An Economic Evaluation of the Benefits from Import Clearance Activities in Western Australia

Quarantine trade restrictions enforced on agricultural commodities are both a safety measure and a form of subsidy to local producers. With appropriate strategies in place the risk posed to domestic production systems from exotic pests and diseases is reduced. This often means importers of agricultural commodities are effectively taxed, with negative effects on consumer welfare. Hence, analysis of quarantine policy decisions involves a comparison of notional production gains against social welfare loss. Given the large variety of agricultural industries and the virtually endless list of exotic pests deemed as “threatening” to domestic industries, there is a continuum of problems of this type. In some instances the effects of quarantine policies will be felt mainly by producers, while in others it may be consumers, or a blend of the two. In the case of the mango industry in WA, both producers and consumers are affected. A quantitative assessment of the benefits and costs of Agriculture Western Australia’s import clearance activities governing mango importation is provided here, demonstrating an appropriate framework for the analysis of these issues following on from James and Anderson (1998). Studies of this nature will be of great importance to policy makers in justifying investments in specific quarantine activities given the recommendations of the Nairne Review and the memorandum of understanding between the states and territories of Australia to abide by these guidelines.