Economic analysis of biosecurity risks within the WA grain supply network from farm to port

The Economics of Phosphine Resistance in Grain Network Hoda Ragab, Rohan Sadler, Ben White

School of Agriculture and Resource Economics, UWA

Phosphine • Total Australian grain exports worth more than A$ 5 billion annually.

• Australia depends heavily on phosphine I HATE PH3 fumigation against stored-grain pests.

• Why phosphine?

– – – – – –

inexpensive easy to apply suits multiple commodities effective against a wide range of insects environmentally benign residue free.

The Problem • High level phosphine resistance in Eastern Australia since 1997.

• Example: strong resistance to phosphine in Rhyzopertha dominica is controlled by two genes.

• Since 2007, strong resistance has been detected on two farms in the northern and central agricultural regions of WA. • Emergence of resistance: – inappropriate dosages/timing of phosphine.

– ineffective storage facilities (unsealed bins).

Research Objective Overview

Evaluate the expected additional cost of managing phosphine resistance of stored-grain pests within a grain network.

Area of Study: Kwinana Region (WA) • The Kwinana port

is

the primary grain export facility in WA. •Opened in 1976.

• Storage capacity exceeds one million tonnes.

• Receives grain from rail and road at 4000 tph and loads grain to ships at 5000 tph.

Why Kwinana Region?

Breakdown of bulk wheat export volume by loading port

Research Methodology Modelling Extra Cost of phosphine Resistance in Grain Network

Mathematical Linear Programming in GAMS • A transport model to predict:  farmers moving grain to receivalsites then to port over 2 time steps. When & where farmers/CBH store and fumigate grain.

• All transport, handling, storage and biosecurity costs within grain network.

Interaction

Monte – Carlo Simulations in R-Statistics • Pests’ phosphine resistance is represented as number of alive pests/ outbreaks per year.

• Outbreaks assigned randomly to any of 5877 farms.

• Comparison between impacts of various inputs/variables.

Phosphine Resistance Context • The problem of phosphine resistance typically starts at a farm.

• A single resistance ‘outbreak’ can spread to neighbouring farms, and eventually the whole grain network, through flight of the beetle.

• The average dispersal distance (jump-diffusion capability) of recaptured R. dominica is approx. 380.4 ± 10.5 m per year (Ching’oma, 2006).

Model overview: Jump Diffusion Capability of an Outbreak within Grain Network

3

Phosphine Resistance: Model Parameters • Expected number of resistance outbreaks (0 – 1500 / year)

• A stiffness penalty cost (a multiplier of 1.25 – 4 times the normal grain handling cost)

• Time period of 20 years.

• A rate of spread of the outbreak (0.1 - 5 km/year)

Results: Iso-Cost Curves of Phosphine Resistance Model for the Kwinana Region

5

Costs: AUD Millions / 20th year

4 3

40

1

2

35

20

15 10 0

30

25

0

Rate of Spread (km/yr)

44

50

100

150

Number of Outbreaks

200

Summary of Results Cost/t/year

Sealed & aerated bin

Unsealed bin

Fixed Cost

$ 7.7*

$ 5.69*

Labour Cost

$ 0.5

$ 0.5

Phosphine Resistance Extra ~ $ 0.44 Cost

$ 8.8

Total Costs

$ 8.64

$ 14.99

Cost of Grain-Rejection

~$0

$$$$$$$$

* Source of Data: Taylor, 2009

Difference = $ 6.35/t/year

Conclusions Phosphine Resistance Model • Single point sources of phosphine resistance increase regional biosecurity costs of a grain supply network.

• Significant extra cost depends on number of outbreaks within the system ($5/t/year). Costs are more sensitive to rate of spread ($8.8/t/year).

• Investment in high quality storage facilities is one option to maintain the biosecurity of the grain network, preserving grain quality and trade status.

For more information, please email: hoda.ragab@gmail.com