Cost Effectiveness of MAF's Interventions
MAF's purpose and outcomes cover a broad mandate and range of activities, with interventions ranging from policy advice and assistance, to regulatory standard development, and enforcement.
The development of MAF's new purpose statement with its emphasis on sustainable development is intended to focus on what is a very diverse set of portfolios, and help MAF concentrate on those interventions contributing most to New Zealand's interests in these areas.
Developing robust cost effectiveness measures for the sorts of public service roles MAF, along with many other government departments, undertakes is difficult. To do so requires a good understanding of:
- The benefits being achieved by a set of interventions, especially in the sustainable development area, which are not easily assigned a dollar value - environmental benefits for example.
- The fiscal and wider economic costs associated with what MAF does. The broader economic costs are particularly important given the scope of MAF's regulatory responsibilities, and the fact these cover all imports and many exports, the primary sector, and all food production and sale.
- Alternative approaches which may achieve similar outcomes.
In practice, there are usually well understood reasons for an intervention (e.g. biosecurity to protect New Zealand from pests and diseases, quota export regulation to protect access to export markets), but these benefits are often not quantified (or easily quantifiable). Case studies, such as the recent review of the economic consequences of the Clover Root Weevil are undertaken as input into policy and regulatory decision-making.
The direct fiscal costs of interventions are known and given cost recovery from industry, it is particularly important MAF gets the cost attribution right. However, the economic consequences, or deadweight loss, are harder to identify on an ongoing basis, and are more likely to be revealed by specific studies. In 2005 for example, MAF commissioned a review of the economic compliance costs of border biosecurity - found to be $80-$125 million per annum, which was equal to about one percent of the total value of goods imported.
Ongoing policy development looks for alternative or better ways to achieve an outcome. For example, the biosecurity risks associated with sea containers crossing the border were recognised and an import health standard was implemented to manage the risks of this pathway. Inspection requirements with which importers need to comply relate to container arrival, transportation and subsequent unloading of containers and cargo at transitional facilities in order to manage these risks.
One-off studies and assessments are useful for assessing the costs, benefits and outcomes of what MAF does. Over the next three years, however, MAF aims to build more regular, outcome-related performance indicators into its normal planning and reporting processes. MAF will use these in turn to assess where it should best direct efforts to ensure the sustainable development of New Zealand's biological resources.
Contact for Enquiries
Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0738
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