Whole Farm Economic Assessment of IPM for a …1 | P a g e Whole Farm Economic Assessment of IPM for a Case Study Farm at Winchelsea, Vic. Pilot NIPI Workshop held in Melbourne GRDC

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Whole Farm Economic

Assessment of IPM for a Case

Study Farm at Winchelsea, Vic.

Pilot NIPI Workshop held in Melbourne

GRDC Project Code: CSE00054

Facilitated by Mike Krause

Applied Economic Solutions P/L

March 2014

�Specific outcomes for complex problems� 7 Harriet St. Croydon SA 5008

Ph: 08 8396 7122 � M: 0408 967 122 � Email: [email protected]

Web: www.AppES.com.a

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Index

Page

Executive Summary 3

1. Introduction 3

2. Issues in assessing IPM 4

3. Method of assessment 5

4. Assumptions used 9

4.1 Control treatments for invertebrate pests

9

4.2 The financial impact of secondary pest outbreaks resulting

from the use of non-IPM methods

15

5. Results 15

5.1 What financial impact does an outbreak year of each pest

have on the case study farm?

16

5.2 What are the economic differences between non-IPM and

IPM treatments on the various pests?

20

5.3 What are the financial implications of non-IPM practices when

the impact of secondary pest outbreaks is considered?

25

6. Conclusions 26

Attachment 1 28

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Executive Summary

The study of invertebrate pest management is challenging, especially when assessing

Integrated Pest Management (IPM) which seeks to maintain pest population below

an economic threshold using a range of biological, physical and chemical control

options. There is a need to quantify the economic benefits that come from

invertebrate pest management research in general, in order to guide the Grains

Research Development Corporation’s (GRDC) further research investment in this

area. These studies should extend to the costs and benefits to grain growers of the

various methods of pest control, as illustrated in this report.

This study uses a systems modelling approach to assess the economic impact of

invertebrate pest outbreaks on a farming business. A case study farm was created

for the high rainfall zone of Winchelsea, Vic. This case study farm was modelled using

the Plan to Profit (P2P) modelling software, so that the impact on costs and income

could be measured for each method of insect pest control. A group of experts were

gathered to collect both the known and unknown data needed to complete this

research.

The model demonstrated that there are sometimes large economic losses caused by

invertebrate pests and illustrated why they need to be managed. When allowing for

the frequency of pest outbreaks across time, there appeared to be no significant

economic difference between the non-IPM and IPM approaches. However, when the

increased probabilities of secondary pest outbreaks were included in the model IPM

was often the best economic approach to use.

This is a significant finding as little analysis has been carried out at the farm level to

measure the economic impact of research into invertebrate pest control options in

Australian cropping systems.

This study highlights the significant economic impact from secondary pest outbreaks

when using non-IPM. While the frequency of pest outbreaks were qualified in this

study using expert opinion, and therefore subjective, it is a factor that could and

should be measured in some way, as it greatly alters the economic outlook for IPM.

This finding points to a new strategic direction for future research.

Additional issues such as pest resistance, health risks, and price variability with

regards to chemical costs and application costs were outside the scope of this

analysis. Our findings here suggest that an attempt to quantify some of these costs is

warranted.

1. Introduction

There is a need to assess the impact Integrated Pest Management (IPM) techniques

can have on the financial performance of farms. This is a very challenging task given

the nature of IPM, the systems thinking required to research the influence of IPM on

farms, and the continued variability experienced with climate, crop growth and pest

pressure. The whole farm economic impact of traditional chemical pest control

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methods (non-IPM) can be more easily assessed as these results tend to be more

evident. However, the challenge here is the ‘non-target’ damage caused from

chemical application, where the beneficial invertebrates (good bugs) are also taken

out of the farming system. It has been observed that this loss of beneficials caused

by broad-spectrum insecticides allows other pest populations to explode and cause

further potential crop losses, if not controlled. Hence, farms become dependent on

chemical control, with the associated costs and resistance issues. The challenge for

farmers in managing a viable business is to balance income and costs, and to assess

the benefit and costs of short-term pest solutions offered by non-IPM methods

against the longer-term controls offered by IPM methods.

The challenge for research organisations such as the GRDC, is to continually assess

the performance of their investment into various research programs. While some

fundamental research may not show benefits for many years, they eventually need

to show returns to warrant ongoing investment. Due to its nature, IPM uses a

systems approach. This research paper focuses on specific invertebrate species in a

high rainfall zone, and attempts to provide insight into a whole system from a whole

farm economic perspective. It is also very difficult to undertake systems research in a

natural environment.

However, it is a systems thinking approach that farmers need to employ to direct

their decision making. Thus, a system modelling approach has been used in this

study to provide insight into the challenges farmers face in choosing either an IPM or

non-IPM method of invertebrate pest control. This approach has been used to assess

the whole farm economic impact expected on a case study farm when using current

knowledge to inform the analysis. System modelling by its nature uses both known

relationships based on research data and more subjective expert knowledge to

estimate relationships that are not objectively known. Thus, this modelling is based

on both subjective and objective data.

IPM aims to manage insect populations below a threshold, beyond which could

result in significant economic losses. The IPM approach to insect control tends to be

‘long-term’ and focus on using a diversity of methods to limit pest population

growth. In comparison, a non-IPM approach would have farmers using chemical

methods of control as problems arise.

The challenge for farmers is to manage their business economically and, in most

cases, the non-IPM approach to insect control can be cheaper and show more

immediate crop protection. It is felt that farmers experiencing cash flow and viability

pressure tend to choose the sometimes cheaper and quicker non-IPM approach.

However, there is evidence that the IPM approach to insect management is more

holistic and major insect outbreaks can be better managed. These aspects, such as

crop loss, added costs of control and frequency of pest outbreak are attempted to be

measured in this systems approach to the problem.

2. Issues in Assessing IPM

One of the drivers for the use of IPM is to decrease the reliance on chemicals as the

sole method of insect pest management. This is for the following reasons:

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• Pest resistance: The effects of long term chemical use on the farm

environment are largely unknown. Developing an alternate method of insect

control would provide farmers with alternate insect pest management

strategies should the system of chemical control no longer work. One such

case could be when insects build resistance to certain chemicals.

• Health risks: Some chemicals, such as the ‘Schedule 7’ (S7) group of

chemicals, have been shown to have high levels of health risk to users. In

some cases, this has resulted in death. There is significant risk that in the

future, these chemicals may no longer be available, and thus other methods

of insect control are needed.

• Cost: While the expense of chemicals is not currently an issue, with a number

of chemicals coming off patent and becoming significantly cheaper, there is

always a possibility that shortage of supply could drive chemical prices

higher. The cost of chemical application may in future become too expensive;

having cheaper methods of control may be essential to maintain farm

business viability.

• Access: Many chemicals which are currently restricted or banned

internationally are now being reviewed for Australian use. If some of these

chemicals are removed from the market place, it may result in the availability

of only the more expensive targeted chemicals.

Economists call these benefits of IPM ‘non-priced’ benefits as they are difficult to

quantify. While they are not taken into account in this whole farm analysis, they also

need to be considered when assessing the ongoing research investment into IPM.

3. Method of assessment

The method chosen for this assessment has been to model a case study farm and

measure the whole farm economic differences of the following options for

invertebrate insect control:

1. No treatment (used as ‘the control’ against which the other methods are

measured).

2. Non-IPM methods, regarded as prophylactic chemical applications that affect

both the target and non-targeted insect populations

3. IPM methods, which utilise chemical controls but also employ a monitoring

approach with the aim of maintaining ‘beneficial’ populations of insect

species.

The data collected was used to assess the economic impact of these three options on

the case study farm by calculating:

• the cost of the control method;

• the likely damage to income under all options (economic consequence); and,

• the likelihood (probability) of a pest outbreak.

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One of the limitations of systems research is that research data does not provide an

understanding of all relationships within that system. In this study, one such area is

the relationship between multiple insect species outbreaks. To address this gap,

‘experts’ in this area are used to provide their knowledge and understanding.

It was necessary to focus on one particular geographical area as pest population and

the frequency of outbreaks in population vary significantly across areas. Winchelsea,

in Victoria, was selected as the area to study. Characterised as a relatively high

rainfall zone (average rainfall 424mm) for crop production, there has been an

increasing trend toward cropping in the area over the last 10 years.

Once the study area was selected, experts were gathered to help collect the

necessary data and understanding. They included farmers, consultant agronomists,

entomologist researchers and an agricultural economist (modeller). These experts

are listed in Table 1 and were selected for their skills, experience and knowledge.

Table 1: Experts who attended the workshop

Profession Name Location

Farmer Rowan Peel Winchelsea, Vic

Farmer Ed Wetherley Winchelsea, Vic

Farmer/Scientist Michael Nash Melbourne Uni, Vic

Agronomist David Watson Ballarat, Vic

Agronomist Craig Drum Tatune, Vic

Scientist Paul Umina Melbourne Uni, Vic

Scientist Garry McDonald Melbourne Uni, Vic

Scientist Kym Perry SARDI, SA

Scientist Sarina MacFadyen CSIRO, ACT

Agricultural Economist Mike Krause AES P/L, SA

Total 10

A 1-day workshop was conducted in Melbourne on 17th June, 2013, to discuss the

pest issues and collect the data. Data collection was done using discussion, to allow

collective understanding to arrive at a consensus position. It should be noted that

the scientists in the room were often uncomfortable with this process because of the

lack of quantifiable data, and high dependence on qualitative-best-guess ‘data’. The

others in the workshop were more comfortable with subjective opinion, as they had

to deal with this daily in their respective businesses.

The major invertebrate pests for the Winchelsea area, listed in Table 2, guided

discussion in the workshop and the whole farm modelling. Additional information is

provided in Attachment 1.

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Table 2: The invertebrate pests of the Winchelsea area Season Important pests Climatic and agronomic factors that encourage their build up

Aut/winter Redlegged earth mites cool/wet winters, good early season break, long-term pastures, (NB

slow crop growth in autumn/winter acentuates damage potential)

Aut/winter Blue oat mites cool/wet winters, good early season break, long-term pastures

Aut/winter Lucerene flea cool/wet winters, use of SPs, prior pastures, clay soils

Aut/winter Slugs wet summers, high stubble residues, minimum/no cultivation

Late wint /Spring Canola aphids warm/dry spring, few beneficials, green bridge, mild winter,

moisture stressed plants

Late wint /Spring Cereal aphids warm/dry spring, few beneficials, green bridge, mild winter,

moisture stressed plants

Aut/winter Cockchafers long-term pastures, no cultivation, soils with high organic matter

Aut/winter Balaustium mites pastures, cool/wet winters

Aut/winter Bryobia mites mild autumn and winters, green bridge

Aut/winter Earwigs high stubble residues, minimum/no cultivation

Aut/winter Millipedes high stubble residues, minimum/no cultivation

Late wint /Spring Native budworm wet winters in inland Australia, northerly spring weather systems

Late wint /Spring Diamondback moth green bridge, dry winters, warm/dry spring

The major characteristics of the case study farm are provided in Table 3. These

characteristics were initially developed prior to the workshop by expert farm

business management professionals to allow for time efficiencies in the workshop.

However, these characteristics were reviewed and further refined during the

workshop, again by using a consensus method.

The aim of the farm case study was to assess a viable business that was expected to

be both viable in the short and long-term. Profit and efficiency in this business are at

very sound levels.

The modelling of the whole farm case study was done using the P2PAgri software

called ‘Plan to Profit’ (P2P). This software is available commercially to farmers and

professional advisors, and provides detailed analysis of a farm business performance

using farm management accounting. This includes the measurement of profitability,

efficiency and equity. Its strength is the ability to model various scenarios and so

measure the financial impact of ‘what-if’ analysis. It is this modelling capacity that is

used for the analysis in this project, as the financial impact of each insect pest is

assessed.

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Table 3: Characteristics of the Winchelsea case study farm

Details of the case study farm

Area 1150 ha

Annual rainfal 424 mm

Enterprise by area

Improved pasture 410 ha 36%

Lucerne pasture 130 ha 11%

Wheat 250 ha 22%

Barley 110 ha 10%

Canola 250 ha 22%

Sheep carrying capacity

Improved pasture 12 dse/ha

Llucerne pasture 12 dse/ha

Grain Yields

Poor Average Good

Wheat (t/ha) 3.5 5.0 7.0

Barley (t/ha) 3.0 5.5 6.0

Canola (t/ha) 1.2 2.5 3.0

Sheep numbers

Mating Ewes (hd) 3,642 hd

Commodity Prices

Wheat $240 /t

Barley $220 /t

Canola $500 /t

Wool $600 /bale

CFA Ewes $50 /hd

Ewe Hoggest $60 /hd

Lambs $90 /hd

Assets

Land value $2,150 /ac

Total land value $6.1m

Total sheep value $272,940

Total machinery value $400,000

Liabilitiy $980,000

Equity 86%

Estimated Gross Margins

Poor Average Good

Wheat ($/ha) 512 872 1,352

Barley ($/ha) 347 897 1,007

Canola ($/ha) 176 826 1,076

Sheep ($/ha) 586 636 636

Season

Season

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4. Assumptions used

The assumptions are a record of the consensus achieved at the workshop. They are

provided in two parts:

• Control treatments for invertebrate pests

• The financial impact of potential pest outbreaks resulting from the use of

non-IPM methods

One of the major challenges for research into pest management is to understand the

systems effect of removing one pest population through the use of a non-IPM

method. While this systems’ effect has been observed, it is very difficult to research

and provide a detailed understanding of the effect this may have on the population

dynamics of another pest. For this information, expert knowledge and expectations

were collated from the workshop although at times the assumptions were still ‘best

guesses’.

Also, a challenge in costing IPM is that specialist agronomists provide regular insect

population monitoring throughout the year on cropped areas. This is estimated at

$5/cropped ha, which is an annual expense whether insect populations become a

problem or not. This cost is viewed by IPM farmers as the premium they need to pay

to maintain an active understanding of their invertebrate pest populations.

4.1 Control treatments for invertebrate pests

Redlegged Earth Mites

This pest is encouraged by an early season break preceded by a cool wet winter.

Their numbers build up in pasture and then spread to the edge of adjacent crops or

plantings of susceptible crops in the following season. There are currently few

effective natural predators to Redlegged Earth Mite and its economic damage is on

canola paddocks. However, depending on the health of the crop, it can grow despite

the pest threat and not result in economic loss.

Control is aimed at pasture paddocks that are about to go into, or are nearby, a

canola crop.

It is expected in both non-IPM and IPM treatment methods would result in no canola

yield loss.

• No Treatment

The frequency of this weather condition is thought to be 15% of the years (3

years in 20) in the Winchelsea area, and if nothing is done to control the

problem, it is thought that 50% of the canola paddock will experience a 100%

yield loss. This equates to 50% yield loss over the entire canola paddock in the

year of outbreak.

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• Non-IPM treatment

Treatment of the canola seed with dimethoate is used for both the non-IPM and

IPM treatments, so no cost differential has been made.

A ‘bare earth’ spray is applied as the paddock is coming out of the pasture at the

beginning of the cropping season, at a cost of $3/ha. As this chemical would be

added in with other weed sprays, there would be no added application cost.

• IPM treatment

Apply Cosmos to the canola seed at $12/ha for every canola paddock.

Apply a border spray only when needed, equating to 15% of the seasons. For

example, this border spray would be on 10ha on a 400ha paddock. The cost of a

farmer application is estimated at $6/ha with the chemical costing of $1.50/ha.

Slugs

Slugs are present every season and can result in patchy growth in crops.

• No Treatment

Slugs are expected to occur 1 in 3 years and affect 50% of all crops with 20% yield

loss, with the remainder being un-damaged.

Pastures can be affected but it is unknown what effect this pest has on dry

matter production.


Baiting in canola at $30/ha ($10/ha - $50/ha range), with a second baiting at

$15/ha.

Yields are expected to decline by 5% over the entire crop in the year of

infestation.

• IPM treatment

The control strategy is to cultivate, burn and roll slugs at a cost of $10/ha.

Baiting is also used but at a lower rate than non-IPM. The cost was estimated to

be 60% less than non-IPM.

Crop yields are not expected to decrease.

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Lucerne Flea

Lucerne Flea is prevalent in the Winchelsea area every year and its economic impact

is primarily on canola.

It is expected that both non-IPM and IPM methods of control would result in no

canola yield loss.

• No Treatment

If nothing is done to control Lucerne Flea, economic damage is expected in every

second year with 10% of the canola experiencing 20% yield loss.


Apply a blanket spray of all lucerne at $2/ha, with no added application cost as

this spray would be mixed with other sprays.

The canola would need spraying one year in seven, with a $2/ha chemical

application at an application cost of $5/ha.

It was anticipated that lucerne production may be reduced by 5% - 10%, but that

this was a small reduction leading to no drop in animal production.

• IPM treatment

The control of Lucerne Flea was similar to Redlegged Earth Mite and continual

monitoring would lead to targeted spot spraying. However, after considerable

discussion, it was felt that Lucerne Flea was a non-issue and so its control cost

would be covered with Redlegged Earth Mite.

Blue Oat Mite

The biggest issue with Blue Oat Mite is incorrect identification, as it is easily confused

with the Redlegged Earth Mite, having a black body and red legs. It was thought that

up to 50% of agronomists misdiagnosis it, leading to incorrect spraying as the control

treatment.

The IPM farmer is better informed as they tend to identify Blue Oat Mite correctly

and spray for better control.


canola yield loss.

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• No Treatment

The frequency and potential loss for Blue Oat Mite is similar to Redlegged Earth

Mite with an infestation in 15% of seasons, with a 50% yield loss over the entire

canola paddock.


Misdiagnosis may result in a 50% increase in spraying costs ($3/ha plus

application of $5/ha).

• IPM treatment

It was felt that there were no added costs or canola yield loss, as it would be

handled adequately with the Redlegged Earth Mite control.

Balaustium Mite

Again, this mite looks similar to Redlegged Earth Mite, but is bigger. It appears to be

an emerging problem and is thought to be caused by the continual control of

competitor mites through repeated chemical applications. Unfortunately, because

there is no historical problem with this mite, little is known of this mite and currently

there are no listed chemicals for its control.

It can cause damage to canola and lupins.

• No Treatment

The frequency of numbers being high enough to affect crop yields is thought to

be 1 year in 10, and then only affecting canola yields by 2%. So, the effect is

minor.


While there is no treatment, Talstar is used at $10/ha on the canola, as farmers

will use off-label strategies in an attempt to find an appropriate treatment.

• IPM treatment

It was felt that due to the population of ‘beneficial’ insects, Balaustium Mite

were not an issue for IPM farmers.

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Byobia Mite

Byobia Mite also experiences misdiagnosis with Redlegged Earth Mite. It likes drier

conditions than the Winchelsea area and so it was not seen as a pest that caused

economic loss, and was therefore not considered for this analysis.

Cockchafers

Cockchafers, like Byobia Mite, were not seen as an issue in the Winchelsea area and

so it was not considered for this analysis.

Earwigs

Earwigs are becoming more prevalent in canola each year with the popularity of ‘no-

till’ farming, which encourages more dry matter in the cropping system.


canola yield loss.

• No Treatment

Earwigs are evident in canola each year and if not treated, would cause a 15%

yield loss.


Baiting is carried out around sowing time on all canola at a cost of $12/ha. As it

is applied at the same time as other treatments, no added application costs

need to be allowed for.

Even with this treatment, there is expected to be a 10% yield loss every year,

with 10% of the canola requiring re-sowing every second year.

• IPM treatment

Like Redlegged Earth Mites, Cosmos is applied to the canola seed at $12/ha.

No canola yield loss is expected after this treatment.

Diamondback Moth

This pest tends to prefer drier climates than Winchelsea, particularly winter and

spring. The challenge is that it is very mobile and flies in from northern regions. It has

a very quick lifecycle so treatment may need to be repeated. It affects only canola

and is expected to occur 1 in 14 years.

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• No Treatment

It is expected to be an issue in one of every fourteen years. Canola can

experience up to 75% yield loss in that season.


The timing of chemicals is very sensitive to control, with farmers using Fastac at

$4/ha plus an aerial spray application cost of $10/ha. This is generally followed

by Afirm spray at $14/ha plus an aerial spray application cost of $10/ha.

Even after this chemical application, a canola yield loss of 17% is expected.

• IPM treatment

When needed, Dipel is sprayed in early spring at $35/ha and applied by air at

$10/ha. Yield loss in canola is expected to be 10%.

Canola Aphid

Canola aphid only effects canola and generally only when there is moisture stress in

the poorer years.

• No Treatment

It is expected that economic loss due to Canola Aphid occurs 1 in 10 years and if

untreated could cause 10% yield loss in canola.


The method of control is to use Fastac at $4/ha with an aerial application cost of

$10/ha. It was felt that farmers use a non-IPM method for prevention, and

because they do not monitor, tend to spray 1 in 5 years, when they only need to

spray 1 in 10 years.

Once this control method is used, no canola yield loss is expected.

• IPM treatment

Pirimicarb is applied 1 in 10 years at $14/ha, with an aerial application cost of

$10/ha.

This method of control resulted in no yield loss to canola.

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Cereal Aphid, Millipedes, Native Budworm and Army Worm

These invertebrate pests had a lower priority in the Winchelsea area and so were not

considered to warrant study.

4.2 The financial impact of secondary pest outbreaks resulting

from the use of non-IPM methods

There was discussion of the frequency of outbreaks of multiple pest species when

using the non-IPM method (called secondary pest outbreaks here). Table 4 was the

group’s consensus of the relationship between the likelihood of outbreaks of a

secondary pest species after a chemical intervention for a primary pest species.

These are subjective values and have very little research evidence to support them.

The value of this metric is that if one invertebrate pest out-break occurred and a

non-IPM method was used to control that outbreak, then a value of 2.0 meant that

an associated outbreak from a secondary pest would be twice as likely to occur than

would be the ‘normal expectation’. From the data in Table 4, if Redlegged Earth Mite

were to be the primary pest, the chance of both a secondary outbreak of Lucerne

Flea and Balaustium Mite outbreak occurring would increase by 150%.

Table 4: Metric of non-IPM frequency of secondary pest outbreaks Secondary Outbreak Red Legged Slugs Lurcerne Blue Oat Balaustium Earwigs Diamondback Canola

Primary Outbreak Earth Mite Flee Mite Mite Moth Aphid

Red Legged Earth Mite 1.5 1.5

Slugs 0.5

Lucerne Flee 1.2 1.1 1.5 1.5

Blue Oat Mite 1.5 1.5

Balaustium Mite 2.0 1.5 2.0 2.0

Earwigs

Diamondback Moth 1.2 1.2

Canola Aphid 1.5 1.4 1.7

5. Results

These results have been presented as the estimated financial effect on the case

study farm. It is important to keep in mind that these results relate to a case study

farm in a high rainfall mixed farming area of Victoria. It is the relative results

between the various pests that are important as other farm business are different

and the absolute numbers will have less relevance. This section has been divided into

three areas to answer the following questions:

• What financial impact does an outbreak of each pest have on the case study

farm?

• What are the economic differences between non-IPM and IPM treatments on

the various pests?

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• What are the financial implications of non-IPM practices when the chance of

secondary pest outbreaks is considered?

5.1 What financial impact does an outbreak year of each pest have on the case

study farm?

These results focus on assessing the economic impact on the case study in the event

of an outbreak of a particular pest. So, it is the average season profits compared to

an outbreak season profits where the treatments of ‘no treatment’, non-IPM and the

IPM are used. Essentially, it demonstrates the cost to the case study farm of an

outbreak and provides an indication of the economic impact.

Redlegged Earth Mite

Table 5 illustrates the differences in the annual whole farm profit between the three

treatments.

Table 5: Whole farm profit difference in the year of a Redlegged Earth Mite

infestation

Annual financial loss

% of

profits

No treatment $156,250 42%

Non-IPM treatment $750 0%

IPM treatment $7,925 2%

Observations:

• When a Redlegged Earth Mite outbreak occurs, the estimated loss in profits with

‘no treatment’ is $156k, which is significant. This represents a 42% fall in

profitability from an average season.

• The non-IPM method had the smallest business decline of $750. This method

provided almost total economic protection to the farm.

• The IPM method of control resulted in a profit fall of $7,925 or 2% of profits.

While this method did not provide the best economic result, it did provide a

significant economic protection to the business when compared to the No

Treatment option.

Slugs

Table 6 illustrates the financial impact of slugs on the case study farm in the year of

infestation.

Table 6: Whole farm profit difference in the year of a Slug infestation


% of

profits




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Observations:

• These significant losses in profits are largely driven by the expected crop loss

from each of the treatments, where the IPM treatment is expecting the least

crop loss.

• The greatest economic loss occurs when ‘No Treatment’ is used, with an

estimated drop in profit of $74,560 or 20% of profits.

• There is a significant economic difference between the methods, where the IPM

treatment gives the best economic result, followed by the non-IPM treatment

and then No Treatment.

Lucerne Flea

Table 7 shows the result of the whole farm assessment in the year of a Lucerne Flea

outbreak.

Table 7: Whole farm profit difference in the year of a Lucerne Flea infestation


% of

profits




Observations:

• The economic impact of the case study farm’s profitability is minimal.

• In the year of an outbreak of Lucerne Flea, the best economic option appears to

be the non-IPM treatment.

• The profit losses from Lucerne flea appear to be similar between the No

Treatment and IPM treatment

Blue Oat Mite

Table 8 shows the result if an infestation of Blue Oat Mite were to occur. These

results are very similar to Red-Legged Earth Mites.

Table 8: Whole farm profit difference in the year of a Blue Oat Mite infestation


% of

profits




Observations:

• If no treatment is used, there is a 42% profit reduction on this case study farm.

• The best economic control of Blue Oat Mite is non-IPM, where profit loss of $750

is minimal.

• IPM also provides significant protection of profits when an outbreak occurs as it

is estimated profits would drop by only 2%.

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Balaustium Mite

Table 9 indicates the estimated economic effect given an outbreak of Balaustium

Mite. While this mite is also often misdiagnosed as Redlegged Earth Mite, not a lot is

known about its control.

Table 9: Whole farm profit difference in the year of a Balaustium Mite infestation


% of

profits




Observations:

• If Balaustium Mite were to occur, the economic impact on the case study farm is

minimal. The best treatment is estimated to be non-IPM as the losses of $2,500,

were minimal.

• While Balaustium Mite can occur, there is no significant difference between the

treatments.

Earwigs

Table 10 shows the estimated economic impact given an outbreak of Earwigs.

Table 10: Whole farm profit difference in the year of an Earwig infestation


% of

profits




Observations:

• The profit damage is largely driven by the relative yield loss in canola that occurs

with each treatment.

• In a bad earwigs year and if there is no treatment, this case study farm’s profit is

estimated to drop by $49,925, or 14%.

• The best economic treatment for earwigs is the IPM treatment, which minimises

the financial loss.

• Non-IPM, although providing a better economic outcome than ‘No treatment’, is

a significantly poorer economic option than using the IPM treatment.

Diamondback Moth

Table 11 shows the estimated economic impact in a season where Diamondback

Moth is an issue.

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Table 11: Whole farm profit difference in the year of a Diamondback Moth

infestation


% of

profits




Observations:

• This table indicates there is a 64% reduction in profits if there is No treatment,

which indicates Diamondback Moth can have significant economic impact on the

case study farm.

• The best economic method for Diamondback Moth control is IPM, where in a

year of outbreak, the loss of profit is minimized to an estimated $45,550 or 12%

of the profits.

• There is a significant economic difference between the IPM and non-IPM

treatments, with IPM being the better.

Canola Aphid

Table 12 indicates the estimated results given an outbreak of Canola Aphid.

Table 12: Whole farm profit difference in the year of Canola Aphid infestation


% of

profits




Observations:

• It is estimated an 8% profit decline if No treatment of Canola Aphid is used and

there is an outbreak, which is significant.

• Both non-IPM and IPM treatments provide an economic benefit for control, but

there is no significant difference between these two treatments.

Summary

Table 13 provides a summary of the effects on the case study farm’s profits given the

year of a pest infestation. The main observations are:

• The pest with the greatest economic damage is the Diamondback Moth,

which can cause an estimated 64% drop in profitability given No treatment.

This is followed by a 42% drop in a Redlegged Earth Mite and Blue Oat Mite

infestation, 20% profit drop from slugs and 14% profit drop from earwigs.

• Generally, there was little economic difference between the non-IPM and

IPM treatments. This indicates that if farmers were concerned about

20 | P a g e

chemical use (non-IPM treatment), they could use IPM treatments with little

economic loss compared to the non-IPM treatment.

Table 13: Summary of the impact on the case study farm’s profits given the year of

infestation and treatments.

Pest Impact on whole farm profit in year of infestation

Treatment Type $ loss % loss

Redlegged Earth Mite No treatment $156,250 42%

Non-IPM $750 0%

IPM $7,925 2%

Slugs No treatment $74,560 20%

Non-IPM $47,784 13%

IPM $20,130 5%

Lucerne Flea No treatment $6,250 2%

Non-IPM $510 0%

IPM $7,925 2%

Blue Oat Mite No treatment $156,250 42%

Non-IPM $750 0%

IPM $7,925 2%

Balaustium Mite No treatment $6,250 2%

Non-IPM $2,500 1%

IPM $3,050 1%

Earwigs No treatment $49,925 14%

Non-IPM $35,750 10%

IPM $6,050 2%

Diamondback Moth No treatment $234,375 64%

Non-IPM $62,625 17%

IPM $45,550 12%

Canola Aphid No treatment $31,250 8%

Non-IPM $7,000 2%

IPM $7,000 2%

5.2 What are the economic differences between non-IPM and IPM treatments on

the various pests?

The previous section estimated the profit decline caused by individual pest

infestation in the year of an outbreak. An analysis like this does not consider the

frequency of outbreak. For example, it was estimated that Diamondback Moth

outbreaks occur 1 in 14 years, whereas Earwig outbreaks can occur each year. This

section looks at the weighted profit effect to the case study farm.

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In doing this analysis the ‘control’ was the profit made by the case study farm if ‘No

Treatment’ was used. So, in the case of Diamondback Moth, 1 year in 14 suffered the

loss and 13 years in 14 did not. This allows a weighted whole farm profit to be

estimated for the ‘No treatment’ option. This is then compared to weighed option

for non-IPM treatment and the IPM treatment.

Redlegged Earth Mite

It was determined that severe Redlegged Earth Mite outbreak occurs 3 years in 20.

Taking into account this probability, the annual income saved when compared to the

‘No-treatment’ option is shown in Table 14.

Table 14: Whole farm profit difference compared to ‘no-treatment’ given the

frequency of outbreak across time

Weighted profit gain % of profits

Non-IPM treatment $23,325 7%


Observations:

• The weighted economic effect on the case study farm is estimated to be

about 6-7%, which is significant.

• This result indicates it is economically worth treating for Redlegged Earth

Mite, although there appears no significant economic difference between the

non-IPM and IPM treatments.

Slugs

It was determined that Slug outbreak can occur each year. The results provided in

Table 15 give the weighted average improvement in profit compared with the No

Treatment method for slugs.






Observations:

• The best economic method is IPM where it is estimated that the weighted

profit improvement compared to No Treatment is $18,143, or 5% of profits.

• It would appear that the IPM treatment provided a significantly improved

economic result than the non-IPM treatment.

Lucerne Flea

It was determined that Lucerne Flea was prevalent each season. The weighted profit

comparison results for the control of Lucerne Flea are shown in Table 16.

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IPM treatment -$838 0%

Observations:

• The use of non-IPM is the treatment method with the most positive impact

on profitability, but both methods provide only a small impact on profits. This

is mainly due to Lucerne Flea’s relatively small impact on canola yields.

Blue Oat Mite

It was determined that severe Blue Oat Mite outbreak occurs 3 years in 20. Table 17

indicates the weighted profit comparisons for the control of Blue Oat Mite.






Observations:

• These results indicate there is an economic benefit for controlling Blue Oat

Mite, estimating a 6%-7% protection of case study profits.

• While the non-IPM treatment provides the best economic protection from

Blue Oat Mite, it is not significantly better than that provided by the IPM

method.

Balaustium Mite

It was determined that severe Balaustium Mite outbreak occurs 1 years in 10. Table

18 gives the estimates of the weighted effect on profit for controlling Balaustium

Mite.





IPM treatment $320 0%

Observations:

• The weighted profit impact by Balaustium Mite is minimal with no significant

difference between the treatments of non-IPM and IPM. This is because the

impact of this pest on Canola yields is insignificant.

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Earwigs

It was determined that Earwigs are present each season. Table 19 provides the

weighted profit increase by using non-IPM and IPM methods for Earwigs.






Observations:

• The weighted profit impact by using IPM to control earwigs is significant, as it

is the best economic treatment giving a 14% profit improvement to the case

study farm.

• While non-IPM treatment is economically useful, it does not provide the best

economic control method.

Diamondback Moth

Table 20 provides the weighted profit increase by using non-IPM and IPM

treatments. It is anticipated that Diamondback Moth only occurs in infestation

numbers 1 in 14 years.






Observations:

• While the economic damage caused by Diamondback Moth can be

significant, its low frequency of occurring means its control only provides

minimal impact on the case study’s profitability. The profit improvement is

estimated to be between 3% - 4%.

• There appears to be no significant economic difference between the non-IPM

and IPM treatments.

Canola Aphid

Table 21 provides the weighted profit increase by using non-IPM and IPM

treatments. It is anticipated that Canola Aphid occurs in outbreak numbers 1 in 10

years.

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Observations:

• With only an estimated 1% saving of profits, it is debatable whether it is

economically worth controlling Canola Aphid.

• There is no significant economic difference between these two treatments of

Canola Aphid control.

Summary of the weighted profitability difference

Table 22 illustrates the annual weighted case study profit, comparing the treatments

of non-IPM and IPM with No Treatment.

Table 22: Weighted profit comparison of non-IPM and IPM treatments against No

Treatment

Pest & Treatment Type

Probability of occurrence

Annual increase in profit % of profits

Redlegged Earth Mite Non-IPM $23,325 7%

3 in 20 years IPM $22,249 6%

Slugs Non-IPM $8,925 3%

1 in 3 years IPM $18,143 5%

Lucerne Flea Non-IPM $2,870 1%

1 in 2 years IPM -$838 0%

Blue Oat Mite Non-IPM $23,325 7%

3 in 20 years IPM $22,249 6%

Balaustium Mite Non-IPM $375 0%

1 in 10 years IPM $320 0%

Earwigs Non-IPM $14,175 4%

Yearly IPM $43,875 14%

Diamondback Moth Non-IPM $12,268 3%

1 in 14 years IPM $13,488 4%

Canola Aphid Non-IPM $2,425 1%

1 in 10 years IPM $2,425 1%

given probability of occurrence

Effect on profit against ‘No-treatment’,

25 | P a g e

Observations:

• It would appear that the control of Earwigs, Redlegged Earth Mites, Slugs and

Blue Oat Mites provide the best economic benefit to the case study farm.

• The choice of non-IPM or IPM treatment for most of these pests results in

little economic difference. The exceptions were Slugs and Earwigs, where the

IPM treatment provided the best economic choice for control.

• Only in the control of Lucerne Flea was the non-IPM treatment economically

better, but the overall improvement on profits from controlling Lucerne Flea

was minor.

5.3 What are the financial implications of non-IPM practices when the impact of

secondary pest outbreaks is considered?

One of the major issues separating the use of non-IPM and IPM treatments is that

the control of one pest species using broad-spectrum insecticides may drive greater

population growth in other pest species. This increases probability of other pest

species reaching infestation levels and causing secondary pest outbreaks. The IPM

treatment aims to maintain beneficial populations in-field so that outbreaks of other

pests species are less likely to occur. It is very difficult to measure this using scientific

methods, so the expert opinion from the workshop group was used. Table 4 provides

a record of this opinion and has been repeated in Table 23.

The economic method for assessment involved the following steps:

1. Start with the estimated weighted profit increase when using the non-IPM

treatment

2. Take away the estimated annual cost of a secondary pest outbreak,

multiplied by the increase probably of frequency.

For example, follow the calculations for the non-IPM treatment of Redlegged Earth

Mites:

• The weighted profit improvement from controlling Redlegged Earth Mite is

$23,325

• The increased frequency of Lucerne Flea outbreak is 1.5; multiply this by the

annual economic cost of $750

• The increased frequency of Balaustium Mite outbreak is 1.5; multiply this by

the annual economic cost of $2,500

• = 23,325 – ((1.5 x 750)+(1.5 x 2,500))

• = 18,824

The estimated weighted profit improvement for using IPM to control Redlegged

Earth Mite is $22,249, which can now be compared to the non-IPM treatment. This

gives rise to an increased frequency of Lucerne Flea and Balaustium Mite, giving an

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Secondary Outbreak Red Legged Slugs Lurcerne Blue Oat Balaustium Earwigs Diamondback Canola IPM Treament Non-IPM

Primary Outbreak Earth Mite Flee Mite Mite Moth Aphid with increased probability

Profit increase Profit increase

Red Legged Earth Mite 1.5 1.5 22,249 18,824

Slugs 0.5 18,143 -14,967

Lucerne Flee 1.2 1.1 1.5 1.5 -838 -59,897

Blue Oat Mite 1.5 1.5 22,249 18,824

Balaustium Mite 2.0 1.5 2.0 2.0 320 -75,303

Earwigs 43,875 14,175

Diamondback Moth 1.2 1.2 13,488 -53,473

Canola Aphid 1.5 1.4 1.7 2,425 -225,764

estimated weighted profit result of $18,824. So, the IPM treatment provides an

improvement on this profit of $3,425, or a 15% improvement in economic benefit.

Table 23 indicates these calculations for the matrix of increased probabilities.

Table 23: The economic result from the increase in secondary pest outbreaks

expected with the use of the non-IPM treatment compared with the IPM treatment.

NB. A number of 2.0 indicate a pest infestation is twice as likely to occur.

Observations:

• The increased likelihood of other pest outbreaks changed the economic

results significantly in favour of the non-IPM treatment.

• These results also call into question controlling some of the less important

pests such as Canola Aphid, which does not cause significant economic loss

by itself. However, using the non-IPM treatment for Canola Aphid

significantly increases the frequency of slugs, earwigs and Diamondback

Moth which do cause significant yield and financial loss.

• The IPM treatment becomes the economic treatment of choice to control all

of the pests assessed.

• Increasing the frequency of Earwigs, Slugs and Diamondback Moth outbreaks

has significantly increased the economic cost of controlling pests by using

non-IPM treatment.

Conclusion

This ‘systems analysis’ approach to economic research is challenging, as it takes both

known research results and expert opinion into consideration when modelling the

results. Given that this case study farm is based on the high rainfall area of

Winchelsea and not all pest control relationships are known, this study will not

represent most farms. However, it does provide valuable insight into assessing the

economic impact of pest control treatments. The following observations are made:

• All pests studied showed that there was an economic incentive to having

some form of control. However, some did cause greater economic loss than

others.

• When looking at an annual pest outbreak, the greatest economic losses in

order of economic damage are from Diamondback Moth, Redlegged Earth

Mite, Blue Oat Mite, Slugs and Earwigs. The other pests of Lucerne Flea,

Balaustium Mite and Canola Aphid did not cause significant economic loss.

27 | P a g e

• When taking into account the frequency of pest outbreaks across time, the

order of economic impact of these pest changes to Redlegged Earth Mite,

Blue Oat Mite, Earwigs and Diamondback Moth. In most pests studied, there

was no significant economic difference between using the non-IPM and IPM

treatments. The exceptions were earwigs and slugs, where non-IPM proved

to give the better economic protection.

• When assessing the increased probability of secondary pest outbreaks

resulting from the use of non-IPM treatment, the use of the IPM treatment

becomes the preferred economic treatment for all pests studied in this

analysis.

• Future direction should include undertaking similar studies in other regions

and rainfall area as pest population and balanced do differ, as well at

production and costs on farm. This will provide greater insight into the

interaction between whole farm economics and pest management.

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Attachment 1

Major pests for farmers in the Winchelsea area

season important pests climatic and agronomic factors that encourage their build up frequency of occurring consequenes if left untreated recommended control methods

Aut/winter Redlegged earth mites

cool/wet winters, good early season break, long-term pastures, (NB slow

crop growth in autumn/winter acentuates damage potential) regular

high - loss of crop seedlings, large parts of

crop lost completely

timerite, broad-spectrum insecticides, paddock

grazing the previous spring, seed treatments

Aut/winter Blue oat mites cool/wet winters, good early season break, long-term pastures regular


crop lost completely broad-spectrum insecticides, seed treatments

Aut/winter Lucerene flea cool/wet winters, use of SPs, prior pastures, clay soils patchy

medium - loss of crop seedlings, some parts

of crop lost largely organophosphates and seed treatments

Aut/winter Slugs wet summers, high stubble residues, minimum/no cultivation patchy


crop lost completely baits, burning, cultivation, rolling, crop rotations

Late wint /Spring Canola aphids

warm/dry spring, few beneficials, green bridge, mild winter, moisture

stressed plants patchy

low/medium - highly variable. Often little

yield loss

insecticides, allowing beneficials to build-up,

control green bridge

Late wint /Spring Cereal aphids

warm/dry spring, few beneficials, green bridge, mild winter, moisture

stressed plants patchy

low/medium - highly variable. Often little

yield loss

insecticides, allowing beneficials to build-up,

control green bridge

Aut/winter Cockchafers long-term pastures, no cultivation, soils with high organic matter patchy


of crop lost cultivation, some seed treatments

Aut/winter Balaustium mites pastures, cool/wet winters regular


of crop lost limited, high rates of SPs

Aut/winter Bryobia mites mild autumn and winters, green bridge patchy


of crop lost broad-spectrum insecticides

Aut/winter Earwigs high stubble residues, minimum/no cultivation patchy


of crop lost cracked wheat baits, burning, removing stubble

Aut/winter Millipedes high stubble residues, minimum/no cultivation patchy


of crop lost burning, removing stubble,

Late wint /Spring Native budworm wet winters in inland Australia, northerly spring weather systems patchy

medium/high - loss of yield, grain quality

penalties mostly synthetic pyrethroids

Late wint /Spring Diamondback moth green bridge, dry winters, warm/dry spring

periodic (every 2-4

years)

medium/high - defoliation, reduced seed

yield and size (reduced seed weight and

size) Insecticides, beneficials

Documents

Whole Farm Economic Assessment of IPM for a …1 | P a g e Whole Farm Economic Assessment of IPM for a Case Study Farm at Winchelsea, Vic. Pilot NIPI Workshop held in Melbourne GRDC