1 Predicted economic impact of Black Sigatoka on the Australian banana industry David C. Cook 1 , Shuang Liu, Jacky Edwards, Oscar Villalta, Jean-Philippe Aurambout, Darren J. Kriticos, Andre Drenth and Paul J. De Barro Abstract While Australia has lifted its outright ban on banana imports into the country, very strict quarantine measures are still in place that make it prohibitively expensive for foreign suppliers to land product in Australia. Strict though these import requirements are and small though the risk of exotic banana disease may be, the potential damage that could be caused to the domestic banana industry by some diseases is potentially huge. It follows that the potential food security benefits of policies designed to mitigate these risks are also large. In this paper we provide quantitative estimates of these potential damages and discuss the implications for Australia’s acceptable level of protection using the example of black Sigatoka. In doing so, we provide an important piece of information that has so far been lacking in calls to lower quarantine barriers further. That is, the extent to which industry losses can be considered “acceptable” by policy makers and the community. Introduction Risk perception is difficult to reconcile, particularly in relation to invasive species incursion events. The Australian banana industry has often been portrayed as having a pessimistic view of risk related to pests and diseases potentially introduced by trade leading to the imposition of highly-restrictive phytosanitary measures on imports, to the detriment of domestic banana consumers (James and Anderson, 1998; Javelosa and Schmitz, 2006). But, comparatively few studies have focused on the pests and diseases of concern to the industry and how the welfare of producers is likely to change over time as incursions spread across growing regions. When the dynamics of possible incursions have been considered, the maintenance of trade barriers has been shown to be justified, at least in the short term, to allow domestic banana producers time to adjust to post-trade production environment (Leroux and Maclaren, 2011). However, to date a comprehensive epidemiological model has not been used to support or refute these findings. Bananas are an important crop throughout the world, particularly in developing countries where their importance as a food crop is only surpassed by rice, wheat and maize (Food and Agriculture Organization, 2010; Henderson et al., 2006; Heslop-Harrison and Schwarzacher, 2007). More than 120 countries produce bananas, with world production estimated to be in excess of 100 million tonnes (Food and Agriculture Organization, 2010). Australia contributes less than 0.5 per cent of global production (Food and Agriculture Organization, 2010), but banana cultivation makes a sizeable contribution to regional economies across northern Australia. As Table 1 shows, in 2010 the States of Queensland, New South Wales, the Northern Territory and Western Australia produced a combined total of 301 450 tonnes of bananas with a gross value of Aus$492.2 million (ABS, 2011). 1 Department of Agriculture and Food Western Australia; Cooperative Research Centre for National Plant Biosecurity; The University of Western Australia; Australian Centre for Biosecurity and Environmental Economics. Email: david.cook@agric.wa.gov.au