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invasive species management: trends in emergency program expenditures

The Secretary of Agriculture can authorize emergency programs to deal with outbreaks of new and established invasive agricultural pests when such outbreaks entail potentially serious economic or environmental consequences. These emergency programs are managed by USDA’s Animal and Plant Health Inspection Service (APHIS).

The overall goal of an emergency program typically is eradication of the pest. APHIS can offer payments to producers to compensate them for expenses and lost income when emergency program activities include the destruction of animals or plants. Compensation—or indemnity—payments are mandatory for destroyed livestock and optional for plants.

In recent years, there has been a significant increase in the level of indemnities paid out in APHIS emergency programs. Indemnities have been included in the programs for three invasive crop pests—Karnal bunt, citrus canker, and plum pox. Historically, APHIS has not compensated crop producers for income losses related to controlling pest outbreaks. These two trends raise three important questions related to invasive pest policy. Are we seeing a:

  • Greater incidence of invasive pests?
    • Due to increased trade between countries and regions
    • Due to climate change or other ecological factors
  • Greater detection of invasive pests?
    • Due to increased search efforts for invasive species
  • Greater public willingness to insure farmers?
    • Due to expanded definitions of natural disaster
    • Due to greater willingness to reimburse producers for any given loss event

While there are good reasons for these expansions, assigning a relative importance to each question requires big-picture understanding of trends in natural disaster assistance and underlying economic factors. Recent trends in APHIS emergency expenditures can be compared to trends in national disaster assistance, farm sector disaster assistance, and crop insurance programs. Data on land values, commodity prices, farm program payments, and farm disaster assistance can be examined to see if recent trends in APHIS indemnity payments can be explained by these economic factors.

emergency indemnities on the rise

Since 1996, expenditures on APHIS "extraordinary emergency" programs and their related indemnities have increased markedly relative to the first half of the 1990s. Average annual spending on APHIS emergency programs rose from $10.4 million from 1991 to 1995, to $232.3 million in 1999-2001.

Trends in APHIS emergency program expenditures

other disaster programs

The recent growth in APHIS emergency program payments appear similar to the trends in national disaster assistance, farm sector disaster assistance, and crop insurance payments. All have had significantly higher expenditures since the mid 1990s. All have increased the frequency at which assistance is offered.

Similar disaster payment programs

other economic factors

Indemnity payments for eradication programs might be higher if local environmental conditions, commodity market conditions, or a lack of coverage by other farm assistance programs meant that farmers experiencing the emergency are under economic stress already. Focusing on counties affected by Karnal bunt, citrus canker, and plum pox, low growth rates in agricultural land values may reflect a decline in the economic health of each region's farm sector. Declining commodity prices over time may reflect decreasing demand for a commodity that would also stress producers. Low farm program payments may suggest recent APHIS indemnity payments have gone to areas where other forms of farm assistance are not available. Consistently high levels of crop insurance and disaster assistance payments may induce farmers to plant crops that are risky to grow.

Land values in affected States appreciated much less than the average for all U.S. agricultural land. Land values for counties affected by citrus canker appreciated much less than for the rest of Florida. Karnal bunt counties actually lost value. Land value evidence suggests that farms in these areas were already under some economic stress, which may have been aggravated by the emergencies.

Percent change in land values, 1992-97
Species and area
Affected counties
Other counties
Citrus canker, Florida
-0.5
6.3
Plum pox, Pennsylvania 1
10.3
10.0
Karnal bunt, Arizona/New Mexico
-2.8
16.4
U.S. average
na
24.5

1 Plum pox identified in 1999.
na not available.

 

Commodity prices were generally flat for stone fruit, and down for grapefruit and wheat. Producers of stone fruit, affected by plum pox, have not been facing declining prices. Pennsylvania peaches were the highest value stone fruit. Grapefruit growers, affected by citrus canker, have been facing declining prices. Among Florida grapefruit, red seedless tend to be the highest valued. Wheat prices have been declining since 1996, when the Karnal bunt program began. Thus, the citrus and wheat industries were undergoing economic stress even without invasive pest emergencies.

Average annual producer prices, selected stone fruits

Average annual producer prices, grapefruit
Average annual producer prices, wheat

Total payments to farmers tend to be above average in counties with Karnal bunt, but are less than average in counties with citrus canker or plum pox. Crop insurance and disaster assistance payments have been above average in counties affected by citrus canker, and similar to the rest of the U.S. for counties with Karnal bunt and plum pox. Government payments to citrus and plum pox areas, beyond the emergency programs, are below the national average. There is little evidence that insurance and disaster payments are provoking risky agricultural activity.

Government paymetns to producers, average per county

Disaster and crop insurance payments, average per county

In summary, some affected areas or commodities have faced declining economic trends. Emergency program payments may have been used to offset other declining sources of revenues. However, the evidence of correlation is not overwhelming.

Trends in economic data Citrus canker Plum pox virus Karnal bunt
Low growth in land values X X X
Falling commodity prices X   X
High natural disaster assistance X    
Low total government payments X X  

 

for more information, contact: Jan Lewandrowski
web administration: webadmin@ers.usda.gov
page updated: April 1, 2003

Go back to Invasive Species Management Briefing Room

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Invasive Species Importance

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Emergency Program Expenditures

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