Assessing the economic benefit of area wide management and the sterile insect technique for the Queensland fruit fly in pest-free vs. endemic regions of South-east Australia

Abstract

This study evaluates the economic potential for Area Wide Management (AWM) of the Queensland fruit fly (Qfly) using the Sterile Insect Technique (SIT) through three case studies across endemic and Pest-Free Areas (PFA) in south-east Australia. The cost of Qfly needs to be identified before the potential benefit of AWM and SIT can be evaluated. We use results from grower workshops and expert elicitation to identify the financial cost of Qfly to growers (the baseline) and the potential impact of AWM as a precursor to SIT (scenarios). Results show a net benefit from maintaining PFA status. In endemic regions, the potential financial benefits to growers of are low. Avoided adjustment costs that contribute to a net benefit in PFA’s are sunk in endemic regions. The low threshold for Qfly in markets and on-farm, and availability of cost-effective management options, implies limited benefits from avoided management costs. Market access is uncertain and AWM and SIT alone are not sufficient to access these benefits. Although there may be exceptions, we find limited grower benefits from AWM and SIT in Qfly endemic growing regions.

Keywords:

• Market access
• Qfly
• economic impact
• pest management
• horticulture

Notes

Disclosure statement

The authors report no conflict of interest.

Acknowledgements

The authors would like to thank participants from our case study regions and experts who took the time to share their views with us. We are very thankful for the valuable contributions of reviewers in improving this manuscript. We would also like to thank Dr Hazel Parry for her significant contributions to the project, Jeff Connor, Rieks van Klinken, Nancy Schellhorn, and the support and discussion from the wider project team and affiliates. This paper is an output from the Adaptive Area Wide Management of Qfly using SIT project.

Notes

1 The other being the Mediterranean fruit fly (Medfly) (Ceratitis capitata) which is established in Western Australia only.

2 SIT is already in limited use in Australia using a bi-sex strain of sterile flies. At publication, a male-only strain of Qfly has not been identified.

3 Although suspended, Sunraysia is officially a regulated PFA, at the time of writing.

4 http://www.pir.sa.gov.au/biosecurity/fruit_fly/fruit_fly

5 In Australia, projects seeking Federal Government funding generally follows the 7% discount rate (with sensitivity testing taken at 3% and 10%) guideline set by Infrastructure Australia (Transport for NSW 2019). A recent proposal by the Grattan Institute (see Terrill and Batrouney 2018) suggest that due to the current low interest rates, the recommended discount rate for low-risk infrastructure should be 3.5% while higher risk projects should be 5%. We have chosen a 7% discount rate in this analysis following the Australian Government’s net present value calculation guidelines. However, given the recent debates around lowering the discount rates to around 3% to 5%, we conducted a sensitivity analysis at discount rates of 3% and 10% to test the robustness of our findings to changes in the discount rate.

6 As interview results indicate, individual grower management actions and beliefs are highly heterogeneous (both actions and the “most effective” way to conduct them). This includes the behavioural factors that impact grower decision making and the role of risk management, including identification of heterogeneous risk perceptions and preferences.

7 If the required percentage of adoption to achieve suppression were higher, this would strengthen our results.

8 Experts indicated that cover sprays may be applied targeting other pests but also thought to be effective in combating Qfly by growers further complicating changes to pesticide usage.

9 Jessup et al. (2007) identify cover spray applications were reduced from about 12-15 times a season to 4-5 times during Area Wide-Integrated Pest Management (‘AW-IPM’) trials in New South Wales and Queensland. During interviews in the endemic study regions growers stated they were already spraying only around 4-5 times per season, and thus the scope for further reduction through AWM and SIT for Qfly is not clear.

10 A male-only strain of Qfly is a new technology, meaning there is still uncertainty in the cost. International examples of SIT costs are in developing countries and/or not of comparable production capacity (see Klassen (2005)).

Additional information

Funding

The Adaptive Area Wide Management of Qfly using SIT project is being delivered by Hort Innovation in partnership with CSIRO, and is supported by funding from the Australian Government Department of Agriculture & Water Resources as part of its Rural R&D for Profit program. Further partners include QUT, Agriculture Victoria, NSW DPI, PIRSA, SARDI, Wine Australia and BioFly. The Adaptive Area Wide Management of Qfly using SIT project is part of the SITplus program formed under the Fruit Fly Fund, part of Hort Innovation’s recently developed strategic partnership initiative, Hort Frontiers.