Hurricanes and invasive species: the economics and spatial dynamics of eradication policies

Citrus canker was established in Florida in the 1990s. The disease causes losses of yield and closure of some export markets. The U.S. government introduced an eradication policy in which growers are required to remove infected trees and receive compensation payments for doing so. Recent hurricanes have spread the disease and re-established it. This chapter examines the economic impacts of citrus canker in oranges and the eradication policy in Florida, taking into account the relationship between costs and benefits of eradication and the spatial and dynamic aspects of infestation. We evaluate both the costs of the disease and the benefits from eradication. In this evaluation we consider the implications of a future hurricane, which spreads citrus canker, for the decision about whether to adopt a strategy of eradicating initially, or after the hurricane, or both. We find that producers as a group benefit from both the disease and the eradication program, but at the expense of taxpayers, consumers and the nation as a whole. Producers benefit at the expense of consumers because both the disease and the policy to eradicate it reduce supply and drive up the price and the gross value of production. Producers also benefit at the expense of taxpayers, who pay to compensate them for their losses for having to remove trees under the eradication polic