Potential economic impacts of an avocado weevil infestation in California

76 Pages·1993·8 MB·English

by  Evangelou, Phylo

Historic, Archive Document
Do not assume content reflects current
scientific knowledge, policies, or practices.
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Potential Economic Impacts of an
Avocado Weevil Infestation in California
August 1993
Phylo Evangelou, Philip Kemere, and Charles E. Miller
Policy and Program Development
Animal and Plant Health Inspection Service
U.S. Department of Agriculture
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Table of Contents
Page
Executive Summary
Table of Contents
1? Introduction
Purpose
Approach
Outline of the Report
i. U.S. Avocado Production and Pests of Concern
U.S. Avocado Production
Avocado Pests of Concern
3. Infestation Assumptions and Expected Impacts for
Producers and Exporters
The Infestation Scenario
Expected Effects of Infestation for Producers
Expected Effects of Infestation on U.S. Exports
ae Social Losses for U.S. Avocado Producers and Consumers
The Analytic Model
Graphical Analysis
Algebraic Analysis
Specification of Price Elasticities
Estimated Results
Sensitivity of the Results
Appendix 1 Exotic Pests of Concern
Appendix 2 Consumer and Producer Surplus
Appendix 3 Data Used in the Estimation of the Price Elasticity of
Supply for Avocado 27
Appendix 4 Data Used in the Estimation of the Price Elasticity of
28
Demand for Avocado
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Appendix 5 Effects of Increased Avocado Production Costs and
Decreased Yield, Assuming Various Elasticities of Supply ag
Appendix 6 Effects of Increased Avocado Production Costs and
Decreased Yield, Assuming Various Elasticities of Demand 30
Selected References 31
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ie Introduction
Purpose
The purpose of this report is to estimate economic impacts that would result from infestation
of California’s avocado groves by any of a set of exotic fruit and seed pests. Copturus
aguacatae, a stem weevil which has been found repeatedly in intercepted avocados being
smuggled from Mexico, and a seed weevil, Conotrachelus aguacatae, are representative of
the pests of concern. U.S. avocado growers currently benefit from a comparatively pest-free
environment, due in large part to inspection and quarantine regulations that have helped
prevent such pests from entering the country. If entry were to occur, economic impacts
would depend upon the cost and effectiveness of actions taken to control ensuing losses. In
this study, potential impacts of infestation for U.S. avocado producers, consumers, and
exporters are evaluated.
Approach
Consequences of infestation are examined for avocado producers and exporters, and at the
broader social level of U.S. consumers and the avocado industry overall. The analysis is
limited to expected effects, once infestation has taken place. Risk of pest entry and
likelihood of colonization are not considered in the estimation of economic impacts.
The scenario developed for the analysis contains three basic assumptions:
° All areas of production in California would be infested, and
eradication would not be possible.
° Growers would apply pesticides to minimize avocado losses, but
yields would still be significantly reduced by the infestation.
e Pesticide application would affect natural, biological
mechanisms that control indigenous pest populations,
necessitating additional chemical treatments.
Direct impacts of infestation at the producer level are estimated in terms of (i) increased
production costs due to pesticide treatments required to minimize fruit loss, and (ii)
production losses that would result, despite the additional pesticide applications. U.S.
avocado exporters could also be directly affected, if the infestation resulted in a loss of
export markets. The likelihood of a contraction of exports as a result of phytosanitary
restrictions imposed by importing countries is evaluated.
Social, or welfare, losses are estimated in order to examine the full dimensions of infestation
for producers and consumers. Treatment costs and reduced yields would decrease the
domestic supply of avocados, resulting in an increase in the market price. Buyers would
likely reduce their avocado purchases in response to the price rise. A new price-quantity
equilibrium would be determined, with associated losses in producer and consumer surpluses.
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