Dynamic general equilibrium analysis of improved weed management in Australia's winter cropping systems

A recent analysis indicated that the direct financial cost of weeds to Australia’s wintergrain sectorwas approximately $A1.2bn in 1998–1999. Costs of thismagnitude representa large recurring productivity loss in an agricultural sector that is sufficient to impactsignificantly on regional economies.Using amulti-regional dynamic computable generalequilibrium model, we simulate the general equilibrium effects of a hypothetical successfulcampaign 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 reducedyields 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 diminishingbenefit in succeeding years. At the national level, there is a welfare increase of $700m indiscounted net present value terms. The regions with relatively high concentrations ofwinter crops experience small temporary macroeconomic gains.