Select Economic Implications for the Biological Control of Arundo donax along the Rio Grande



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Arundo donax, or giant reed, is a large, bamboo-like plant native to Spain that has invaded several thousand acres of the Rio Grande riparian in Texas. The plant grows to 18-24 feet, consuming large quantities of water per acre per year. With concern of increased water demands in the Texas Lower Rio Grande Valley region, the United States Department of Agriculture-Agricultural Research Service (USDA)ARS) is investigating four herbivorous insects as potential biological control agents for Arundo donax to facilitate increased water supply. This study examines select economic implications for agricultural water users in the United States of applying these biological control agents along the Rio Grande. The research includes (a) estimating the value of the water saved due to the reduction of Arundo donax, (b) a benefit-cost analysis, (c) regional economic impact analysis, and (d) an estimate of the per-unit cost of water saved over a 50-year planning horizon (2009 through 2058). The model ArundoEcon is used to perform a deterministic analyses using low- and high-marginal-composite acre values. Regional results indicate present values of farmlevel benefits ranging from $97.80 to $159.87 million. Benefit-cost ratios are calculated with normalized prices and range from 4.38 to 8.81. Sensitivity analyses provide a robust set of results for Arundo water use, replacement species water use, Arundo expansion rate after control, value of water, and the cost of the program. The pre-production processes and farm-gate economic impact analysis is estimated using multipliers from the IMPLAN model. Regional results reveal a range of $8.90 to $17.94 million annually in economic output and 197 to 351 new jobs for the year 2025. Further results show the cost per acre-foot of water saved is $44.08. This amount is comparable to other projects designed to conserve water in the region. The USDA)ARS, Weslaco, Texas Arundo donax biological control project realizes positive results for the benefit-cost ratios, economic impact analyses, and competitive results for the per-unit cost of saving water. These positive results indicate this project will have positive economic implications for the U.S. and the Texas Lower Rio Grande Valley.