Estimating the economic costs and mitigation of rice blast infecting the Malaysian paddy fields

Abstract

Rice is a vital staple to Malaysians, and the fungus, Magnaporthe oryzae, can cause rice blast. The fungus proliferates rapidly, can devastate paddy fields, and persists in areas where rice is grown. Consequently, a partial equilibrium model is modified and extended to study the economic impact of this fungus on paddy. The model includes the largest grown commodities of Malaysia’s agriculture and predicts agricultural prices, domestic consumption, exports, imports, production, and land use between 2020 and 2065 in 5-year increments. The results indicate that the rice blast spreading 5,000 hectares per year can completely devastate Malaysia’s paddy fields by 2048. Although paddy is Malaysia’s third-largest grown commodity, real agricultural output falls only by 1.0%. Meanwhile, the rice price spikes by a factor of five while employment drops 89.0% in 2048. Therefore, the loss of the paddy fields adversely impacts Malaysian agriculture. Two policies are examined. First, the model allows landowners to convert infected paddy fields into oil palm plantations. The land conversion increases real agricultural output but the rice price and employment losses remain high. Second, paddy farmers regain productive paddy fields by paying an annual treatment cost to control the fungus. The real agricultural output, the rice price, and paddy employment partially recover as compared to the base scenario without the rice blast.