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Economic benefits to Papua New Guinea and Australia from the biological control of banana skipper (Erionota thrax)

Doug F. Waterhouse, Birribi Dillon and David P. Vincent

No 47653, Impact Assessment Series (IAS) from Australian Centre for International Agricultural Research

Abstract: Larvae of the butterfly Erionota thrax, the banana skipper, destroy the leaves of bananas by eating them and forming massive protective rolls of leaf tissue. They were first observed in north-western Papua New Guinea in 1983 and over the next 6 years spread throughout the mainland at the rate of up to 500 km/year. E. thrax has also spread across the ocean to the east, to invade New Britain, Duke of York and New Ireland islands, and possibly Bougainville. As the banana skipper spread, it destroyed an average of some 60% of banana leaves, leading to both a serious delay in fruit maturation and reduced weight of banana bunches. Previous successful biological control of E. thrax when it invaded Mauritius, Hawaii, Guam and Saipan encouraged Papua New Guinea to launch an approach to ACIAR for funds. This was successful and a project was undertaken from 1988 to 1990. After careful tests to ensure that it was safe to do so, the larval parasite Cotesia erionotae was introduced and established, leading to a reduction in the estimated average leaf damage from about 60% to 5%. Using the estimated production value of bananas in Papua New Guinea to the year 2020, the losses due to banana skipper each year were calculated. Using a discount rate of 5%, the net present value of lost production amounts to approximately A$301.8 million. The value of damage prevented by biological control is estimated at $201.6 million. The reduction of banana skipper abundance by 90% in southern Papua New Guinea has correspondingly reduced the chance of adults invading not only Australian islands in the Torres Strait but also the Australian mainland. The successful biological control program in Papua New Guinea has therefore provided significant benefits to banana production in Australia. Assuming similar levels of damage in Australia as in Papua New Guinea, we estimate these benefits to be $223 million to the year 2020. The present value of total benefits from the ACIAR project equals $424.7 million ($201.6 million to Papua New Guinea and $223.1 million to Australia). This compares with the present value of the cost of the ACIAR project of $0.70 million, giving a benefit–cost ratio of 607 and an internal rate of return of 190%.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Farm Management; Food Security and Poverty; International Development; Production Economics (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aciias:47653

DOI: 10.22004/ag.econ.47653

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