An Economic Analysis of GRDC Investment in Minor Use Chemicals

The Without Scenario
The key assumption shaping what is a hypothetical scenario is a restrictive one of no
investment by GRDC in the MUP from 1998 to 2010. (Recall the logic is that an
evaluation can only be done by comparing the outcome with an investment against
the outcome in the absence of the investment). Therefore the industries that did
benefit from the MUP would, at least initially simply have continued on the trajectory
they were on in 1998. The Without Scenario will therefore need to define a
trajectory over the period from 1998 to 2010 taking into account trends and drivers
in the industry operating environment over that period including community
pressures.
The following clarifies the basis for estimating benefits. The Without Scenario in this
section is defined in relation to the actual. There will be discussion for example of
increased disease losses in relation to actual losses incurred. However when benefits
are defined, losses will be reversed in sign and discussed in terms of losses avoided
as the benefit.
The project proposal (GRDC 1998) for the first MUP, JAY1, defines relevant aspects
of the base-line situation in 1998. Pulse Australia had been funded by GRDC in 1996
to review ‘off-label’ use of pesticides in the pulse industry. The pulse industry was
emerging as a major player on world markets which were increasingly concerned
with residue levels. The review indicated that:
“farmers producing pulse crops did not have access to a wide range of registered
pesticides, and as a consequence were forced to use unregistered pesticides if they
are to maintain profitable and sustainable production. This has implications for the
quality assurance programs being promoted by the pulse industry In addition the
authorities responsible for the sale of pesticides in Victoria had threatened legal
action against pulse growers who have used unregistered pesticides on their crops.”
The Pulse Australia review raised three trends relevant to the Without Scenario:
1. the increasing dependence on unregistered chemicals,
2. the implications for QA programs, and
3. the legal implications from using unregistered chemicals.
Note unregistered chemicals include chemicals which may be registered for similar
situations or similar crops but the intended use is not specifically provided for on the
product label. Minor use permits authorise specific off-label uses. In the following,
the term “unregistered” will include the absence of a minor use permit as well unless
specifically mentioned otherwise.
The AATSE (2002) review of pesticides noted the 40 percent increase in pesticide
increase for all crops from 1996 to 1999, and earlier dramatic examples of residue
detections on export markets. Industry and community concerns were becoming
major drivers of change in the range of regulatory measures used for pesticide
control. The AATSE review of off-label use quoted a submission observing that “asof-right”
use as in Victoria “placed growers in Victoria in the unenviable position of
needing to second guess complex matters.” On the other hand, the permits legalise
what would have been illegal under the varying legislative requirements of the
States. Also quoted was an NFF submission commenting that on the basis that they
considered that the permit system at that time had a reduced risk assessment
compared with registration, therefore “the potential for environmental damage and
untenable residue in produce is increased.” Following a number of studies of national
pesticide issues APVMA (2003) summarised as follows:
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