Responsibility and
Cost Sharing Options for
Quarantine Plant Health
JK Waage, JD Mumford, AW Leach, JD Knight & MM Quinlan
Centre for Environmental Policy
ImperialCollegeLondon
SilwoodPark Campus
Ascot, Berkshire SL5 7PY
October 2007
Citation:Waage, J.K., Mumford, J.D., Leach, A.W., Knight, J.D., Quinlan, M.M.2007. Responsibility and costsharing options for quarantine plant health.Report to Department for Environment, Food and Rural Affairs, London, United Kingdom. Centre for Environmental Policy, ImperialCollegeLondon, Ascot, United Kingdom. 126pp.
Responsibility and
Cost Sharing Options for
Quarantine Plant Health
JK Waage, JD Mumford, AW Leach, JD Knight & MM Quinlan
Centre for Environmental Policy
ImperialCollegeLondon
SilwoodPark Campus
Ascot, BerkshireSL5 7PY
October 2007
Acronyms and Abbreviations
ADAS...... formerly Agricultural Development and Advisory Service
APHIS...... Animal and Plant Health Inspection Service (USDA)
AQIS...... Australian Quarantine and Inspection Service
BAB...... Bureau de l’Agriculture Britannique
BOPP...... British Ornamental Plant Producers
BPC...... British Potato Council
CAC...... California Avocado Commission
CBA...... Cost benefit analysis
CLA...... CountrysideLand and Business Association
CSL...... Central Science Laboratory
DARD...... Department of Agriculture and Rural Development (Northern Ireland)
Defra...... Department for Environment, Food and Rural Affairs
DNA...... Deoxyribonucleic acid
DIY...... Do it yourself
EAB...... Emerald ash borer
EC...... European Commission
EFSA...... European Food Safety Agency
EMBRAPA...... Empresa Brasileira de Pesquisa Agropecuária (Brazilian Agricultural Research Corporation)
EPP...... Emergency Plant Pest (Australia)
EPPO...... European and Mediterranean Plant Protection Organization
ERAD...... Environment and Rural Affairs Department (Scotland)
EU...... European Union
EurepGAP...... The Global Partnership for Safe and Sustainable Agriculture
FC...... Forestry Commission
HDC ...... Horticultural Development Council
HGCA...... Home-Grown Cereals Authority
HPAI...... Highly Pathogenic Avian Influenza
HTA...... Horticultural Trades Association
ICT...... Information and Computer Technology
IPM...... Integrated Pest Management
ISPM...... International Standard(s) for Phytosanitary Measures
JIGWG...... Joint (Industry/Government) Working Group on Sharing Costs and Responsibilities of Animal Disease
LACORS...... Local Authorities Co-ordinators Regulatory Service
LTO...... Land- en Tuinbouworganisatie Nederland (Agricultural and Horticultural Organisation, The Netherlands)
LVP...... Local Value of Production (Australia)
MAF...... Ministry of Agriculture (New Zealand)
MAFF...... Ministry of Agriculture, Fisheries and Food
MOU...... Memorandum of Understanding
NAO...... National Audit Office
NAV...... Nederlandse Akkerbouw Vakbond (Dutch Union of Arable Farmers)
NFU...... National Farmers Union
NIAB...... National Institute of Agricultural Botany
NMG...... National Emergency Plant Pest Management Group (Australia)
NZ MAF...... New Zealand Ministry of Agriculture Forestry and Fisheries
PBR...... Potato Brown Rot
PCN...... Potato Cyst Nematode
PCR...... Polymerase chain reaction
PHA...... Plant Health Australia
PHD...... Plant Heath Division
PHS...... Plant Health Services (as a general category)
PHSI...... Plant Health and Seeds Inspectorate
PRA...... Pest Risk Analysis
PRR...... Potato Ring Rot
QPH...... Quarantine and plant health
R&D...... Research and development
RHS...... Royal Horticultural Society
RMA...... Risk Management Agency (USDA)
SBS...... Small Business Service (Department of Trade and Industry)
SCPH...... Standing Committee on Plant Health (EU)
UKCPV...... UK Cereal Pathogen Virulence (survey)
USDA...... United States Department of Agriculture
Table of Contents
Executive Summary
Section 1.Introduction...... 3
1.1.Identifying project stakeholders...... 3
1.2.Risk bearers vs risk introducers...... 4
1.3.What pests and diseases?
1.4.Outline of report
Section 2.Pest and Disease Threats – Future Trends...... 8
2.1.Future QPH threats...... 9
2.2.Future threat to food crops
2.3.Future threats to ornamental plants
2.4.Conclusions
Section 3.Current QPH Activities in Government and Industry
3.1.Government contributions to QPH activities
3.2.Industry contributions to QPH activities
3.3.A comparison of QPH investment by industry and government
3.4.A comparison of industry and government QPH perspectives
Section 4.Experience in Other Countries
4.1.USA
4.2.The Netherlands
4.3.Denmark
4.4.Israel
4.5.Brazil
4.6.New Zealand
4.7.Australia
4.8.Cost sharing in animal disease control: UK developments
4.9.Cost sharing in animal disease control: experience in other countries
4.10.Conclusions
Section 5.Cost Sharing Options for Control of QPH Outbreaks
5.1.Model design
5.2.Presentation and impact of options
5.3.Case study: a UK insurance scheme for potato diseases
Section 6.Synthesis of Outbreak Cost Sharing
6.1.Sector complexity
6.2.Private and public benefits of outbreak control
6.3.Distribution of outbreak cost sharing options across sectors
6.4.Industry-led, fund-based schemes
6.5.Cost sharing involving direct government contributions
Section 7.Cooperation in Risk Reduction
7.1.Trends in government investment
7.2.Trends in industry investment
7.3.Cooperation and cost sharing in QPH risk reduction
7.4.The value of outbreak control to risk reduction
Section 8.Summary
8.1.Reduction of QPH risks
8.2.Management of QPH outbreaks
Section 9.References.
Appendix 1.Financial Resources
Appendix 2.Case Study: a Mutual Insurance Scheme for Potato Ring Rot and
Potato Brown Rot in the UK based on the Netherlands Potatopol Scheme
Appendix 3.Models for Cost Sharing in Risk Reduction
Appendix 4.Contacts
Executive Summary
- This study considers options for cost sharing in quarantine plant health (QPH) with respect to (1) control of outbreaks of plant pests and diseases and (2) risk reduction measures, including risk assessment, surveillance, research and others. We consider only costsharing amongst “risk bearers”, that is, the government and the industry that pay for and benefit from QPH activity directly.
- QPH threats are diverse and probably growing. In future the greatest will probably be from (1) well anticipated pests and diseases of food crops, particularly those affecting trade, and (2) largely unanticipated pests of ornamental plants which pose secondary, possibly major threats to native species and local ecosystems. The latter group of threats will be the most challenging because they are poorly known and their management crosses agricultural and other sectors.
- Government departments contribute about £12.4million per annum to QPH activity, mostly in the area of risk reduction. Industry makes a smaller contribution, in financial terms, to the costs of outbreak control, often through in-kind inputs of labour, and through lost crop value. In some businesses and sectors, however, industry also makes significant contributions in several areas of risk reduction.
- The UK industry presently has no significant levy-based or insurance-based cost sharing schemes for QPH, nor is there much interest in this within industry, or amongst potential scheme managers, such as levy boards or insurance companies. Government is taking steps to engage and support industry stakeholders in QPH decisions making, but this is at an early stage.
- Around the world, there are a wide range of examples of both levy- and insurance-based cost sharing schemes, and systems where government and industry share the costs of outbreak control, for examplethrough government compensation. It is common that costsharing is treated separately for each sector or risk on an ad hoc basis: industry-wide contributory schemes often end up being highly complex mechanisms for what is effectively a government-support activity. However, new Australasian models for costsharing based on pre-agreed benefits to risk bearers deserve attention.These models include an integrated biosecurity planning process that also gives stakeholders clear responsibilities.
- To allow for comparison of options, a simulation model for QPH costsharing was developed and is demonstrated. This can be used as a potential tool for additional option development. Four broad options are modelled.
- In a UK context, we suggest that levy- and insurance-based cost sharing options for outbreak control will be most successful in sectors of the industry which are not complex, having a similar producer base, few crops and few key pests and diseases. Sugar beet, potatoes and some other food crop production may fit this category, and we model an indicative potato insurance scheme based on a Dutch system. However, these schemes would probably need some government support for initiation and/or maintenance.
- Where industry is complex and the direct benefits of QPH outbreak control to businesses are less, we suggest that it will be very difficult to establish levy- or insurance-based schemes. This applies to some horticultural production, particularly ornamentals, and the broader “environmental sector” which makes ornamental plantings, where QPH threats have an environmental, public good component.Here, options involving government contributions to outbreak control costs may be the best way to ensure compliance and protection of public good.
- With respect to risk reduction, there is considerable scope for greater industry contribution in costsharing. We illustrate the value to industry of investment in risk reduction. Industry- or sector-wide initiatives involving voluntary codes of conduct and collective research funding are important to successful establishment of government–industry costsharing options. Options for greater industry contribution to risk reduction may be balanced against government contribution to outbreak control, reducing the asymmetry of the current system.
- In conclusion, a range of QPH costsharing options is presented for consideration. Our analysis of these suggests that there is probably no single option that will be appropriate across the diversity of industry sectors and threats. However, there are sectors where levy- and insurance-based schemes may be attractive to industry, with government support, and other sectors where government and industry may make valuable, prior agreements on responsibility and cost sharing in outbreak control and risk reduction. Greater cooperation between government and industry in development of QPH policy and decision making will facilitate developing of costsharing options, which can be linked to clear responsibilities and expectations for each stakeholder.
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© 2008 Horticultural Development Council
Section 1.Introduction
The objectives of this project are to develop and evaluate options for sharing responsibilities and costs of quarantine plant health[1](QPH) threats to the UK. It examines two particular opportunities: to share risk reduction efforts, such as risk assessment and research, and to share the costs of controlling outbreaks of quarantine pests and diseases.
Particular impetus to consider costsharing options has come from recent experience of outbreaks of diseases such as potato ring rot, Clavibacter michiganensis subsp. sepedonicus,(PRR) and Phytophthora ramorum on ornamentals. A current industry/government initiative on sharing responsibility and cost of exotic animal diseases (JIGWG, 2006) also creates a timely opportunity to compare ideas across sectors.
In the course of our study, we discovered that a number of governments were currently reviewing their arrangements, including France, the USA, New Zealand and Mexico, while Australia had recently implemented innovative and comprehensive costsharing schemes across plant and animal health. Our project sponsors may wish to follow up on these initiatives as they develop.
1.1.Identifying project stakeholders
In this project, we have identified government and industry as principal stakeholders and divided the industry into a number of sectors, as described below. Government organisations discussed are those with budgetary allocations for QPH, including Defra (acting on behalf of England and the Welsh Assembly), the Scottish Executive and the Forestry Commission (FC). While forest trees are not within the scope of this project, Forest Research, as part of the FC, has been involved in pests and diseases of ornamentals which threaten natural habitats, such as P. ramorum.
While it is easy to identify traditional agricultural industry as including sectors for production of food crops like wheat, potatoes, vegetables and fruit, it is more difficult to delineate the limits of the industry involved in the production and marketing of horticultural plants for ornamental and amenity use. Here, the industry may involve nurseries, managers of private gardens and estates and local authorities, all of whom have responsibilities for controlling exotic pests and diseases, as has become clear in the recent outbreaks of P. ramorum. Further, quarantine pests and diseases like P. ramorum may affect natural ecosystems, whose welfare is the business of an even larger community of land owners and managers.
We settled on an inclusive definition of the industry as “people and organisations who may be responsible for controlling new quarantine pest or disease outbreaks on their properties and who would be beneficiaries of such action as well”. Based on this, we identified four sectors on the basis of similarities in crops, production systems and/or QPH threats. A field crop sector includes producers of cereals, potatoes, sugar beet and other combinable crops. The horticultural industry includes producers of vegetables, tree and bush fruit and ornamental plants for garden and amenity planting. We separate this into two sectors, a horticultural food crop sector and an ornamental sector. Finally we recognise an environment sector, which includes businesses and organisations which are not traditionally agricultural, but which are often responsible for controlling QPH threats, largely those originating on ornamental and amenity plants. This includes the landscaping industry, botanic gardens and estates.
1.2.Risk bearers vs risk introducers
In this project, we distinguish “risk bearers”, with whom we are concerned, from “risk introducers” who are people or organisations who introduce new QPH threats into the UK.The former benefit directly from exclusion of these pests, while the latter bear no such risk and derive no benefit. While risk introducers may sometimes be risk bearers as well, there are many who are not. For instance, Asian longhorned beetles,(Anoplophora glabripennis),may be introduced into the UK by nurseries, who are project stakeholders, or in wood packing material by a wide range of industries that are not.
In our study of costsharing systems around the world, we found that governments consistently focus on risk bearers. Government regulation, including prosecution and fines, are instruments used to deal with identifiable risk introducers who breach quarantine regulations.Fines serve as a deterrent, but are not likely to be an effective form of cost recovery, as it may be impossible to collect sufficient payment from small, often individual, risk introducers to fully cover potentially large QPH consequences. Regulations and standards may only practically generate partial recovery of compensatory fines or charges from those who break the rules.For issues of QPH, however, it is very difficult to apply the “polluter pays” principle. Legitimate businesses that potentially increase the level of risks by bringing in new material and/or material from new areas where there is less existing knowledge of the risks from pests and pathogens could consider the assessment and prevention of these risks to be the responsibility of Defra. Businesses engaged in illegal activities, such as smuggling, or those importing through less monitored pathways, such as by Internet, may know they are increasing risks and so may make themselves harder to identify. In some instances, the actual source of an incursion is never found even when the area affected is fairly limited (e.g. a single producer or glass house). Either way, it leaves those potentially affected by the QPH issue suffering the consequences while the risk introducers, through ignorance or intention, might escape most of the costs.
The only way to apply pressure to particular businesses that are not subject to fines (possibly due to lack of evidence rather than fault), but follow sub-optimal practices that continually raise the risk to the sector is to relate compensation or some other incentive to the use of best practices or Code of Conduct agreements beyond the QPH regulations. This approach is being used in Australia, and is discussed in section 4.7 and further in 7.3.2. In Britain, this could be integrated into best practices related to incentive payments for environmental stewardship, but that would not cover all relevant sectors.
Recent economic theory on reducing impacts of invasive non-native species provides some possible models for recovering substantial and dependable costs from risk introducers, including import tariffs and tradeable pollution rights (Perrings et al., 2005). We found no evidence of mechanisms for such cost recovery being considered or applied in an agricultural context. Therefore, we do not discuss risk introducers further in this report, but provide some ideas for consideration in a footnote below[2].
1.3.
What pests and diseases?
We have focused this project on QPH threats, which are a particular set of species listed by the European Commission (EC) under Council Directive 2000/29/EC and subsequent amendments, whose introduction and spread will be banned by any MemberState if they are found present on certain plants or plant products. Often during this project, we were encouraged to consider exotic pest and disease threats and introductions which are not on this list, such as the horse chestnut leaf miner, Cameraria ohridella. We acknowledge that inclusion of exotic pests and diseases on this quarantine pest list is somewhat arbitrary from the perspective of cost sharing, and usually dependent on (1) how recent the threat is, (2) how economically damaging the species may be to one or more MemberStates and (3) the likelihood of excluding the new species. In many cases, new pests and diseases establish so quickly or thoroughly that it is not worth the effort to ban them, as eradication is unlikely. In this project, we have therefore at times considerednon-quarantineexotic pest and disease threats, but have attempted to always identify those cases.
In this project, we consider only exotic invertebrate pests and microbial diseases of plants. We do not consider invasive exotic weed or vertebrate pests which affect agriculture and the environment. We note, however, that some stakeholders who we interviewed, for example the CountrysideLand and Business Association (CLA), saw potential overlap in government policy regarding exotic pests and diseases and exotic plants and vertebrates. We note that new legislative mechanisms for prevention and eradication of non-native invasive species will be considered in the consultation on The Invasive Non-Native Species Strategy for Great Britain (2007), including the “scope for broadening the remit of the Plant Health Services to operate more widely … to reap the benefits of an existing infrastructure and national network” (Defra, 2007a). Hence, sponsors may wish to consider the likely future convergence of policy and legislation on agricultural and environmental health, and inclusion of prevention and control of exotic weeds and vertebrates in looking forward on the issue of responsibility and costsharing between government and industry.