The Economic Impact of Weeds in Australia

Abstract

Weeds have a wide variety of impacts on society, the environment and the economy. The economic impacts are usually losses and these can be measured as costs of control, decreases in yields, and reductions in economic surplus. In this paper, we attempt to estimate these economic effects of weeds in Australia. The impacts of weeds on agriculture were calculated through all three measures. But due to lack of data, the impacts of weeds on natural environments, other public land, and Indigenous land, could only be measured as the costs of control. Weeds reduce agricultural output, and so decrease farm income and increase the cost of food to consumers. The combined annual loss to farmers and consumers in 2001-02 was estimated to lie between $3442 m and $4420 m, and to average $3927 m. About 80 per cent of this annual loss falls on farmers and 20 per cent on consumers. The annual loss of $3927 m is one half of one percent of gross domestic product and 14 per cent of the value added by agriculture to the economy. These impacts in agriculture were calculated as the change in farm income and the cost of food between the current with-weeds situation and a without-weeds scenario. The difference is the maximum benefit that could be achieved by reducing the weed population, so it represents the size and national significance of the current problem. This kind of impact estimate, and information on how the loss is distributed across sectors of the economy and across industries, is a benchmark for policy and a starting point for the decision-making process. Weeds attract at least $116.4 m of government expenditure on control, surveillance and other management activities. Of this total, $19.6 m is the expenditure on natural environments by National Parks and Wildlife Services and the National Heritage Trust. Expenditure by four of the state and territory services has increased over the last four years. Of the total, $80.8 m is expenditure by other government agencies on control, inspection, research, and extension. Data on the distribution of weeds in natural environments were not available, so the value of the decrease in outputs in natural environments due to weeds could not be estimated.