Biosecurity in agriculture: an economic analysis of coexistence of professional and hobby production

Ceddia, M. G., Heikkila, J. and Peltola, J. (2008) Biosecurity in agriculture: an economic analysis of coexistence of professional and hobby production. Australian Journal of Agricultural and Resource Economics, 52 (4). pp. 453-470. ISSN 1364-985X doi: 10.1111/j.1467-8489.2008.00438.x

Abstract/Summary

One component of biosecurity is protection against invasive alien species, which are one of the most important threats worldwide to native biodiversity and economic profitability in various sectors, including agriculture. However, agricultural producers are not homogeneous. They may have different objectives and priorities, use different technologies, and occupy heterogeneous parcels of land. If the producers differ in terms of their attitude towards invasive pests and the damages they cause, there are probably external effects in the form of pest spread impacts and subsequent damages caused. We study such impacts in the case of two producer types: profit-seeking professional producers and utility-seeking hobby producers. We show that the hobby producer, having first set a breeding ground for the pest, under-invests in pest control. We also discuss potential policy instruments to correct this market failure and highlight the importance of considering different stakeholders and their heterogeneous incentives when designing policies to control invasive alien species.