An Economic Assessment Of Removing The Partial U.S. Import Ban On Fresh Mexican Hass Avocados
AbstractThe importation of fresh Hass avocados from Mexico into the United States has been restricted, totally or partially, since 1914 on grounds of the potential risk of pest infestation. This quarantine has been a cause of dispute between the Mexican and U.S. governments. In 1997, Hass avocados from approved orchards in the State of Michoac�n, Mexico, were permitted to be imported during the months of November through February into 19 northeastern states plus the District of Columbia. In 2001, the import period was extended to October 15 through April 15, and access was granted to 12 additional states. Currently there is a proposal to remove all seasonal and geographic restrictions on the importation of fresh Hass avocados from Mexico. The purpose of this research is to assess the potential economic impacts of removing the partial import ban. A static, partial equilibrium model is constructed to analyze impacts of removing the partial import ban on Mexican avocados. Two scenarios are considered: one with population and real per-capita income held constant (short run) and one that allows growth in population and real per-capita income over five years (long run). When population and real income are held constant, removal of the partial import ban leads to an increase in avocado imports from Mexico of 102.72 million pounds (267% increase). The increased competition from Mexican avocados results in welfare losses for both Californian and Chilean avocado producers of $84.5 million and $8.5 million respectively. Conversely, consumers in the United States gain from greater availability of avocados and lower prices. The gain in equivalent variation for US consumers is $115.3 million resulting in a net welfare gain of $30.8 million for the US. For the long-run scenario, population and real per-capita income are allowed to grow at their recent historical annual averages for five years. A five-year period is chosen to match the biological lag between planting and fruit bearing for avocados and is assumed to be the time period required for avocado producers to fully adjust to any price changes. The resulting increase in the aggregate demand for avocados significantly reduces the impact on Californian and Chilean producers of removing the partial import ban on Mexican avocados. While imports from Mexico increase by 161.4 million pounds, Californian avocado production decreases by only 14.4 million pounds and exports from Chile increase by 2.5 million pounds. The loss in producer surplus for Californian producers is $9.4 million, while the net US welfare gain is $33.2 million. While it appears likely that the removal of the partial import ban on Mexican avocados will hurt Californian producers, growth in demand for avocados will mitigate a great deal of the potential losses. Regardless of the magnitude of the growth in demand, consumers in the United States will benefit from a greater availability of avocados at lower prices. The gain in consumer welfare more than offsets the loss in producer welfare.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number 19938.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arndt, Channing & Hertel, Thomas W, 1997. "Revisiting "The Fallacy of Free Trade."," Review of International Economics, Wiley Blackwell, vol. 5(2), pages 221-29, May.
- Roberts, Donna & Orden, David, 1995. "Determinants of Technical Barriers to Trade: The Case of US Phytosanitary Restrictions on Mexican Avocados, 1972-1995," 1995: Understanding Technical Barriers to Agricultural Trade Conference, December 1995, Tucson, Arizona 50709, International Agricultural Trade Research Consortium.
- Romano, Eduardo & Thornsbury, Suzanne, 2007. "Economic Evaluation of SPS Regulations: Where Can Progress be Made?," Staff Papers 36946, Michigan State University, Department of Agricultural, Food, and Resource Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.