Economic Implications of Biological Control of Arundo donax in the Texas Rio Grande Basin

ABSTRACT Arundo donax, or giant reed, is a large, bamboo-like plant that is native to Spain and has invaded several thousand acres of the Rio Grande riparian zone in Texas and Mexico. The plant grows to over 26 feet tall, and consumes large quantities of water, estimated as an amount equivalent to about 11% of irrigation water diverted by Valley irrigation districts (i.e., some estimates are more than 5.5 acre-feet per acre). 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 selected 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 analyses, (c) regional economic impact analyses, 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 baseline deterministic analyses using low- and high-value irrigated composite acre values. That is, the saved water is initially valued based on being applied to agriculture as irrigation. Since the actual crop mix irrigated with the saved water is unknown, a range is provided by assuming all irrigated crops are “low-value,” and then again by including both “lowvalue” and “high-value” irrigated crops. Results of the water amount saved are 2/9 of the amount consumed, or approximately one acrefoot of water for each acre of Arundo. For each acre-foot of water saved, 1.85 dryland acres can be converted to low-value crop acres, and 0.71 can be converted to high-value crop acres. Regional economic results indicate a present value of farm-level benefits ranging from $98 to $160 million. Benefit-cost ratios are calculated with normalized prices and indicate a range from 4.38 to 8.81. Sensitivity analyses provide a robust set of results for Arundo agricultural water use, effectiveness of control agents, 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 analyses are estimated using multipliers from the IMPLAN model. Regional results reveal a range of $9 to $18 million annually in economic output and 197 to 351 jobs associated with the increase in gross revenues due to the control of Arundo donax for the year 2025. Values for other select years are also provided. Further results suggest a life-cycle cost per acre-foot of water saved of $44. This amount is comparable to other projects designed to conserve water in the region. The USDA)ARS, Weslaco, Texas Arundo donax biological control project will realize positive results as indicated by the benefit-cost ratios, economic impact analyses, and competitive results for the per-unit cost of saving water. These results indicate this project will have positive economic implications for the U.S. and the Texas Lower Rio Grande Valley.