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Estimating the economic damage and treatment cost of basal stem rot striking the Malaysian oil palms

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  • Olaniyi, Oladokun Nafiu
  • Szulczyk, Kenneth R.

Abstract

Oil palm, a vital crop, contributes significantly to the economic and social development of Malaysia. However, a pathogen such as the Basal Stem Rot (BSR) poses a significant threat to the oil palm that would lead to significant economic losses. Motivated by this development, we utilize a partial equilibrium model of Malaysian agriculture to measure the level of economic damage in terms of real agricultural output, agricultural prices, and agricultural employment. As expected, a slow-moving Ganoderma boninense can devastate the oil palms in Malaysia by 2040 with a loss of 860,610 ha of mature oil palms that result in significant losses of real agricultural output and employment while inducing higher agricultural prices. Furthermore, BSR leads to further deforestation as landowners replace the BSR infected land by clearing rainforest. At last, paying an annual treatment cost to maintain healthy oil palms lead to a partial recovery from the economic damage of BSR. Although real output, agricultural prices, and agricultural employment improve while deforestation slows, the economic measures do not return to their baseline levels with an absence of BSR.

Suggested Citation

  • Olaniyi, Oladokun Nafiu & Szulczyk, Kenneth R., 2020. "Estimating the economic damage and treatment cost of basal stem rot striking the Malaysian oil palms," Forest Policy and Economics, Elsevier, vol. 116(C).
    • Handle: RePEc:eee:forpol:v:116:y:2020:i:c:s1389934119302503
    DOI: 10.1016/j.forpol.2020.102163
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    Cited by:

    1. Szulczyk, Kenneth R. & Badeeb, Ramez Abubakr, 2022. "Nontraditional sources for biodiesel production in Malaysia: The economic evaluation of hemp, jatropha, and kenaf biodiesel," Renewable Energy, Elsevier, vol. 192(C), pages 759-768.
    2. Olaniyi, Oladokun Nafiu & Szulczyk, Kenneth R., 2022. "Estimating the economic impact of the white root rot disease on the Malaysian rubber plantations," Forest Policy and Economics, Elsevier, vol. 138(C).
    3. Szulczyk, Kenneth R. & Tan, Yeng-May, 2022. "Economic feasibility and sustainability of commercial bioethanol from microalgal biomass: The case of Malaysia," Energy, Elsevier, vol. 253(C).
    4. Kenneth R. Szulczyk, 2023. "Estimating the economic costs and mitigation of rice blast infecting the Malaysian paddy fields," SN Business & Economics, Springer, vol. 3(1), pages 1-21, January.
    5. Szulczyk, Kenneth R. & Ziaei, Sayyed Mahdi & Zhang, Changyong, 2021. "Environmental ramifications and economic viability of bioethanol production in Malaysia," Renewable Energy, Elsevier, vol. 172(C), pages 780-788.

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