A Stochastic Bioeconomic Model to Demonstrate the Benefits of Pest Exclusion The Case of the Varroa Bee Mite International Plant Health Risk Analysis Workshop Niagara Falls, Canada, 24 - 28 October 2005 David Cook

Outline Introduction - Cost sharing arrangements for invasive species - The role of economics in risk assessment - The Varroa Bee Mite The model - Framework - Assumptions - Outputs & Interpretation Results - Implications for cost sharing arrangements Conclusions

Biosecurity Service Provision in Australia Two “emergency response” cost sharing agreements: Emergency Animal Disease Response Agreement (EADRA) Emergency Plant Pest Response Deed (EPPRD) Cost share categories, public vs. private benefit of eradication: Public Private Category 1 100% 0% Category 2 80% 20% Category 3 50% 50% Category 3 20% 80% Varroa (EADRA)

Varroa Mite V. destructor is a parasitic mite that attacks adult honeybees and their developing larvae; Infestations result in the production of deformed bees, reduced longevity of individuals and slow death of the colony; Present throughout much of the world, but has yet to be detected in Australia; Spread between colonies usually high; Can be controlled in the beekeeping industry (at considerable cost), but wild European honeybees are severely affected. D. Anderson, CSIRO Entomology S. Bauer, ARS/USDA

Previous Estimates Industries Assistance Commission (1985) <A$160 million Gill (1989), Gibbs and Muirhead (1998) Between A$0.6 billion and $1.2 billion Gordon and Davis (2003) A$1.7 billion Robinson et al (1989) - US$9.3 billion Morse and Calderone (2000) - US$14.6 billion Muth and Thurman (1995) - US$600 million. Pollination benefits ≠ expected Varroa damage.

The Model NATIONAL BOUNDARY Total area summed across all satellites increases until reaching Amax, at which point it remains constant NATIONAL BOUNDARY New satellite population Established population Parameters: Parr - Arrival probability Pest - Establishment probability D - Diffusion coefficient r - Intrinsic rate of density increase K - Carrying capacity N - Local population density µ - Rate of new satellite generation Amax - Total host area Amin - Initial area affected g - Rate of spread

Interpretation Framework provides a base-case entry scenario where spread and impact are severe In the event of a ‘real’ incursion, results represent the benefits of eradication over time i.e. one half on a benefit cost analysis The model says nothing of efficiency in managing risk over time.

Cost & Revenue Implications 25 crops used in the analysis Crops used were placed in one of four categories roughly proportional to pollinator reliance Low (0-5% yield loss) Moderate (0-10%) High (0-20%) Very High (10-30%) Number of additional commercial hives required varied between 0 and 5 per hectare, depending on the crop Additional costs per hive estimated between A$90-120/yr.

Expected Economic Impact (A$/Yr) – 30 Year Average

Cost/time Relationship Over 30 Years

Pollination Benefits by Industry

Sensitivity Analysis Probability of entry Prevention better than cure? Intrinsic rate of population growth Implies high returns to investment in R&D activities concerning the control of inter-colony spread Yield Loss Discount rate

Conclusions Estimate that annual benefits of exclusion to Australian plant industries of between A$21.9 million and A$51.4 million; Results far less than previous estimates, but are nonetheless indicative of an extremely destructive pest; Cost sharing arrangements in Australia relating to the eradication of Varroa may be inappropriate.

Thank You Contact Name David Cook Title Research Economist Phone +61 2 6246 4093 Email david.c.cook@csiro.au Web www.csiro.au Contact CSIRO Phone 1300 363 400 +61 3 9545 2176 Email enquiries@csiro.au Web www.csiro.au