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December 22, 2008

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If NYWGF wants to make a case for continued funding, they need to make the case empirically. Yes, we know that more wineries have opened; yes, we know that more wine is made; yes, we know that more people visit the wineries.

The problem is that I don't believe it's a prima facie case that all of those things stem from NYWGF efforts.

I'm not saying NYWGF is not responsible. I'm saying it ought to be proven. Lay out the case with effective data. Don't just say that wine is booming.

There are many -- many -- people in the wine industry who do not attribute the success of the industry to NYWGF efforts. They believe the industry is succeeding for a variety of reasons -- better winemaking, better growing, attractive tasting rooms -- that have little or nothing to do with NYWGF.

This is bound to be an interesting debate for NY lawmakers, and I'd venture a guess that in the end, NY wineries will benefit -- even if funding is not restored. Art Hunt showed us why: They're going to re-think certain approaches and they're going to work to succeed independently.

Evan - I'm not an economist, or a lawyer, but it seems to me that the alternative reasons you list are also not prima facie cases for recent *economic* success in the NY wine industry.

I'd think that they it would be far more difficult to prove a relationship between things like attractive tasting rooms and the $3B that the industry brings into the NY economy than it would direct investment from the legislature.

"This is also an opportunity for the NYWGF (as well as member wineries) to re-think how they operate. To survive in this tight economy, you simply can't rely on the same old programs. Innovation and the leveraging of new technology is a must. This might force everyone in the industry to improve how they promote and market themselves. In that sense, a little short-term pain might lead to better days in the long run."

I'm with you, this doesn't have to be as devastating as it may seem. For those wineries who are willing to become more proactive in courting customers in the ways that THE CUSTOMER PREFERS to be communicated with such as social media, this could work to their great advantage by creating long-term relationships and winery brands that aren't so easily dismissed or forgotten.

1WineDude,

You're absolutely right. My point is that many industry folks believe the success comes from developments outside the NYWGF. We don't know for certain. But if Mr. Trezise and his staff wanted to make a convincing case, they could offer some kind of empirical data -- the kind of data that is easier to quantify than new tasting rooms or "better" (there's a nebulous term) wine.

And perhaps I'm wrong; perhaps NYWGF won't have much more to say. But I doubt it. If they're making the impact they say they're making, they ought to be able to soundly explain and illustrate it.

(Again, I think they very possibly might be making such an impact! I just respond more easily to well constructed arguments and data).

I think we could all argue in circles about what helps the wine industry succeed versus the relative value of the foundation.

Yet, it's not the foundation's own actions that have brought us to this point. We are here because of fiscal irresponsbility across the board. Public budgeting does not work like corporate budgeting or even the private budgeting we do in our own lives. So, one can make the point that only a few modest millions invested in the wine industry can bring a "return" in the billions, but this is immaterial in the grand scheme of things.

Government, and New York State government in particular, makes budgeting decisions based not on effectiveness or outcome, but primarily on previous allocations. In a simplified example, if your government consists of 10 departments, your budgeting process for the next year involves the primary assumption that the former budgets for all 10 departments is baseline zero and that your new budget involves how much of an INCREASE each department gets. At that point, effectiveness might be considered, but this analysis is then completely clouded by lobbying, district and constituent loyalties, etc. The end result: while not all departments might end up with the same increase, they ALL go up.

In a worst case scenario, a previously existing program might be granted the same level of funding, but it's not like it's going to be cut completely. That means that if a program cost $10 million last year, it will cost $10 million this year and then will be added to the bases increases for all the better programs. The overall budget gets expotentially bigger!

Obviously, this cannot go on forever. Each constituency is going to claim that their department, agency, program, or special interest is valid and a good investment, and many of them might be right, but in the whole scheme everyone is wrong because there is simply no way to pay for it all.

Does government belong in the wine industry? To some degree, of course. Alcohol has to be regulated in a reasonable fashion and any agricultural interests should have some sort of advocate, especially in areas that have unreasonable market pressures to develop open land blindly (Long Island, for example).

But, should government be essentially marketing and advocating for products that may or may not be appealing to consumers? In my opinion, no, as I always believe that private interests tend to have the flexibility and incentives to do the job right. Wherever money is to be made and willing consumers are to be found, business people will fill the void.

It's funny that in what little outsourcing government does is often to private firms in cutting edge fields. Commercial marketing is basically an American invention, and yet we need the state to step in to make sure it gets done right?

Anyway, some food for thought...

Jason,

Excellent points. Adding to your thoughts about the government getting involved in private enterprise... Corn-based ethanol is a fine example of what the government can do wrong with ostensibly good intentions. Instead of funding research for alternative fuels in an equitable fashion, government picked a winner and propped up corn ethanol. But simply forcing corn ethanol into the marketplace did not result in success; in fact, it's had other unintended consequences that have rendered the whole things a failure.

Anyway, the point is that you're right: even if some entities can reasonably say they pay back the government's investment, the practice has gotten so out-of-hand that it might need a complete overhaul.

One benefit of the foundation's work that has not been cited here: media outreach. As someone who has written several articles about New York wine over the years, including The San Francisco Chronicle Wine section's first major coverage of NY wines after the 2005 Supreme Court ruling, I can attest that the NYGWF is extremely active and helpful in getting information for journalists and for boosting the state's visibility in the media.

Now, I can't produce any "empirical evidence" that my articles have led directly to increased foot traffic in winery tasting rooms or boosted any winery's bottom line. But if you ask winemakers about the value of a positive writeup, the only ones who will downplay it are the ones who don't get any.

Dave,

Actually, your story might seem anecdotal on its own, but I'd appreciate seeing the numbers on how often FL wines are reviewed, featured, etc. And given your perspective, it's a good bet that NYWGF has a lot to do with any increase. I'm not demanding anything over-the-top when it comes to "evidence" of the impact of NYWGF; I'm just looking for something more than "wine production is up; more wineries are open."

Your last comment was dead on. I don't know any winemakers who aren't looking for positive press.

well i honestly dont see what they have been doing with $3 million a year. Their web page is certainly not costing them that.

and be careful how much stock you put into Cornell. they are just researchers, and they use our vineyards and orchards as case studies, that's it (aka their work never directly benefits those places they do research, its basically like if you had cancer putting yourself into a medical research program; it may cure cancer, but not yours). Ive seen their "experimental orchard" they have in Highland, they have a bunch of pine trees planted there?!?!? meanwhile i can think of 7-10 perfect properties just down the road they should be using. And their encourage people to plant their new high density orchards (for their own research purposes) as if apples haven't failed the Hudson Valley area already. AND they patent their new varieties! isn't that a total contradiction of what ag extension are suppose to do? their suppose to create models that farmers can copy easily and for free.

With school budgets and medicaid being slashed, it is hard to imagine that the NY&GF will escape serious cuts in its funding.

The NYW&GF has its share of supporters and detractors and while much of the criticism in this thread may be valid, let us remember that it has almost an impossible mission: how do you promote concord juice and high quality vitis vinifera wine under the same roof?

It has implemented a number of programs that were useful and of late its PR efforts have improved. Yet it may still be in the "nice to have" rather than "of strategic importance" category.

With the state wanting to triple the excise tax, where the real money is, I wonder if, to placate the industry, it will restore funding to the NYW&GF provided we do not fight the excie tax. We will see.

Should there be serious cuts the question then is what do we do. Most businesses in order to prosper have to keep re inventing themselves. The same is (or should be ) true of governement and agencies like the NYW&GF. The time is ripe for re structuring and reforming an agency that has not yet fulfilled its desired potential.

What is needed is a program similar to what other wine regions have implemented, such as the wines of Spain, Germany or the West coast.

NY has not yet shown that it has understood that need.

A rejuvenated NYW&GF or a successor should be very narrowly focused on this goal. The state should learn from these other governments that spending the needed funds is actualy a good investments as it translates into increased sales, therefore increased taxes, increased employment, therefore increased taxes again and increased production therefoe increased taxes again. Unfortunately NY has not shown that it has understood that math and continues to shortchange itself.

But perhaps this time we may still surprise ourselves, if in fact the excise tax goes through and parts of it are plowed back for this purpose. Again we will see.

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