The economics of managing Verticillium wilt, an imported disease in California lettuce

Verticillium dahliae is a soilborne fungus that is introduced to the soil via infested spinach seeds and that causes lettuce to be afflicted with Verticillium wilt. This disease has spread rapidly through the Salinas Valley, the prime lettuce production region of California. Verticillium wilt can be prevented or controlled by the grower by fumigating, planting broccoli, or not planting spinach. Because these control options require long-term investment for future gain, renters might not take the steps needed to control Verticillium wilt. Verticillium wilt can also be prevented or controlled by a spinach seed company through testing and cleaning the spinach seeds. However, seed companies are unwilling to test or clean spinach seeds, as they are not affected by this disease. We discuss our research on the externalities that arise with renters, and between seed companies and growers, due to Verticillium wilt. These externalities have important implications for the management of Verticillium wilt in particular, and for the management of diseases in agriculture in general.