EconSearch Completed Project

Project: International Market Access Impacts of Branched Broomrape Contamination: a Risk Assessment and Scenario Analysis (2010)

Client: Branched Broomrape Unit, PIRSA

Summary: Cost benefit analyses of the Branched Broomrape Eradication Program have been undertaken by Milne (2000) and EconSearch (2003, 2007, 2008 and 2010). No attempt was made in these studies to quantify the value of potential market access losses that may result from contamination of exported commodities with branched broomrape.

Whilst branched broomrape contamination is a threat to both interstate and international markets, the focus of this study was the latter. The broad objectives were as follows.

  • Construct a risk assessment matrix (i.e. probability x consequence) for commodities exported to international markets with zero tolerance to branched broomrape contamination.
  • Develop a hypothetical broomrape contamination scenario based on the results of the risk assessment matrix and the existence of a precedent for this type of market disruption in international trade.
  • Quantify the likely market access losses for the hypothetical scenario through construction of a supply/demand model for the relevant commodity and market.

The risk of broomrape contamination of international exports was found to be very high, in relative terms, for three commodity groups.

  • pasture seeds
  • hay and chaff
  • other forage products

Based on the results of the risk assessment matrix, advice provided to the consultants by the project advisory group and the existence of relevant precedents in international trade, the hypothetical market disruption scenario which was judged to be the most suitable for further analysis was branched broomrape contamination of hay and chaff exports to Japan.

The net loss of economic surplus attributable to a 12 month closure of this market for export hay was estimated to be approximately $71m (mean value: with 90 per cent probability that the value of these market access losses will be in the range from $48m to $92m).

Report: To download the report click here.