An Economic Analysis of GRDC Investment in Minor Use Chemicals

of approaches to regulation). In the absence of MUP, there would also have been
more resistant varieties, increased research, and grower adaptations on other means
of disease control and on alternative break crops. The assumptions on possibilities in
the absence of MUP illustrate the importance of carefully considering the
counterfactual in investment analysis.
The majority of the benefits assessed were from reduced losses achieved by a wider
range of chemicals available for control of disease. But there were also considered to
be substantial benefits from an increased area of pulses. The key benefits are their
greater profitability in sustainable rotations including their value as a break crop.
The increased range of options that MUP provided for disease control contributed to
the rapid expansion of chickpeas particularly in the GRDC Northern Region.
The evaluation did consider in a qualitative way other possible benefits of MUP
relating to food safety and to the environment. On balance, notwithstanding the
absence of data on the environment, the effects are considered favourable from a
greater compliance with good agricultural practice implicit in following label
requirements for application of pesticides. Offsetting that position is the likely
increased use of any pesticide that is more profitable. In relation to food safety and
MUP it should be stated that Australian grain and products derived from grain have
an exceptional reputation. But any exceedance for a particular crop has increasing
potential for specific and collateral damage. Consumers may well be more concerned
on food quality issues; but they are also increasingly subject to a wider range of poor
quality information on incidents.
There was a degree of confidence in the assumptions but only in a qualitative sense.
The benefits were assessed as an increased net present value of close to $40 million
from the investment of $3.2 million, two thirds contributed by GRDC. The benefit
cost ratio of over 13 to one showed the value a small investment can achieve by
responding to regulatory requirements, in this case those pertaining to permits for
registered chemicals.
Acknowledgments
Kevin Bodnaruk, (Project Supervisor, AKC Projects), West Pymble, NSW.
Trevor Bray, Industry Development Manager, South East, Pulse Australia, Yenda,
NSW.
John Brennan, Coolamaine Economic Research, Castlemaine, Victoria.
Hugh Brier, Senior Entomologist DEEDI, Kingaroy, Queensland
Gordon Cumming, Industry Development Manager, Northern Region, Pulse Australia,
Highfields, Queensland
Richard Daniel, Chief Executive Officer NGA, Toowoomba, Queensland.
Greg Giblett, Consultant, Tamworth, NSW.
Gavin Gibson, Chief Executive Officer, Pulse Australia, Bungwahl, NSW.
Wayne Hawthorne, Industry Development Manager South Australia, Pulse Australia
Naracoorte, South Australia
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