International Plant Health Risk Analysis Workshop Niagara Falls, Canada, 24 - 28 October 2005

1. A Stochastic Bioeconomic Model to Demonstrate the Benefits of Pest ExclusionThe Case of the Varroa Bee Mite International Plant Health Risk Analysis WorkshopNiagara Falls, Canada, 24 - 28 October 2005 David Cook

2. 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

3. 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)

4. 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. S. Bauer, ARS/USDA D. Anderson, CSIRO Entomology

5. 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.

6. The Model Total area summed across all satellites increases until reaching Amax, at which point it remains constant NATIONAL BOUNDARY New satellite 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 Established population

7. 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.

8. 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.

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

10. Cost/time Relationship Over 30 Years

11. Pollination Benefits by Industry

12. 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

13. 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.

14. 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