Giant reed, Arundo donax L., is a large, bamboo-like plant native to the Mediterranean region. It has invaded several thousand hectares of the Rio Grande riparian habitat in Texas and Mexico. The United States Department of Agriculture-Agricultural Research Service (USDA-ARS) is investigating four herbivore insects as potential biological control agents for giant reed. One of the most important reasons for targeting this invasive weed is to reduce its impact on available water supplies, especially in the Rio Grande Basin. This study examined selected economic implications of this program for agricultural water users in the U.S. The research included (a) estimating the value of the water saved (to agricultural purposes) by reduction of giant reed, (b) benefit-cost analyses, (c) regional economic impact analyses, and (d) an estimate of the per-unit life-cycle cost of water saved during a 50-year planning horizon (2009 through 2058).
Positive results related to the benefit-cost ratio, economic impact analyses, and competitive results for the per-unit life-cycle cost of saving water are associated with the biological control project for giant reed. The benefit-cost ratio, calculated with normalized prices, indicates $4.38 of benefits for every dollar of public investment. According to 2009 results for the economic impact analyses, economic output is $22,000, value-added is $11,000, and no employment is supported by the water savings from giant reed. Additionally, the per-unit cost of water saved is $44.08, a value comparable to other projects designed to increase water supply for the region. These results indicate this program will have positive net economic implications for the U.S. and the Lower Rio Grande Valley of Texas.