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There was a flawed policy banning Glyphosate in Sri Lanka in 2015 that was later withdrawn, but only after significant economic losses were experienced, especially in the tea industry. The focus of this study is to highlight the impact of the policy on the tea growing sector and determine the economic cost on the tea industry throughout the value chain. It is also aimed to remind policymakers that science and economics, theory and evidence, still matter in implementing public policies. The method used in the study involved gross margin budget analysis of tea grower groups, thematic analysis of qualitative data collected through interviews and welfare analysis of the impacts of the ban on the industry using an Equilibrium Displacement Model (EDM) of the tea industry in Sri Lanka. Direct impacts were experienced by the farm sector engaging in tea cultivation. An unintended consequence of this policy in the tea industry was rejection of tea exports from Sri Lanka to Japanese markets. The estimated annual loss in the tea industry by banning Glyphosate was estimated to be LKR 20 billion (more than $US100 million), though the true cost likely was much more than this. Hence, policies introduced to minimize adverse impacts from market failures warrant full attention being given to the scientific, economic, social and political realities of the case at hand, and the likely consequences for the affected parties and their responses., Proceedings in Food System Dynamics, PROCEEDINGS IN SYSTEM DYNAMICS AND INNOVATION IN FOOD NETWORKS 2023

International agricultural research institutions are now expected to deliver on a range of Sustainable Development Goals (SDGs) in addition to their traditional goal of developing technologies that increase the incomes of farm families and alleviate poverty. There has been concern that pursuit of these other objectives may have a high opportunity cost in terms of a slower rate of poverty alleviation. Here we argue that many of the SDGs can be thought of as capital stocks which are jointly related in production and consumption. There are opportunities for research institutions to exploit this jointness. Well-designed projects to deliver new technology lead to the alleviation of poverty (if the technology is widely adopted) but also have the potential to enhance a range of capacities in scientists and farm families and in environmental health. The risk of projects that do not have a technology focus is that the incentives for farm families to change behaviour may be weak and hence gains in SDGs may be small. One implication is that assessing the economic impact of new technologies remains important. While changes in SDGs should be at least qualitatively described, a finding of robust economic impact based on evidence of adoption, gives confidence of gains in other jointly supplied SDGs.

The tea industry is an important contributor to the Sri Lankan economy, accounting for around 15 per cent of total exports and around 15 per cent of employment of the Sri Lankan people. However, the performance of the industry has slumped in recent years. The share of Ceylon tea in the world market is gradually decreasing, and its competitiveness is being challenged by emerging tea producing countries such as Kenya. Domestic consumption, while remaining stable, is primarily of low-quality tea as the best quality teas are expensive and are mostly exported to international markets. Production is declining and becoming more unstable because a number of government policies have been introduced which have disrupted the industry and led to unintended consequences. To provide a basis for examining these adverse trends, and some evidence-based data for future policy deliberations, the process of developing an Equilibrium Displacement Model of the tea industry in Sri Lanka is outlined in this paper. The relevant theory is described, input data such as market quantities and prices, and elasticity estimates, that are used in the model, are defined, and some hypothetical external shocks are imposed on different supply and demand functions. The results of those experiments verify that the model outcomes are consistent with the changes in inputs, and that the model would provide a sound basis for evaluating the expected outcomes of actual exogenous shocks or actual policy changes.

Over recent decades, the Australian grains industry has faced various challenges arising from changing climate, increases in extreme weather events and declining public research, development and extension (RD&E). At the same time, there has been growing competition in Australia’s main grain export markets. To increase the annual rate of productivity growth and maintain international competitiveness, more and better-aimed investments in agricultural RD&E are required. Equilibrium Displacement Models (EDMs) provide a framework for assessing the potential economic returns to investments in agricultural RD&E and the distribution of these returns along the industry supply chain. In this paper, an EDM for the southern Australian grains industry, encompassing South Australia, Victoria and Tasmania, is developed as a companion to the previously developed EDM of the WA grains industry. Using the EDM, three hypothetical RD&E investment scenarios are examined: a reduction in the cost of farm production variable inputs resulting from new farm technologies or improvements in cropping processes and practices; a cost reduction in stockfeed manufacturing resulting from new technologies and improved industrial techniques; and an increase in the willingness of overseas consumers to pay for wheat due to quality improvements or promotion. The results show that, directing RD&E towards a market segment of the supply chain with high gross revenue generates greater returns to the industry as a whole. As such, RD&E investment aimed at either farm production or bulk wheat export—segments of the supply chain which account for substantial gross value at farm gate and port—can yield high returns. Additionally, producers gain a greater share of benefits when productivity-enhancing research is directed towards on-farm rather than off-farm processes. Furthermore, producers can accrue large shares of the total benefits arising from research that enhances the quality of bulk grain exports because of the high price elasticity of demand for export grains.

Consumers of fresh pork have long been aware of the risk of their pork purchases not meeting eating expectations due to unpleasant taste or smell or other unsatisfactory quality characteristics such as a lack of tenderness. Boar taint, or the risk of it, is one of the most important factors identified in surveys of consumers of pork as being responsible for having a poor eating experience. Immuno-castration (IC) of entire male pigs is one method of reducing boar taint in pork. Currently about 60 per cent of male pork produced in Australia is immune-castrated. The question asked here is whether it would be profitable for the industry if the remaining male slaughter pigs were immuno-castrated as well. The additional costs associated with IC include the costs of the vaccine, extra labour costs, and additional costs arising from abscesses at the injection site causing increased product downgrades and stoppages of the slaughter line for cleaning. A major benefit of IC for the pig industry is a reduction in consumers of pork enduring poor experiences from unpleasant taste or smell when they eat pork. Over time, reducing the occurrence, and the risk of occurrence, of having a less than satisfactory experience when consuming pork has the potential benefit of the industry avoiding losing customers, and even increasing demand for pork, above what it would be with the continuation of the current proportion of boar-tainted pork in the total national supply of pork. Over the next ten years, if national consumption of pork increases at the same trend of the past decade, the benefits from avoided annual losses of demand or from increases in demand by just 0.5 per cent of total annual national consumption of pork would cover the cost of the remainder of the industry adopting IC. This conclusion applies if IC was adopted fully and immediately and the cost was the lower of the range of possible cost estimates at $0.10/kg carcass weight. More realistically, if producers adopted IC more slowly and adoption of IC took five years, and the cost of using IC was $0.10/kg carcass weight, then avoiding or preventing a loss of 1.5 per cent in annual sales would mean the total benefits exceed the total costs of achieving this outcome. Such relatively small gains in sales or avoided losses of sales seem eminently achievable. The conclusion of the BCA is that an increased use of immuno-castration in Australia’s pig production system that reduces the prevalence and the risk of boar taint would have a high likelihood of delivering a net benefit to participants in the industry.

In the high-rainfall zone of south-eastern Australia, yields of broadacre crops are constrained by physical and chemical characteristics of the sub-soil. Scientific research is being conducted into ameliorating these physical and chemical sub-soil constraints by using organic amendments that have high levels of nitrogen. This paper is about the results of economic research into the net benefits and risk of ameliorating sub-soil constraints by applying sub-soil amendments such as chicken manure to cropland in the high rainfall zone. The key economic question for a grower is whether the extra benefits of ameliorating sub-soil constraints and increasing the yields of crops are greater than the extra costs of doing so, considering risk. The aim of this research was to determine the effects of yield and price risks over a run of years on the profitability of making such soil amendment investments. Investment costs and annual activity gross margins for a crop rotation were used to estimate the economic performance (NPV, IRR and BCR). Risk analysis was used to assess the effect of price and yield variability on the mean and variance of outcomes. It was found that an investment in sub-soil amelioration which lasted for five years was more profitable than conventional cropping, at an average annual required rate of return of 6 per cent p.a. real, before tax. The size of the expected extra yield benefits above the yields of conventional cropping, and the longevity of the effects of the amendment and yield benefits, are the most important factors for a crop farmer to consider when assessing the option of investing in sub-soil amelioration to grow better crops in the high rainfall zone.