©CAB International – for Steven Naranjo 4 Economic Value of Arthropod Biological Control STEVEN E. NARANJO1*, GEORGE B. FRISVOLD2 AND PETER C. ELLSWORTH3 1USDA-ARS, Arid-Land Agricultural Research Center, Maricopa, AZ, USA; 2Department of Agricultural and Resource Economics, University of Arizona, Tucson, AZ, USA; 3Department of Entomology, University of Arizona, Maricopa Agricultural Center, Maricopa, AZ, USA Integrated pest management (IPM) is the strategic control are very low, successful programmes have integration of multiple control tactics resulting in the resulted in essentially permanent pest control with amelioration of pest damage that takes into consid- very favourable economic outcomes (Cock et al., eration environmental safety, and the reduction of 2015; Naranjo et al., 2015). risk and favourable economic outcomes for growers A second approach – augmentative biological and society at large. For thousands of years, natural control – involves the initial (inoculation) or enemies of pests have been harnessed for crop pro- repeated (inundation) introduction of native or tection (Simmonds et al., 1976). Maximizing this exotic natural enemies to suppress pest populations. source of natural control is a foundational element Augmentative biological control has been widely in IPM for suppressing the growth of incipient pest and successfully deployed in many parts of the populations (Stern et al., 1959). Biological control world. It is perhaps most well known in protected has been defined as the purposeful use of natural agricultural production, particularly in Europe and enemies, such as predators, parasitoids and patho- in developing regions such as China, India and gens, to regulate another organism’s populations to Latin America (van Lenteren et al., 2017). The com- lower than average levels (DeBach, 1974). Recent mercial industry built around this approach to pest and broader perspectives of biological control stress control validates its economic viability in some the inclusion of direct and indirect ecological inter- production systems and regions of the world. actions that result in the suppression of target organ- Finally, conservation biological control involves isms causing harm to humans or their resources manipulation of the environment in such a way that (Heimpel and Mills, 2017). the suppressive forces of resident natural enemies Three broad approaches to biological control are on pest populations are maximized. Conservation generally recognized. Introductory (classical) bio- biological control may broadly include tactics that logical control primarily focuses on exotic pest spe- lessen negative impacts on resident natural enemy cies and attempts to provide permanent management populations resulting from insecticide applications of pests by introducing natural enemies from the or involve precise engineering of the agricultural native region of the pest (DeBach, 1964). These environment to encourage the presence, abundance introductions endeavour to re-establish upper and activity of natural enemies (Barbosa, 1998; trophic level links that effectively suppress the pest Landis et al., 2000). The few studies available sug- species in its native environment. Although the prob- gest that conservation biological control has the abilities of success for this approach to biological potential to provide significant economic value in * E-mail: [email protected] © CAB International 2019. The Economics of Integrated Pest Management of Insects 49 (eds D.W. Onstad and P.R. Crain) ©CAB International – for Steven Naranjo crop protection. Natural biological control, as the needed to spur greater adoption and investment in name implies, happens independent of any inten- research and implementation. tional intervention and often operates silently in the background without notice. It is largely the founda- Concepts and Methods tion of conservation biological control. That only a tiny fraction of all arthropods are pests is, in part, Approaches to studying the economic impacts of due in large measure to natural biological control biological control can vary by their scale and scope. (DeBach, 1974). Broad estimates show that natural Farm-level studies are often concerned with whether control provided through biological control services it would be profitable for farmers to adopt biologi- (trophic regulation of populations) is valued at cal control practices. Studies at a commodity scale $619/ha across multiple biomes (all values in 2018 or larger regional scale consider whether producers US$; Costanza et al., 1997) with biological control as a group might benefit from biological control in croplands estimated at $36/ha (Pimentel et al., programmes and how benefits are divided among 1997). Further estimates suggest that natural bio- sellers and buyers of agricultural commodities. More logical control of native USA crop pests is valued at comprehensive benefit–cost analyses consider, for about $5.95 billion (Losey and Vaughan, 2006). example, the return on public investments in larger- Some evidence suggests this is a very conservative scale adoption of conservation biological control or estimate, as the value of biological control of a sin- implementation of introductory biological control gle pest of soybean (Glycine max) in four programmes. The number and types of benefits and Midwestern US states has been valued at $280 mil- costs estimated differ. Farm-level studies often nar- lion annually (Landis et al., 2008). Overall, biologi- rowly focus on farm profits, while more compre- cal control potentially provides among the highest hensive benefit–cost analyses may consider a wider returns on investment available in IPM even while array of environmental (and other social) benefits estimation of its economic value has received rela- and costs. Estimation methods and data require- tively little attention from entomologists, ecologists ments also vary by scale and scope. or economists (Naranjo et al., 2015). The economic value of biological control, and Measuring farm-level impacts general approaches for its estimation, have been discussed and summarized in several excellent Farm-level studies often narrowly focus on how reviews (Headley, 1985; Carlson, 1988; Tisdell, adoption of biological control practices affect 1990; McFadyen, 1998; Gutierrez et al., 1999; measures of farm profitability, while ignoring Perkins and Garcia, 1999; Hill and Greathead, broader economic impacts at larger market scales 2000; Cullen et al., 2008; Waterfield and Zilberman, or economic valuations of environmental impacts. 2012; Naranjo et al., 2015). A central tenet in IPM Despite the narrow focus on farm profits, such is that pest management strategies should provide information is critical. Growers are ultimately the for economically efficient and sustainable solutions ones making choices about whether or not to (Chapters 1 and 9). Thus, a better understanding of implement biological control programmes, either the economic contribution of biological control, as individually on their own farms or through partici- a foundational element of IPM, will help strengthen pation in more regional programmes like introduc- adoption of this tactic for IPM more generally, and tory biological control. Practices that are not raise its stock among stakeholders and those that profitable stand little chance of being adopted or invest in this technology both privately and publicly. financially supported by growers. Estimates of The goal of this chapter is to build upon the review farm-level benefits are important precursors to suc- of Naranjo et al. (2015) by providing more detail cessful extension programmes aimed at encourag- on the concepts and methodologies of economic ing adoption of biological control methods. valuation in biological control, to summarize all A common method of estimating farm-level known projects that have attempted to quantify the impacts of biological control is the partial budget- economic value of arthropod biological control ing approach. Here, farm revenues and costs are (with particular focus on introductory and conser- reported, usually on a per hectare basis. For exam- vation biological control), and to ask how we bal- ple, revenues and costs are compared across farms ance the need for more routine and inclusive or experimental plots adopting biological control economic evaluations with the additional effort versus those following more conventional practices. 50 S.E. Naranjo, G.B. Frisvold and P.C. Ellsworth ©CAB International – for Steven Naranjo Gross revenues are primarily affected via changes in Because these studies consider effects on entire mar- yields, although the quality or grade of production kets and not just on individuals, effects on commodity could affect revenues through changes in prices that prices are important considerations. One can consider growers receive. The costs considered can vary. how producers as a group are affected. Successful Some approaches only compare differences in direct biological control can increase yields, reduce input insecticide costs (e.g. costs of materials and applica- costs or both. This may lead to an expansion of tion). Other factors such as production costs (e.g. agricultural production sales. While growers may for labour, other inputs) might also change. benefit from lower costs and higher sales volumes, The partial budgeting approach has been the work- this increased supply can also drive down the mar- horse of most of the extant studies attempting to value ket prices they