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Economic Impacts of the U. S. Soybean Aphid Infestation: A Multi-Regional Competitive Dynamic Analysis

Published online by Cambridge University Press:  15 September 2016

C. S. Kim ,
Glenn Schaible ,
Lynn Garrett ,
Ruben Lubowski  and
Donna Lee
C. S. Kim
Affiliation:
Economic Research Service, U. S. Department of Agriculture, in Washington, D. C.
Glenn Schaible
Affiliation:
Economic Research Service, U. S. Department of Agriculture, in Washington, D. C.
Lynn Garrett
Affiliation:
Center for Plant Health Science & Technology, U. S. Department of Agriculture, in Washington, D. C.
Ruben Lubowski
Affiliation:
Forest Carbon Economics Fellow at the Environmental Defense Fund in Washington, D. C.
Donna Lee
Affiliation:
Entrix, Inc., in Gainesville, Florida
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Abstract

We estimated the economic benefits resulting from controlling soybean aphid infestation by using a multi-regional competitive dynamic equilibrium model. Results indicate that the reduction of soybean production resulting from a soybean aphid infestation is largely absorbed by reducing soybean exports, due to the higher price elasticity of export demand compared to domestic demand. Producer benefits resulting from controlling soybean aphids would increase by between $949 million and $1.623 billion in ten years under various scenarios. Results also suggest that it is economically more efficient to control soybean aphids when the rate of intrinsic growth is relatively lower, the supply price elasticity of soybean acreage is relatively more elastic, and insecticide treatment costs per acre are lower. However, if the discovery of the gene Rag-1 (TF04048) leads to new cultivars that withstand the soybean aphid, our estimates will overestimate the actual damages. Even so, our analysis demonstrates that it is critical to control soybean aphids early in their infestation cycle to avoid a rapid increase in damages.

Keywords

soybean aphidinvasive speciesproducer surplusconsumer surplusRag-1
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 37 , Issue 2 , October 2008 , pp. 227 - 242
Copyright
Copyright © 2008 Northeastern Agricultural and Resource Economics Association 

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