Estimating the economic contribution of paraquat Presentation for reassessment hearing September 2019
Estimation factors Baseline economic impact expressed in terms of crop contribution to GDP • attributable to paraquat Three components, as follows: • Herbicide Share of paraquat Crop contribution Crop contribution contribution to X in NZ herbicide use = to GDP attributable X to GDP crop yield (%) (%) to paraquat From Manktelow From Gianessi From NZIER (2015) (2005) and interviews (2007) adapted for NZ conditions www.thinkSapere.com 2
Baseline estimate is $39m-$75m per annum Industry growth rates used to derive 2017 total value at risk, • dominated by clover and kumara Paraquat contribution to GDP by crop Crop HIGH LOW Apples $1,539,643 $484,729 Brassicas (cabbage, broccoli, cauliflower) $1,301,712 $409,820 Clover (seed crop) $44,627,873 $14,050,275 Green beans $127,249 $40,062 Kumara $12,041,355 $12,041,355 Lettuce $36,196 $11,396 Lucerne $10,831,136 $10,831,136 Onions $603,303 $189,939 Plantain (seed crop) $849,339 $267,399 Pears $244,815 $77,076 Pea (seed crop) $1,059,759 $333,646 Potatoes $1,208,909 $380,603 Spinach and silverbeet $30,990 $9,757 Stone fruit $136,978 $43,125 Strawberries $62,176 $19,575 Sweet corn $125,685 $39,570 TOTAL $74,827,118 $39,229,462 www.thinkSapere.com 3
Restricted scenario based largely on application rates and frequency www.thinkSapere.com 4
GDP reduction most material at 300 g a.i/ha, mainly due to clover $80 $70 GDP contribution (attributable to paraquat) at risk (NZD million) $60 $50 $40 $30 $20 $10 $0 600 500 400 300 200 100 Maximum paraquat concentration allowed (g a.i./ha) High use Low use www.thinkSapere.com 5
Final results • A ban on paraquat use would result in a minimum of $39 million and a maximum of $75 million of annual GDP loss per year (less than one half of one per cent of annual GDP nationally) • Restricting the application rate of paraquat to: • 300 grams of active ingredient per hectare (g a.i./ha) would put up to $72 million in GDP at risk annually; • 400 g a.i/ha would put up to $25 million in GDP at risk annually; • 600 a a.i/ha would put up to $0.14 million in GDP at risk annually www.thinkSapere.com 6
Supplementary comments • An estimation process, relying on key assumptions and translation of inputs from overseas in the absence of ‘hard data’ • Initial estimates were revised upward by between $9 million and $15 million (from between $30 million and $60 million) following submissions • Results were largely insensitive to alternative parameters www.thinkSapere.com 7
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