Dynamic general equilibrium analysis of improved weed management in Australia's winter cropping systems
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A recent analysis indicated that the direct financial cost of weeds to Australia’s winter
grain sectorwas approximately $A1.2bn in 1998–1999. Costs of thismagnitude represent
a large recurring productivity loss in an agricultural sector that is sufficient to impact
significantly on regional economies.Using amulti-regional dynamic computable general
equilibrium model, we simulate the general equilibrium effects of a hypothetical successful
campaign to reduce the economic costs of weeds. We assume that an additional
$50m of R&D spread over five years is targeted at reducing the additional costs and reduced
yields arising from weeds in various broadacre crops. Following this R&D effort,
one-tenth of the losses arising from weeds is temporarily eliminated, with a diminishing
benefit in succeeding years. At the national level, there is a welfare increase of $700m in
discounted net present value terms. The regions with relatively high concentrations of
winter crops experience small temporary macroeconomic gains.