Putting a price on the value of biosecurity
5 March 2014
The value of Australia's biosecurity system to farmers is in the spotlight at the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) 2014 Outlook conference today.
With gross value of farm production forecast at $50.5 billion in 2014–15 and exports forecast valued at $38.4 billion, Australia's pest and disease status is directly linked to market access and farmgate returns.
Research presented by ABARES' Chief Economist Michael Harris takes a fresh approach to determining the value of the biosecurity at the farmgate.
“Our analysis shows that an outbreak of Foot and Mouth Disease (FMD) would cost an estimated $62 per hectare for cattle producers and $172 per hectare for sheep producers,” Mr Harris said.
“We've taken that a step further and looked at how the current management of the biosecurity system has reduced the risk of an incursion and put a value on that.
“That work shows that expected losses avoided per hectare amount to $10 per hectare for cattle producers and $26 per hectare for sheep producers.
“Extending this to a per farm analysis, allowing for different farm types, we find expected losses avoided per farm range from $3,000 each year for cropping specialists to $11,000 each year for pastoral sheep-beef producers. These numbers increase when other pests are considered.
“These calculations of expected losses avoided are akin to a hypothetical insurance premium and show how biosecurity adds value by reducing risk for our producers.”
Chair of the session, Department of Agriculture Deputy Secretary, Rona Mellor, said Australia's biosecurity system was the foundation of access to many of our international markets.
“The system is designed to safeguard our agricultural industries and environment from pest and disease risks,” Ms Mellor said.
“Changes to our biosecurity status impact on our productivity, profitability - and our ability to export.
“Part of ensuring our biosecurity system continues to benefit our farmers is to make sure our efforts are appropriately targeted so we can have confidence we're looking in the right places for the greatest risks.”
The Centre of Excellence for Biosecurity Risk Analysis, Deputy Director, Andrew Robinson, said there were various intelligence-based approaches to targeting biosecurity risks for Australian agriculture in a cost-effective manner.
Reid Fruit's Lucy Gregg said much of her Tasmanian company's competitive advantage came from the state's freedom from pests and diseases present in other parts of Australia.
“These regional differences are critical to market our quality product - and to our continued market access,” Mr Robinson said.
“More than 20 countries receive about 1000 tonnes of Tasmanian cherries each season.”