So we were basically in the earlier work 02 using the Hazen and Sawyer results as a starting point. 03 Q. You say "in the earlier work". That's in 04 comparison to what? Is there later work? 05 A. Okay. The work that RPC had been asked to do 06 and which I have been asked to help in was in -- well, the 07 first two phases were -- one back in August, we reviewed 08 the two Hazen and Sawyer documents and prepared an 09 analysis of those two documents. 10 Then during the period September, October, 11 we prepared basically some opinions relative to community 12 impacts. And it was in preparing those opinions for the 13 date of August -- October 26th sticks in my mind as a date 14 when certain opinions needed to be delivered. We were 15 basically using the Hazen and Sawyer report and the 16 FLIPSIM results and so on from that report as our starting 17 point in a sense. 18 Okay. It has -- subsequent to that work 19 then, it has seemed to us that perhaps we would need -- 20 more analysis would be needed, including analysis of 21 additional scenarios, analysis over a longer time frame 22 and so on which would involve then the need to do analysis 23 with the FLIPSIM model itself. 24 Q. So you are going to go back to the point of 25 beginning and reconstruct the whole project? Is that what 0048 01 I hear? 02 A. Not per se, but it seems to us that probably 03 there will be a need to use the FLIPSIM model to analyze 04 some alternative scenarios, perhaps both alternative 05 without-project scenarios and also then project 06 scenarios. So it will require some analysis or better 07 definition of direct impacts followed then by the analysis 08 of secondary impacts -- economic, demographic and the 09 like. 10 Q. Let me ask you this: The memo in front of you 11 is August 1992. 12 A. Uh-huh. 13 Q. We're already in February of '93. Is that memo 14 correct that -- it says that "There seems to be general 15 agreement that FLIPSIM should be used for the farm level 16 analysis." 17 Is that your understanding? 18 A. The question, as I understand it, is: Is there 19 agreement that FLIPSIM is an appropriate tool to use for 20 the farm level analysis? 21 Yes. That's -- I would agree with that. 22 Q. Okay. When did you first know that? Did you 23 know that in August of 1992? 24 A. The question, as I understand it, is at what 25 point did we determine that we believed FLIPSIM was an 0049 01 appropriate tool to use for farm level analysis. 02 Yeah, I would say that's -- August of '92 03 would be an appropriate date to identify -- as identifying 04 when we thought FLIPSIM would be an appropriate tool. 05 Q. Why didn't you get it in August of '92? 06 A. Perhaps one -- at least one way to answer that 07 question would be that at that point in August I think 08 about all we had been requested to do or at least all I 09 had been requested to do was to basically review the two 10 draft documents from Hazen and Sawyer. So it had not at 11 that point been determined whether we would be -- would be 12 asked to do any further analysis besides just reviewing 13 the documents. 14 Q. When did you think you would need FLIPSIM for 15 further analysis? 16 A. Again, I would -- in terms of identifying a 17 date, I would say perhaps November, based on -- again, our 18 work has been conducted in a series of phases. And so 19 during September, October we were basically -- basically 20 then engaged in developing -- developing opinions about 21 community impacts. So I guess it was after that. At 22 around about the latter stages of that work would have 23 been when we probably identified the need for additional 24 -- the fact that additional FLIPSIM-type analysis would be 25 desirable. 0050 01 Q. Okay. Why didn't you then obtain a copy of 02 FLIPSIM in November? 03 A. One response to that question would be that 04 basically -- with the way that the work of the RPC team 05 has been structured, basically Dr. Luke has been the 06 person responsible for obtaining copies of models and that 07 sort of thing. So one way of responding to the question 08 is I personally was not kind of directly involved in 09 discussions relative to obtain a copy of FLIPSIM. 10 Q. Even though you weren't directly involved, do 11 you know why FLIPSIM didn't come in November or it wasn't 12 obtained in November and only came -- was only obtained 13 recently? 14 A. I can't -- I don't -- I'm not sure that I feel 15 comfortable with commenting on exactly when FLIPSIM was 16 obtained. I simply don't know exactly when RPC did obtain 17 a copy of FLIPSIM. 18 Q. I'm not asking for a specific date. I'm asking 19 why there was a delay in obtaining FLIPSIM and what the 20 problem was. 21 A. Okay. 22 MS. STINSON: I object to the form. 23 You can answer if you can. 24 QUESTIONS BY MR. ROSENBERG: 25 Q. The question is: What was the delay in 0051 01 obtaining FLIPSIM? 02 A. To the best of my understanding, one delay was 03 occasioned because basically when a copy of FLIPSIM was 04 requested from Texas A&M University, I believe that the 05 response was negative, as I understood it. And I'm not -- 06 I'm not totally -- I'm not totally informed about the 07 different discussions that occurred between that -- 08 between that point and ultimately obtaining a copy. Dr. 09 Luke I think could probably address some of that much more 10 effectively in his deposition. 11 (At this time a brief recess was taken, 12 during which time an instrument was here marked as 13 Deposition Exhibit No. 4 for identification.) 14 QUESTIONS BY MR. ROSENBERG: 15 Q. I hand you a copy of Exhibit 4. Tell me what 16 that is. 17 A. Okay. These -- Exhibit 4 is a letter from 18 myself to Dr. Ron Luke dated October 13. And it says, 19 "Enclosed are the Table of Contents for two edited books 20 dealing with economic adjustment, closure, dislocation, et 21 cetera." 22 These were two documents that I had 23 identified as being possibly useful resource materials for 24 our project because, as I indicated, they did deal with 25 economic -- well, basically impacts of economic decline, 0052 01 closure of facilities and those kinds of topics. 02 Q. Now, one of those attachments is "Economic 03 Adjustment and Conversion of Defense Industries"? 04 A. Yes. 05 Q. Am I correct? 06 A. Uh-huh. 07 Q. Okay. Can you tell me whether the Department of 08 Defense uses economic impact analysis in its decisions to 09 close a base or facility? 10 A. Okay. The answer is yes, that the Department of 11 Defense, in the process of decision-making relative to 12 base closings, does routinely undertake studies of 13 economic, fiscal and other related impacts of such a 14 closure decision. And what I would -- what I'm less clear 15 on is exactly what role economic impacts play relative to 16 other considerations in the decision process. But 17 economic and fiscal impact studies are undertaken 18 routinely by the defense department. They have an office 19 which used to be and maybe still is called the Office of 20 Economic Adjustment within DOD which is involved in those 21 kind of activities. 22 Q. Do they conduct the economic impact analysis 23 before or after they decide to close the base? 24 A. That is a point on which I am less clear as to 25 just the timing of the studies relative to the decisions 0053 01 and announcements of those decisions and so on. 02 Q. And what effect, if any, does the economic 03 impact analysis have on closing a base? 04 A. Okay. That is -- that is a question that I 05 don't really feel well-prepared to answer. Again, we know 06 that -- we know that those kinds of studies are done. But 07 what the role of economic and other impacts is in closure 08 decisions as opposed to -- as opposed to community 09 adjustment, once a closure decision has been made, I don't 10 -- I don't really know the answer to that. 11 (An instrument was here marked as 12 Deposition Exhibit No. 5 for identification.) 13 QUESTIONS BY MR. ROSENBERG: 14 Q. Let me give you a copy of proposed Government 15 Exhibit 5. Can you tell me what it is? 16 A. Yes. Exhibit 5 is a copy of a research report 17 published in 1989 titled "Facing Economic Adversity: 18 Experiences of Displaced Farm Families in North Dakota." 19 And this report then summarizes findings from a statewide 20 survey of farm families who had left farming during the 21 mid 1980s. And this was a study I believe of -- it was 22 well over 100 farm families that we contacted. And we 23 were basically asking them questions about the whole 24 process of leaving farming, had they relocated, what were 25 they doing now and these kinds of questions. 0054 01 Q. Professor Leistritz, let me back up. You again 02 said "we". 03 A. Okay. There are four names on the report. I 04 was the project director, project leader. Three other 05 people worked closely with me in doing a lot of the work. 06 I also list them on the report. 07 Q. Did you conduct the study? 08 A. Yes. 09 Q. You were intimately involved with the study, its 10 purposes, its direction? 11 A. Yes. 12 Q. From what you know in that study, can you relate 13 to me the similarities and differences between the farmers 14 in the EAA and those in the study group? 15 A. Okay. Yeah, probably more -- a lot of 16 differences probably because most of the people that we 17 had contacted here -- okay. These were folks who were 18 independent farm operators operating what, by Florida 19 standards, would be relatively small farms, relatively 20 little hired labor and so on. And these people then also 21 -- perhaps a salient characteristic, compared to what we 22 understand about many of the farm workers in Florida, 23 these people were relatively well-educated. Almost all of 24 the operators and their spouses were high school 25 graduates. 0055 01 Q. "These people" being the people in the study 02 group? 03 A. The people in our North Dakota study group. 04 Q. Okay. 05 A. And a good many -- I would say close to half had 06 some sort of post-secondary education. Perhaps as a result 07 of this we found then that their experience in finding 08 alternative employment had been relatively favorable. 09 Very few were unemployed at the time of the study and most 10 of them reported a relatively short job search to find 11 alternative employment. These were some of the findings. 12 Q. Are there any other similarities or differences 13 between the farmers in the EAA and those in your study 14 group? 15 MS. STINSON: Object to form. 16 QUESTIONS BY MR. ROSENBERG: 17 Q. Do you know of any other similarities or 18 differences between the study group farmers and the 19 farmers of EAA? 20 MS. STINSON: Object to form still, but you 21 can answer. 22 THE WITNESS: Well, I would say probably 23 substantial differences. One, again, based on 24 considerable differences in the type of agriculture that 25 these farm and ranch operators that we had studied in 0056 01 North Dakota tend to be then what we would term family 02 farmers. They are operating as, in a sense, independent 03 entrepreneurs using a combination of owned and rented 04 land, again relatively little hired labor as such. So 05 there was not in this area a large sort of agricultural 06 worker population. There was not a substantial seasonal 07 worker population. So those would be just some 08 differences that kind of come to mind. 09 QUESTIONS BY MR. ROSENBERG: 10 Q. Have you ever been to the EAA? 11 A. Yes. 12 Q. When? 13 A. Early September 1992. 14 Q. How long were you there? 15 A. Just one day. 16 Q. And what time did you arrive and what time did 17 you leave? 18 A. We must have arrived like at 9:00 o'clock in the 19 morning and left probably about 4:00 o'clock in the 20 afternoon. 21 Q. And where did you go? 22 A. Okay. We went basically to the co-op sugar 23 plant near Belle Glade. 24 Q. And did you spend all of your time in the sugar 25 plant? 0057 01 A. Spent essentially all of our time in the sugar 02 plant and going to and fro. 03 Q. Is that out to lunch and back? Does to and fro 04 mean out to lunch and back? 05 A. Well, from West Palm Beach to the plant and 06 returning and so on. 07 Q. And who did you meet with at that meeting? 08 A. Okay. There was a room full of people, but 09 basically most of them were officials of the sugar co-op. 10 Q. Did you take notes in that meeting? 11 A. Not probably very well-organized ones. 12 Q. What was the purpose of the meeting? 13 A. The purpose of the meeting really was to talk 14 about what the RPC group might do relative to analyzing 15 community impacts and related issues relative to the SWIM 16 plan. 17 Q. In your trip to the EAA -- that's your only trip 18 to the EAA, right? 19 A. Uh-huh. 20 Q. Did you do anything to fly over the EAA, walk 21 through the EAA? 22 A. No. 23 Q. Drive through the EAA? 24 A. We drove -- we drove basically from West Palm 25 Beach to the plant, but we did not try to -- we did not 0058 01 try to do sort of a circuit of the area or whatever. 02 Q. You drove from the airport to the plant, went to 03 lunch, back to the plant and back to the airport? 04 A. That's essentially correct, yes. 05 Q. And have the only farmers you have met in the 06 EAA been those farmers you met at that meeting? 07 A. Yes. 08 Q. Can you tell me whether in your view the 09 structure of the EAA, the farming structure of the EAA is 10 different than the farming structure of the study group in 11 North Dakota? 12 A. Substantially, yes. 13 Q. What is the difference? 14 A. Basically that within EAA there are a number of 15 very, very large corporate farming entities which do not 16 really have counterparts in our part of the country. That 17 would be probably the single most important difference. 18 A second difference, which again relates to 19 the type of crops and so on, would be the extensive use of 20 seasonal hired labor by many of the farms in the EAA which 21 again has very little counterpart in our type of 22 agriculture I guess. 23 Q. Would it be fair to say that the EAA farming is 24 substantially agribusiness-type farming? 25 A. I would not -- I would agree with that 0059 01 assessment. 02 Q. Now, in your North Dakota study, does it show 03 that any farmers went bankrupt? 04 A. Yes. These -- the people involved in our study 05 had basically left farming because of financial 06 adversity. A certain segment of those had gone through 07 bankruptcy. As I recall, it would have been less than 20 08 percent that had actually gone through bankruptcy. But 09 they had essentially liquidated most or all of their 10 assets as they left farming. 11 Q. Okay. What happened to the land that they 12 farmed on after they went into bankruptcy? 13 A. Okay. I suspect -- I think the question you are 14 trying to ask is was the land -- did the land continue to 15 be farmed or did it stand idle. 16 Q. Was the land still in production after that? 17 A. Yes. With -- almost without exception, the land 18 stayed in production. 19 Q. It was taken over by somebody else? 20 A. Yes, uh-huh. 21 Q. The next farmer? 22 A. Right. 23 Q. Somebody else took over the land and the land 24 stayed in production? 25 A. Uh-huh. 0060 01 Q. The farmer who had previously farmed the land, 02 he went into bankruptcy or he left the land or went into 03 the city, and the land continued to produce? 04 A. Yes. 05 Q. Am I correct? 06 A. That has been the pattern not only in our state 07 but apparently throughout the Upper Midwest during what's 08 often termed the farm crisis of the 1980s, exactly. 09 Q. In North Dakota in your study of those farmers 10 that went bankruptcy, left the land, the land stayed in 11 production, is that land still producing the same amount 12 and mix of crops that it was when the previous farmer was 13 farming it, the now bankrupt farmer? 14 A. The general answer -- general answer is -- we 15 think the answer is yes. There probably has not been a 16 major change in mix of crops and so on. One thing that 17 has occurred in that part of the country -- one thing that 18 occurred in that part of the country during the same time 19 period was a government land retirement program called 20 Conservation Reserve Program. And something -- in some 21 counties, more than 10 percent of the cropland has been 22 enrolled into this Conservation Reserve Program. 23 Q. Is that what I would call a soil bank or is that 24 what you would call -- or 20 years ago we called a soil 25 bank? 0061 01 A. Exactly, like a 10-year contract to take the 02 crop out of crop production. 03 Q. That would be the least productive land somebody 04 has? 05 A. Uh-huh. 06 Q. But if land would be productive or more than 07 margin productive, it would stay in production. If it was 08 less than margin productive, it would be put in a soil 09 bank. Am I right? 10 A. Right. Essentially the question -- the question 11 did farm bankruptcies lead to substantial acreages 12 standing idle for substantial periods of time, the answer 13 would be no. 14 Q. And would you say that is a general rule of 15 farming that even though a farmer went bankrupt if the 16 land is productive it would be taken over by somebody else 17 and they would produce in that way? 18 A. If -- if the -- to respond to your question, if 19 the -- what we might say the fundamental economics of 20 producing the particular crop are still favorable, which 21 is to say then that the producer can expect -- can 22 reasonably expect to cover their variable costs of 23 production which in a longer term planning horizon would 24 include capital replacement, machinery and the like, then 25 one could expect that the land would stay in production, 0062 01 albeit being operated by someone else. 02 Certainly, by the same token, when the 03 costs and returns from producing a particular type of crop 04 become unfavorable, that is producers can no longer 05 anticipate covering their costs, this would suggest a need 06 to either change crops or in -- in some cases certainly we 07 have substantial history in the United States of land 08 going out of crop production, whether it be returning to 09 grassland in some parts of the Great Plains or whether it 10 be returning to forests in some of the -- for instance, 11 Northern Minnesota, which I'm kind of familiar with 12 because it's very close to where we live, there are 13 substantial acreages that at one time were farmed and they 14 have basically gone back to trees. And in many cases the 15 land is owned by the county based on the previous owner 16 didn't pay his taxes. 17 So one I think needs to distinguish between 18 the situation of the economics producing a crop being 19 unfavorable versus the situation of a particular operator 20 finding themselves with an untenable debt load and that 21 sort of thing. 22 Q. When new farmers take over the land of the 23 bankrupt farmer, are they more efficient? Or what is it 24 that makes their farm or farming practices successful as 25 opposed to these bankrupt farmers? 0063 01 A. Okay. Reflecting on what we've seen in the 02 Upper Midwest, it -- in the farm surveys we've done, the 03 major factor that -- the major factor that was associated 04 with success or lack thereof during the 1980s was the -- 05 basically the operator's debt load at the beginning of the 06 period. So that many of the -- apparently many of the 07 operators who took over land that was relinquished by 08 someone who was going out of farming -- often the person 09 who took that over was able to -- was able to farm the 10 land without major additional investments in machinery, 11 without incurring substantial additional debt and that 12 sort of thing. 13 In our work, we were not able to identify 14 any major differences in production efficiency, management 15 efficiency or, for that matter, in the general types of 16 crops raised and that sort of thing. 17 Another thing, of course, that might be a 18 factor for the individual who is taking over the land 19 might be the -- well, for want of a better term, the cost 20 basis that they might have in the property, that is land 21 -- it was not uncommon in the Upper Midwest during sort of 22 the depths of the farm crisis for land to be selling at 23 little more than half of what it had sold for a few years 24 before. 25 Likewise -- likewise, farm -- used farm 0064 01 machinery that was sold when farms were liquidated was 02 probably being sold at only a fraction of its new cost 03 which might have been only a relatively few years before. 04 So that would -- that would have some influence on the new 05 operator's -- well, for want of a better term, their cost 06 basis in the operation. 07 Q. If we could relate this to the EAA or focus on 08 the EAA. If a farmer in EAA would go bankrupt because he 09 was overextended like many of the farmers in North Dakota 10 -- say he's an independent grower. To your understanding, 11 who would be likely to take his land over? 12 A. I think that's a topic that -- I don't -- at 13 this point I guess I feel -- I don't feel I know the 14 answer to that question. That's one of the areas we need 15 to explore. 16 Q. Let me back up. Would you expect that that 17 farmer's land would be taken over by another farmer? 18 A. Really, there are -- it seems to me there are 19 two logical possibilities. One is that -- one is that the 20 land would be taken over by another farmer, another 21 farming operation, whether it be an independent grower or 22 one of the larger entities. That would be one possibility 23 with the land remaining in production. 24 The other possibility would be that if, in 25 fact, the combination of circumstances were such that the 0065 01 crop -- in this case sugar cane -- is no longer profitable 02 on that land, then the possibilities are either an 03 alternative crop which might have different input 04 requirements, labor requirements and so on or, in the 05 extreme, another possibility is for the land to go out of 06 production. 07 Q. In the case I have just given you, if the farmer 08 who owned the land went out of farming because he 09 overextended himself, would you expect his land to be 10 taken over by another farmer? 11 A. Okay. That would -- okay. If we're assuming 12 then that there has not been a major change in the cost of 13 return situation for the crop, that we're merely in a 14 situation where an isolated -- an isolated situation where 15 a grower has overextended himself and cannot -- cannot 16 service his debt or whatever, then it would seemingly be 17 logical that the land might then be operated by another 18 farmer. That would be -- that would be a logical 19 consequence. 20 Q. Okay. Now, in your study, in your experience, 21 would you expect that that next farmer, the farmer taking 22 over, would be a larger farmer because it would be easier 23 for him to make it financially? 24 A. That would seem to be consistent with the 25 experience certainly through much of agriculture over the 0066 01 last decade or so. 02 Q. Is it consistent with your understanding of what 03 has been happening in the EAA? 04 A. Yeah. That would also seem -- with a trend 05 towards somewhat fewer and larger operations, I would say 06 so, yes. 07 Q. Now, if the farmer went bankrupt and left 08 farming, would you employ a multiplier against his loss of 09 production and include it as an economic impact? 10 A. That would depend -- that would depend on what 11 the analysis would suggest about whether the land remains 12 in production or goes out of production. 13 Q. If the land would remain in production, then 14 what would you do? 15 A. Okay. Then we might -- in the situation where 16 -- then we would want to look at the organization -- 17 basically the production organization before and after the 18 change, that is is the land being taken over by a larger 19 farming operation. And then the major part of the 20 analysis, as I would see it, would be looking then at the 21 expenditure pattern of the larger farming operation versus 22 the smaller one both in terms of how the expenditures are 23 distributed by sector where -- a sector is one of the 24 economist's terms for a group of similar economic units, 25 the household sector, retail sector. Okay. Another 0067 01 consideration being whether there seemed likely to be a 02 difference in the geographical expenditure pattern of the 03 hypothesized smaller independent producer versus the large 04 agribusiness unit that might be taking over the land, that 05 is do these larger units tend to bypass local suppliers 06 and so on. So those would be some of the considerations, 07 some of the factors to be addressed in the analysis. 08 Q. Would you expect if in the EAA a larger 09 agribusiness-type farmer took over one of these farms, an 10 overextended farmer, that the economic impact of that 11 might well be positive for the EAA? 12 A. I guess I would say that that's -- that might be 13 termed an emperical question. That's the sort of thing 14 that we would hope to determine in the course of analysis: 15 What would be the net -- what would be the net effect if, 16 in fact, one of the results of some of these scenarios is 17 increasing concentration of production into fewer and 18 larger units? 19 I would also say that in terms of the 20 literature on this topic, there perhaps is less than a 21 clear consensus about the impacts of the change in farming 22 structure towards fewer and larger units. 23 Q. Have you studied that in the present case? 24 A. That's one of the topics we'll very likely be 25 addressing. We have not -- we have not -- we have only 0068 01 begun analysis in that direction. 02 Q. Okay. You tell me again we. Who is the "we"? 03 Is that you yourself or is it somebody else? 04 A. Myself and the RPC team. 05 Q. But that is something you will be looking into? 06 A. Sure. 07 Q. But you haven't yet? 08 A. Right. 09 (An instrument was here marked as 10 Deposition Exhibit No. 6 for identification.) 11 QUESTIONS BY MR. ROSENBERG: 12 Q. Can you identify that for me, please? 13 A. Yes. Exhibit 6, an article authored by myself 14 and one, two, three, four, five others, including Dr. 15 Steve Murdock at Texas A&M University. This is one of the 16 products of a multiyear study that we undertook back in 17 the mid 1980s basically examining community impacts of the 18 farm crisis, displacement of farmers and the like. 19 Q. Can I have you turn to page 128? That's Table 20 2. 21 A. 128, Table 2. Yes. 22 Q. Can you tell me what that table stands for, what 23 principles come from this table, if any? 24 A. Okay. Yeah. The table that we're addressing 25 summarizes results from two different surveys. We did -- 0069 01 we did a survey of a cross-section of producers in North 02 Dakota and in Texas who were at the time of the survey 03 currently operating farms. And so then these individuals 04 represented a broad cross-section in terms of age, 05 experience, size of farm and, among other things, their 06 financial structure, their debt load and so on. 07 Q. The title is "Adjustments Made in the Farm 08 Operation of Former Farmers and Current Farmers 09 Experiencing Varying Levels of Financial Stress (Percent 10 Making Adjustment);" am I right? 11 A. Yeah, uh-huh. 12 Q. Now, tell me what is happening, what this table 13 shows. 14 A. Okay. In general terms, what we were finding 15 here was that those operators who had relatively high debt 16 loads were more likely to be reporting that they had made 17 a number of different kinds of adjustments in their 18 farming operation such as postponed capital purchases. 19 For those producers with no debt, only about -- well, 20 about half of those who had no debt said that they had 21 postponed capital purchases during the -- I believe it was 22 like a -- the past two years sticks in my mind as the 23 relevant time period whereas 89 percent of those who had a 24 debt-to-asset ratio of 70 percent or more reported 25 postponing capital purchases. 0070 01 Okay. Another example, renegotiated loans 02 to reduce principal, only five percent of those who 03 currently reported no debt, but 52 percent of those in the 04 highest debt category. 05 So essentially the overall finding was that 06 -- perhaps not a very surprising one -- was that those who 07 were relatively highly leveraged were more likely to have 08 engaged in quite a variety of farm adjustments that were 09 aimed at either changing their financial structure or 10 reducing their risk. 11 For instance, began using crop insurance, 12 46 percent of those in the highest debt category versus 13 only 16 percent of those with no debt. 14 Q. Okay. Now, tell me if I have it right. Could 15 the table stand for this principle: Farmers will make 16 adjustments when faced with financial crises? Is that 17 what is happening? 18 A. That would be a conclusion that would not be 19 inconsistent with what we were reporting in the table, 20 yes. 21 Q. And what you have done in the table is list a 22 number of the adjustments that farmers, in fact, do make? 23 A. Uh-huh. 24 Q. Am I right? 25 A. Uh-huh. 0071 01 Q. Okay. Now, would you expect that to be a common 02 principle throughout farming that farmers that are faced 03 with crises will make adjustments, and these are common 04 adjustments to make? 05 A. Yeah. I would agree with that statement. 06 Farmers -- perhaps farmers will attempt certainly to make 07 adjustments. Clearly from that -- the group in this table 08 labeled former producers then, former farmers suggest that 09 in some cases, despite -- despite whatever efforts at 10 adjustment, there were a group of our producers who were 11 unable to stay on the farm. 12 Q. Would increased debt be one of those matters 13 that would cause, in your terms, financial stress? 14 A. Increased debt. 15 Q. Or high debt? 16 A. Right. The -- yes. And I might say in our -- 17 in our article here and elsewhere, we had generally 18 defined financial stress as including difficulty in 19 meeting debt service obligations, that is difficulty in 20 making principal and interest payments. So, yes, 21 generally those with higher debt loads were more likely to 22 experience financial stress so we find. 23 Q. Well, under your definition then, anybody who 24 has a debt load of any sort could be facing stress in 25 meeting that debt. The higher it is, perhaps the greater 0072 01 the stress, but even if it's lower there would still be 02 some stress. Am I correct in that? 03 A. I guess what we were -- okay. Maybe I didn't -- 04 maybe I didn't make myself sufficiently clear in what I 05 said before. We were defining financial stress 06 essentially as inability to meet debt service requirements 07 and so on. But, in any event then, the response would be 08 that generally the finding has been those with -- those 09 with higher -- those with high debt loads were most likely 10 to experience financial stress. 11 Q. You used the term "inability". Can I substitute 12 the term "difficulty"? 13 A. Okay. 14 Q. Would that be fair? 15 A. It's probably not unreasonable, yeah. 16 Q. Okay. Are you familiar with the 17 Polopolous/Richardson model along these lines or the 18 points they looked at in terms of whether the Hazen and 19 Sawyer work was sufficient? 20 A. I have seen brief summaries of the Polopolous 21 and Richardson work only. 22 Q. Okay. One of the items that Polopolous and 23 Richardson criticize Hazen and Sawyer for -- tell me if 24 I am correct -- is debt. 25 A. Okay. 0073 01 Q. Or the absence of debt in her model. Am I 02 right? 03 A. Uh-huh. 04 Q. Now, in your Table 2 here you talk about 05 adjustments, that farmers who have difficulties will make 06 adjustments in order to service debt. 07 A. Uh-huh. 08 Q. Did you see anything in any of the Polopolous/ 09 Richardson model or criticism to talk about adjustments 10 that farmers could make to meet debt servicing? 11 A. The answer is no. But, again, I would point out 12 that I have seen only brief summaries of the Polopolous 13 and Richardson work, essentially copies of -- primarily 14 copies of view graphs and the like. 15 Q. Copies of? 16 A. View graphs, transparencies from presentations 17 that were made. 18 Q. Let me ask you this: What is the relevance 19 within the context of the EAA which is largely 20 agribusinesses as you have just told me -- what are the 21 consequences of the shift of debt load where the -- let me 22 withdraw the question. It's not properly constructed 23 here. 24 Does it matter in your view whether the 25 farmers who are in this debt situation or agribusiness or 0074 01 mom and pop or smaller farmers -- let me ask the question 02 a different way. 03 Wouldn't agribusiness be better equipped to 04 meet financial stress points as opposed to a smaller or 05 mom and pop farmer? 06 A. Well, the question -- 07 Q. Would they have more options open to them, a 08 longer time period to make adjustments? 09 MS. STINSON: Object to form. 10 THE WITNESS: I guess my response would be 11 that -- well, certainly the question is calling for an 12 opinion. It seems to me one might need to know more about 13 the specifics of the organization of either the -- you 14 know, the large agribusiness unit or the independent 15 proprietor farm situation. And one can -- one can point, 16 for instance, to an agribusiness firm as potentially 17 having greater total resources and perhaps having some 18 additional options. Thereby one can also point to how the 19 flexibility of the traditional family farm in American 20 agriculture where the operator and family provide much of 21 the labor and are, to some extent, able to adjust to tough 22 times by voting themselves a lower wage during tough 23 times. So I don't think that -- I don't think that there 24 is a simple yes or no answer that I could support from my 25 knowledge of the literature. 0075 01 QUESTIONS BY MR. ROSENBERG: 02 Q. What kind of additional information would you 03 need? 04 A. I think perhaps for -- for both types of units 05 it would be important to know, for instance, about their 06 overall financial resources, about where the -- for 07 instance, with the agribusiness firm, is the sugar 08 business their only business or is this -- is this just 09 one of their enterprises, are they vertically integrated 10 in one way or another. So these would be -- these would 11 be at least some of the things that I think would be 12 important to know, their cost structure and -- the cost 13 structure, including what costs are -- what costs are 14 deferrable in the short run and that sort of thing. 15 Q. In Exhibit 6 -- look back at your table. 16 Did you use any multipliers to estimate the 17 secondary impacts of farmers going out of business? 18 A. In -- 19 Q. In the whole study. 20 A. In the whole -- in the whole study -- in the 21 whole study we did do some of that. And what we -- yeah, 22 kind of along the lines of what I had talked about 23 earlier, assuming that the land is staying in production 24 but that the -- that the mix of expenditures is different 25 with larger farming operations versus smaller ones and 0076 01 what did that mean then for community level impacts and 02 the like. 03 Q. Tell me what the methodology was again. I'm 04 sorry. I'm not fully understanding. 05 A. Okay. We were -- the basic method was an 06 input/output model, not totally -- not unlike the RIMS 07 model. And basically then the approach to the multiplier 08 analysis was assuming that the result of displacement of 09 farm families was that the land stayed in production, that 10 the net effect then was fewer and commensurately larger 11 farm units basically farming the same land. Okay. So the 12 impacts in this case were coming from a change in the mix 13 of expenditures. That is the expenditure pattern for the 14 larger farm unit was somewhat different than that for the 15 smaller farm unit and so on. 16 Q. What did the secondary impact analysis show? 17 A. In general, the secondary impact analysis then 18 indicated -- indicated economic, demographic, public 19 service effects for small farm-dependent communities. 20 That is to say with farm families being displaced, with a 21 substantial segment of those relocating from where they 22 had been living to the state's -- either to the state's 23 larger cities or relocating out of state, this then had -- 24 this had ramifications for the retail businesses in these 25 smaller communities where the primary economic base is 0077 01 farming. It also had ramifications for school enrollments 02 and this sort of thing. 03 Q. What specifically was found, though? 04 A. Well, basically that there were substantial 05 negative impacts on the retail businesses in these smaller 06 towns, substantial reductions in school enrollments. One 07 thing that had -- one thing that was important in 08 conditioning a lot of these impacts was the age structure 09 of the farm operators that were leaving farming. That is 10 to say these were predominantly people in their 30s or 11 early 40s. These, of course, tend to be folks who have 12 school-age kids and that sort of thing. So that although 13 a county might be losing only hypothetically five percent 14 of its farm families through this displacement process, 15 this could also -- those families leaving might also 16 represent 15 or 20 percent of the school-age children in 17 the farm population because of the -- because the 18 displacement process was not neutral with respect to age 19 and that sort of thing. 20 Q. If the farm stays in production, taxes would 21 still be on the farm. The succeeding farm may be more 22 productive. 23 A. Another thing that was -- 24 Q. Am I correct? 25 A. Well, I guess from the work that we had done -- 0078 01 the work we did would not support really a conclusion that 02 the succeeding operation was fundamentally more or less 03 productive. It wouldn't support the conclusion that in 04 those circumstances that we had in that setting the land 05 -- the land was almost always staying in production with 06 the exception of that that went into the government 07 retirement program, but that's kind of a separate issue. 08 Q. If the succeeding farm was a larger farm or 09 larger business or larger entity, why wouldn't there be 10 greater economies of scale and therefore greater 11 productivity? 12 A. Generally speaking, the literature would suggest 13 -- would suggest at least some economies of scale in the 14 -- in the range which we're talking about. I would say, 15 though, that, you know, going back to your question of 16 what impacts did we see, a lot of the -- a lot of the 17 impacts had to do with -- well, farm operator displacement 18 leading to outmigration leading then basically to a 19 depopulation of these -- of these farm-dependent 20 communities. 21 Q. Let me -- 22 A. And a migration which was -- migration which was 23 heavily skewed towards younger families in the area so 24 that the effects on some of the public services and so on 25 would be sort of disproportionate. 0079 01 Q. Let me back up for a second. 02 Would you not expect that the succeeding 03 farm that takes over the land of the bankrupt farmer, if 04 it were a larger entity, would be more productive because 05 of the economies of scale? 06 A. Okay. Again, while we haven't had the 07 opportunity to assess that issue from the EAA standpoint 08 in great detail, but generally -- but generally in 09 agriculture one does see the phenomena of economies of 10 scale or economies of size some would say up to at least 11 our larger farming units. And so -- and to the extent 12 then that the resources through some process are -- come 13 to be organized into fewer and larger producing units, 14 this has -- this has generally been associated with lower 15 production costs per unit of output. 16 Q. And greater productivity also? 17 A. Which you -- okay. The two are not necessarily 18 saying the same thing. Well, one way of defining 19 productivity perhaps is output per unit of -- input to 20 output per dollar of cost. Another way -- we need to 21 decide how we're defining productivity. 22 Are we talking about yield per acre or are 23 we talking about production efficiency in terms of cost 24 per unit of output? 25 Q. I don't know if there are two or three of those 0080 01 options there. 02 A. Right. 03 Q. Under all of those options, wouldn't you expect 04 greater productivity because of the economies of scale for 05 the bigger farmer and greater cost efficiency? 06 A. I would say that looking at the EAA specifically 07 that would be -- that would be a question that should be 08 addressed in the analysis per se so that we probably don't 09 have all the -- all the information to draw a conclusion 10 at this point. But generally that -- the conclusion that 11 through much of -- through much of agriculture we do have 12 economies of size at least up to -- through most of the 13 size range of units seems to be supported by the 14 literature, by studies and so on. 15 Q. Let me ask you this. I want to go back slightly 16 to your book, Impact of Growth. I understand the process 17 -- and tell me if I have it right -- is to create a 18 baseline -- 19 A. Yes. 20 Q. -- regarding what these 30-year-old farmers 21 would do in North Dakota, how many would leave the farm 22 anyhow. You would create a baseline regarding what the 23 trends were. Then you would add to that baseline 24 something else where you put debt in there, and you would 25 have a baseline without debt and a baseline with debt. 0081 01 Would you do that? 02 A. Well -- 03 Q. Because there are some folks that are going to 04 leave the farm anyhow because of one reason or another. 05 It may be that they simply can't be productive with or 06 without debt. 07 A. Let's -- 08 MS. STINSON: Object to the form. 09 You can answer if you can. But if you 10 can't -- 11 QUESTIONS BY MR. ROSENBERG: 12 Q. Do you want me to reconstruct that for you? 13 A. The general -- let me -- let me agree with your 14 statement that the general approach to an impact 15 assessment is typically to -- first develop a baseline. 16 This is also sometimes described as a projection of the 17 future without the proposed action. Here is what we think 18 the future looks like based on -- based on the past trends 19 and patterns that we see emerging and so on. And then 20 that baseline projection, as it were, serves as a basis 21 for comparison when one does projections of the effect of 22 the project, the action, whatever. 23 Q. Did you do a baseline when you did your study in 24 Exhibit 6? 25 A. Okay. The short answer is no. That was a -- 0082 01 Q. Okay. 02 (An instrument was here marked as 03 Deposition Exhibit No. 7 for identification.) 04 QUESTIONS BY MR. ROSENBERG: 05 Q. This is my favorite. 06 A. "Economic Impact of Leafy Spurge." 07 Q. Did you do that study? 08 A. Yes. 09 Q. And what sort of study was that? 10 A. Okay. The objective of the study was to 11 evaluate the economic impact of the infestations of leafy 12 spurge, a perennial weed, on livestock producers and on 13 the rural economy in North Dakota. 14 Q. What was the purpose of the study? 15 A. The purpose -- the purpose was really to be able 16 to provide to policymakers and other interested parties an 17 estimate of how important the leafy spurge problem was in 18 the state. A secondary -- secondary purpose, I guess, was 19 to provide an attempt at quantifying not only the impact 20 to livestock producers but also to quantify how important 21 is this to the rest of the state economy, to retail 22 businesses in farm-dependent communities and the like. 23 Q. Who were you doing the project for? Who 24 commissioned the project? 25 A. The project was commissioned by the U.S. 0083 01 Department of Agriculture, specifically the Animal and 02 Plant Health Inspection Service better known as APHIS, 03 A-P-H-I-S, of USDA. This group has been engaged for a 04 number of years in research on control of leafy spurge as 05 well as other undesirable and noxious plants, animals, 06 screw worm flies and the like. 07 Q. You did that economic study for them? 08 A. Yes. 09 Q. Is this a socioeconomic study? 10 A. I would -- I would term it as -- really as just 11 an economic study. We did not get into many of these 12 other dimensions that we talked about earlier, the 13 population effects, community services and so on. 14 Q. Is that because of what the purpose of what the 15 study was to be used for? 16 A. In part or -- yeah, what the study was to be 17 used for, what people thought, what people felt were the 18 major questions or issues, as it were. 19 Q. Let me ask you about a couple of quotes here. 20 Let me point that out to you so you can follow it. Right 21 here. 22 MS. STINSON: We're on exhibit -- 23 QUESTIONS BY MR. ROSENBERG: 24 Q. We're on Exhibit 7. 25 A. You have a different -- 0084 01 Q. What do you have there? 02 A. I have "Economic Impact of Leafy Spurge." 03 (At this time there was a brief discussion 04 off the record.) 05 QUESTIONS BY MR. ROSENBERG: 06 Q. We're done with the leafy spurge. I have asked 07 you those questions. My notes got attached to the wrong 08 exhibit. I'll just back up. 09 MR. SAXE: The leafy spurge exhibit was -- 10 excuse me. 11 MS. STINSON: Exhibit 7. 12 MR. SAXE: Exhibit 7? 13 MR. ROSENBERG: Right. 14 QUESTIONS BY MR. ROSENBERG: 15 Q. Let me back up, though. 16 You testified -- and tell me if I have it 17 right -- that there may be community impacts without land 18 going out of production? 19 A. Yes. 20 Q. Okay. And there may be these impacts if there 21 is a changing pattern of ownership succession? 22 A. Uh-huh. 23 Q. In this case, small operators would be taken 24 over by agribusiness. Is that true? 25 A. Is what true? 0085 01 Q. I'm just going through your testimony before the 02 break. 03 Is my summary true? 04 A. That that kind of a change in the structure of 05 agriculture ownership and control could have community 06 impacts even if no land leaves production. And, yes, that 07 represents -- 08 Q. And is one reason for that because the 09 agribusiness people have different purchasing practices? 10 A. Yes. 11 Q. Different employment practices? Different ways 12 of doing business? 13 A. That could be one factor, yes. 14 Q. Okay. What sort of information would you need in 15 order to complete this assessment for the EAA? 16 A. Okay. 17 MS. STINSON: Excuse me. Objection to 18 form. I ask for clarification. 19 This assessment being? 20 MR. ROSENBERG: The assessment of community 21 impacts without land going out of production. He 22 testified before the break -- and again I just asked him: 23 Could there be community impacts without land going out of 24 production? 25 QUESTIONS BY MR. ROSENBERG: 0086 01 Q. And so my question is: In order to assess these 02 community impacts without land going out of production, 03 what sort of information do you need to make this 04 assessment? 05 MR. ROSENBERG: Do you still have an 06 objection? 07 MS. STINSON: No, not to that last 08 question. 09 QUESTIONS BY MR. ROSENBERG: 10 Q. What sort of information do you need to assess 11 this? 12 A. One would need information about basically -- 13 one would need information about the expenditure patterns, 14 labor use and so on by the type of farms that are 15 disappearing from the scene and also the same -- the same 16 kind of information about the kind of farm that we would 17 have after the restructuring so that one could make some 18 assessments about changes in agricultural labor use and 19 also in the pattern of expenditures by the two kinds of 20 farms. 21 Q. Do you have this sort of information now? 22 A. No. That's one of the things that we will be 23 obtaining as part of our analysis. 24 Q. How are you going to obtain that information? 25 A. Okay. Basically from public sources. 0087 01 Q. And what specifically are you going to get from 02 public sources that will enable you to conduct your 03 assessment? 04 A. Okay. Well, basically production practices, 05 expenditure patterns, labor use. Sources that I would 06 think that we would look at would include USDA 07 information, also some of the reports by the IFAS of the 08 University of Florida and so forth. Those would be some 09 of the sources we would want to look at. 10 Q. Have you started this information gathering 11 practice yet? 12 A. Yes. 13 Q. And what have you secured so far? 14 A. We certainly have obtained a large collection of 15 materials from IFAS, also from USDA. 16 Q. Specifically telling you what? 17 A. Well, a variety of information about, you know, 18 the budgets from IFAS, budgets meaning a summary of costs 19 and returns for producing different kinds of crops, 20 information from USDA describing really the structure of 21 the sugar industry in Florida and so on. 22 Q. What about purchasing patterns of small farmers 23 and big farmers? Do you have that information? 24 A. Not as yet. 25 Q. Is that available from public sources? 0088 01 A. To some extent. We believe we can get some 02 information from public sources that will bear on that. 03 Q. What about information regarding farm financial 04 characteristics? Is that available from public sources? 05 A. Again, that's available, as I understand it, to 06 some extent. And, again, that's one of the things that 07 we're looking into with respect to information that USDA 08 may have collected, also other sources as well. 09 Q. You say it's available to some extent. To what 10 extent is it available? Do you know? 11 A. I guess that's what we're still trying to 12 determine, what degree of detail and so on. 13 Q. Would you also need to know for this assessment 14 of community impacts without land going out of production 15 debt characteristics of the bigger farms and the smaller 16 farms? 17 A. That would be desirable. 18 Q. Where would you get that information? 19 A. Well, again, some of that information is 20 collected by USDA, for instance, in their farm costs and 21 return surveys and also in their work on sugar production 22 costs and so on. 23 Q. Let me back up. 24 You would need information on farm 25 financial characteristics, debt, investments and 0089 01 integration of the operation, wouldn't you? 02 A. Those would be -- that would be the kind of 03 information that would be quite desirable, yes. 04 Q. What if that information is not -- what if the 05 public data on that is not complete or is insufficient? 06 What would you do then? 07 MS. STINSON: Object to form. 08 MR. SAXE: Grounds? 09 MS. STINSON: Calls for speculation. 10 QUESTIONS BY MR. ROSENBERG: 11 Q. You are an analyst. You make assessments. 12 What would you do if in making your 13 analysis the public data on the subject matter you are 14 writing on is insufficient? 15 A. There are, of course, you know -- with almost 16 any kind of data there are degrees of adequacy or 17 whatever. One source that -- one source that many 18 analysts use when hard, quantitative, published data is 19 not readily available is essentially obtaining information 20 or estimates from "industry experts," people who are 21 supposed to be knowledgeable about the industry. And 22 there are different ways of approaching this. 23 One approach that we have used in some of 24 our previous studies is one that's called a Delphi process 25 where -- which is a process for trying to get a consensus 0090 01 of "expert opinion". So these are -- these are some of 02 the approaches that one can use. 03 Q. Is that what an economist would do if he was 04 going to give an opinion on something? He would go to 05 other economists and get their opinion as opposed to 06 getting hard evidence or evidence that he can substantiate? 07 MS. STINSON: Object to form. 08 THE WITNESS: To respond to that question, 09 there is probably quite a continuum in hardness of data or 10 information. But certainly in trying to obtain a 11 consensus of opinion from people who are "knowledgeable 12 about an industry" is a time-honored approach when, in 13 fact, it is not possible or not deemed feasible to, for 14 instance, conduct a census or a survey or audit or 15 whatever. 16 QUESTIONS BY MR. ROSENBERG: 17 Q. Let me ask you two questions. 18 No. 1, don't you, as an economist, want to 19 check information for accuracy? 20 A. Oh, yes. 21 Q. How could you check this information for accuracy? 22 A. Again, the -- a process like this Delphi 23 technique that I was alluding to is supposed to -- well, 24 is regarded as having a sort of some internal consistency 25 checks, that is to say because you're obtaining 0091 01 information not from one person who is supposed to know 02 something about the topic but, in fact, you're obtaining 03 information from several and attempting to reach 04 consensus. 05 Another approach -- 06 Q. But none of those sources are primary sources. 07 Am I correct? 08 MS. STINSON: Object. I think you cut him 09 off in the answer. 10 MR. ROSENBERG: I didn't think he was being 11 responsive to my question. 12 QUESTIONS BY MR. ROSENBERG: 13 Q. If you want to go through that and give me the 14 balance of your answer -- 15 A. Well, of course, we're speaking in somewhat 16 general terms here, I guess. I would say that the kind of 17 industry -- industry experts, as it were, that one might 18 consult could include both -- could include individuals 19 who have primary data. 20 Another approach that is often used in 21 situations where there is -- where there is some degree of 22 uncertainty about a particular variable or parameter or 23 whatever is one that is known as sensitivity analysis. 24 That is where one with one's models or whatever looks at 25 basically multiple scenarios and, in fact, looks at what 0092 01 is the effect of varying a particular parameter. Maybe to 02 follow your example, it might be debt structure. How 03 sensitive are the results to the initial debt structure 04 that's assumed would be the sort of question that one can 05 subject to a sensitivity analysis. 06 Q. When we start talking about sensitivity 07 analysis, aren't we talking about getting information 08 that's either anecdotal or not from a primary source or 09 incapable of being a check for accuracy? 10 MS. STINSON: Object to form. 11 THE WITNESS: Well -- 12 QUESTIONS BY MR. ROSENBERG: 13 Q. Let's break it up. 14 Isn't the information received anecdotal? 15 A. I suspect -- I'm trying to think of the best way 16 to articulate. I suppose that one could define any 17 information that doesn't come from a primary source as in 18 some sense anecdotal or -- well, I guess there are, you 19 know -- again, there is kind of a continuum in how hard 20 information might be or -- 21 Q. How would you check it for accuracy? How would 22 you check the information for accuracy? Isn't that a 23 problem? 24 MS. STINSON: I think asked and answered. 25 MR. ROSENBERG: He's shaking his head, but 0093 01 he's not answering. 02 THE WITNESS: Well, there are, as I say, 03 probably, you know, a number of different ways of trying 04 to assure reliability, let's say, of information. And one 05 approach is to -- one approach is what some people in the 06 social sciences I guess have termed triangulation, that is 07 obtaining information from multiple sources and seeing if, 08 in fact, the information obtained from multiple sources or 09 multiple methods is -- appears to be consistent. Okay. 10 So -- and I think that's really what -- really what I'm 11 talking about here is for perhaps kinds of information 12 that are not -- not readily obtainable from standard 13 published sources like censuses or government reports. 14 One -- some alternatives include consulting 15 people who are knowledgeable about the industry and, you 16 know, probably consulting multiple knowledgeable observers 17 to see if one doesn't get some consensus at least about 18 ranges of values and that sort of thing. 19 QUESTIONS BY MR. ROSENBERG: 20 Q. Now, when you go to these people who are 21 knowledgeable about the industry, wouldn't you exclude 22 those people with either financial interests or 23 involvement in the industry? 24 A. Well, depending on how one defines involvement, 25 you could wrap -- one could be in a situation of excluding 0094 01 most of the people who know very much about the industry 02 possibly. 03 Q. Isn't that exactly the situation we have here? 04 MS. STINSON: Object to form. 05 QUESTIONS BY MR. ROSENBERG: 06 Q. That there are no sources for the information 07 other than a survey of the industry people themselves? 08 A. Again, I would say that, you know, there are 09 multiple, multiple sources which differ I guess in the 10 degree of primariness of the information. And one -- you 11 know, at one extreme one can think of, you know, being in 12 a position of obtaining detailed financial records from 13 every sugar-producing business in the EAA and one can 14 think about moving along a continuum from that -- 15 Q. Can you name these sources for me? Can you tell 16 me who they are? 17 A. In terms of specific -- 18 Q. You said there were a number of sources. I'm 19 asking you to identify them for me. 20 A. Okay. I would certainly identify the types of 21 -- types of entities that -- 22 Q. I'm asking for exactly the sources, though. 23 You said there were a number of sources. I'm asking you: 24 What sources? Who are they? 25 A. I would not feel comfortable identifying 0095 01 specific individuals, although there are some specific 02 individuals that I have already talked to. In general 03 terms, I can certainly suggest some of the kinds of people 04 that would logically be -- 05 Q. I want to know -- 06 A. -- appropriate candidates. 07 Q. -- specifically who you have talked to and what 08 information they have provided. 09 A. Okay. Well, again, in terms of specific 10 individuals that we -- that I have talked to, that would 11 include individuals at IFAS, particularly David Mulkey who 12 discussed some of the previous economic impact studies 13 that they had been involved in, including people at USDA 14 like Annette Claussen. 15 But certainly in terms of people that we 16 would be potentially contacting to get some of the kinds 17 of information that we've been discussing in the last 18 little bit, it would be a -- you know, a much broader 19 group of people than the ones that we've talked to to date 20 certainly. 21 Q. What information has Annette Claussen given 22 you? 23 A. Okay. She had -- she or people in her office 24 had sent us, you know, some of their -- some of their 25 published material, information they had published about 0096 01 sugar production costs and the like. I would have to go 02 and -- I can't right now testify to how many separate 03 documents and so on. 04 Q. Other than Annette Claussen and David Mulkey, 05 have you talked to anybody else to secure information on 06 farm financial characteristics, debt, investments, 07 integration of operation? 08 A. Okay. Another individual that I talked to early 09 on is a Dr. Jim Johnson who is within the USDA. His -- he 10 is the person that is essentially in charge of the group 11 that conducts what is called the farm costs and returns 12 surveys. This is, I believe, at this point an annual 13 survey that USDA conducts. 14 Q. Is the information you received from Johnson, 15 Claussen and Mulkey sufficient for you to conduct a 16 community impacts analysis? 17 MS. STINSON: Object to form. 18 THE WITNESS: I guess the answer would be 19 that the information we have obtained to date is certainly 20 not everything that we would like to have as the basis for 21 an impact analysis. 22 QUESTIONS BY MR. ROSENBERG: 23 Q. Wouldn't it be fair to say that the information 24 from Johnson and Claussen and Mulkey is insufficient for 25 what you need to do to conduct a community impacts 0097 01 analysis? 02 A. I would prefer to use the term less than what we 03 would ideally like to have. Again, there are kind of 04 degrees of sufficiency or lack thereof. 05 Q. Does the Department of Agriculture distinguish 06 purchasing patterns by farm size? 07 A. Not in detail in their farm cost return 08 surveys. 09 Q. Does IFAS distinguish producing patterns by farm 10 size? 11 A. Not in detail, at least in the materials I have 12 seen to date. 13 Q. Do any of your sources that you have collected 14 today distinguish purchasing patterns by farm size? 15 A. Not in any -- not in detail. 16 Q. What else are you going to do then if you can't 17 get the information from either IFAS or USDA or Johnson to 18 gather sufficient information to make an analysis of the 19 community impacts? 20 A. Well, of course, the questions about purchasing 21 patterns of alternative farm sizes and so on is only one 22 dimension of the whole, questions about direct and 23 secondary impacts. And as we move along with the study, I 24 guess, you know, in general we'll see what -- see what the 25 options appear to be for information on a number of 0098 01 different dimensions that seem to be important. 02 Q. When did you start this information gathering 03 process? 04 A. I guess you could say we started -- we started 05 back in September. 06 Q. And what other steps do you intend to take to 07 get more information? 08 A. Well, I guess in the first place, I would say, 09 too, that I'm only -- I'm only one of a team of people 10 working on the project. And so in terms of what I'll be 11 asked to do versus what other people involved in the 12 project may be doing is a question of -- I don't know 13 exactly how that will all -- will all shake out. 14 Q. What does that mean? I didn't understand your 15 statement. 16 A. Okay. In other words, you were asking what 17 steps I intended to take to get more information. And I 18 was -- I was commenting I'm not sure to what extent I'll 19 be responsible for gathering some of this information 20 versus other folks that are working on the project. 21 Q. Are you the person that's going to make the 22 analysis? 23 A. I'll be one of the people responsible for the 24 analysis, yes. 25 Q. Won't you have a hand in deciding what 0099 01 information should be collected? 02 A. Certainly. 03 Q. And who is going to collect it? 04 A. Certainly. 05 Q. So you would know that, wouldn't you? 06 A. I will have a hand in that decision, as you say, 07 yes. 08 Q. And haven't you been meeting with the rest of 09 your team from time to time regarding this? 10 A. Sure. 11 Q. And is it your testimony that you don't know what 12 additional steps are being taken now to gather further 13 information? 14 A. I probably should not -- well, I can certainly 15 say, you know, in general terms that we're, you know, 16 working with people who are familiar with the industry, 17 you know, to get information of a variety of types. 18 Q. But, specifically, who are you going to get the 19 information from? Who are you working with and who are 20 you going to get the information from? Who are they going 21 to get the information from? 22 A. I suppose one response, perhaps the most 23 appropriate response at this point would be that, you 24 know, we're not -- I'm not certain in detail what entity 25 or individual will be able to provide what specifi