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Linking Risk and Economic Assessments in the Analysis of Plant Pest Regulations: The Case of U.S. Imports of Mexican Avocados

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  • Peterson, Everett B.
  • Orden, David

Abstract

This study compares the effects of importing fresh Mexican Hass avocados into the United States under three scenarios for mitigating pest risks. The analysis finds that Scenario 1, adherence to the U.S. phytosanitary rule of November 2004—which removed all seasonal and geographic restrictions on Mexican avocados, while maintaining existing compliance procedures in Mexico—leads to low pest risks for U.S. producers and an estimated annual U.S. welfare gain of $72 million. In Scenario 2, if compliance measures specific to fruit fly control are eliminated along with seasonal and geographic restrictions, pest risks for U.S. producers remain low and there is an additional gain in net U.S. welfare of $1.7 million. Results for Scenario 3, which eliminates all control measures in Mexico, depends on the level of pest-risk estimated. With average risk, there is a gain in net U.S. welfare of about $8.5 million compared with eliminating only seasonal and geographic restrictions, but U.S. producers incur significant pest control costs. With maximum pest-risk estimates, the net gain in U.S. welfare is $16.2 million less than if only geographic and seasonal restrictions are eliminated, with larger pest control costs for U.S. producers and lower consumer welfare gains due to pest-related losses of U.S. avocados.
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Suggested Citation

  • Peterson, Everett B. & Orden, David, 2006. "Linking Risk and Economic Assessments in the Analysis of Plant Pest Regulations: The Case of U.S. Imports of Mexican Avocados," 2006 Annual meeting, July 23-26, Long Beach, CA 21339, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21339
    DOI: 10.22004/ag.econ.21339
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    References listed on IDEAS

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    Cited by:

    1. Chemnitz, Christine & Grethe, Harald & Kleinwechter, Ulrich, 2007. "Quality Standards for Food Products - A Particular Burden for Small Producers in Developing Countries?," 106th Seminar, October 25-27, 2007, Montpellier, France 7926, European Association of Agricultural Economists.
    2. David Orden & Donna Roberts, 2007. "Food regulation and trade under the WTO: ten years in perspective," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 103-118, December.
    3. Ferrier, Peyton Michael, 2008. "Illicit Agricultural Trade," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-15.
    4. Deodhar, Satish Y. & Rastogi, Siddhartha K., 2008. "Indo-US Trade in Wheat and Mango: A Game-Theoretic Approach to SPS Standards," IIMA Working Papers WP2008-03-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    5. Linda Calvin & Barry Krissoff & William Foster, 2008. "Measuring the Costs and Trade Effects of Phytosanitary Protocols: A U.S.–Japanese Apple Example," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 120-135.
    6. Ferrier, Peyton, 2010. "Irradiation as a quarantine treatment," Food Policy, Elsevier, vol. 35(6), pages 548-555, December.
    7. Cook, David C., 2008. "Benefit cost analysis of an import access request," Food Policy, Elsevier, vol. 33(3), pages 277-285, June.
    8. Rastogi, Siddhartha, 2010. "Trade Standards for Welfare Maximization: A Case of Indo-US Trade in Wheat and Mango," Conference papers 330246, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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