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Economic Analysis of Honey Bee Disease Management Strategies for the South Australian Apiary Industry

Glenn Ronan and Elena Petrenas

No 124545, 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand from Australian Agricultural and Resource Economics Society

Abstract: South Australia’s Minister for Primary Industries, Natural Resources and Regional Development in 1996 delegated to an industry based Apiary Task Force the role to develop and implement a cost effective disease control strategy. Underlying this broad term of reference was the need to increase industry’s self reliance in dealing with such problems. In formulating their recommendations the Apiary Task Force considered several honey bee disease management strategies – ranging from neither Government nor industry organised programs, to purely market driven initiatives based on price signals and elements of quality assurance to increasing levels of regulatory control supported by honey packer QA. These strategies were assessed against their ability to reduce the prevalence of AFB within the State and select economic criteria to determine Government’s role in the program. A range of possible honey bee disease management strategies were evaluated against on disease prevalence and economic criteria as part of a South Australian Government appointed Apiary Task Force to select and implement a ‘best’ strategy for industry and government. Importantly, the terms of reference specified that the strategy should also lead to greater self-reliance in disease control by the apiary industry in the next two years. Three economic ‘screens’ were applied to aid program evaluation - market failure, public:private benefit and benefit:cost analysis. ‘Quality assurance’ (QA) had the best benefit:cost ratio (BCR) at 9.0, but a poor apiary operation disease prevalence (AODP) of 50 percent by 2002. ‘Eradication’ had the best AODP projection (7 percent) but the worst BCR (1.0). A mandatory disease control strategy (BCR=1.8; AODP=20%), which includes QA, has been recommended by the Task Force to wind-in the current 32 percent AODP before considering QA as a stand-alone strategy. Market failure, due to negative externalities (infection from diseased apiaries to disease-free apiaries) is at the root of the industry’s disease management problems and provides grounds for government intervention. Information gaps about disease diagnosis and management are a contributing factor. A public:private benefit split of 10:90, when government has been the principal fund provider, is a case for improving funding alignment under present agency policy. In the context of a relatively small primary industry with a low capacity to pay the evaluation adds challenge to implementation of the new strategy, especially the transition to greater self reliance in funding disease control programs. The Australian Honey Bee Industry Council is developing a national plan for the control of American Foulbrood (AFB), involving honey testing all beekeeper’s for AFB, a comprehensive quality assurance program and the accreditation of beekeepers.

Keywords: Agribusiness; Risk and Uncertainty (search for similar items in EconPapers)
Date: 1999-01
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DOI: 10.22004/ag.econ.124545

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