Introduction

There are around 500 commercial companies globally producing nearly 350 invertebrate biological control agents (van Lenteren et al. 2017). These companies produce arthropod predators and parasitoids, and entomopathogenic nematodes for the control of arthropod pests in agriculture, horticulture and forestry. The global market for commercial invertebrate biological control agents (BCAs) increased from US$40 million in 1995 to US$190 million in 2003 (Office of Technology Assessment 1995; Guillon 2004). In 2015 the combined global value of invertebrate and microbial BCAs was about US$1.7 billion (van Lenteren et al. 2017). Europe, followed by North America, remain the largest markets for commercially produced invertebrate BCAs but markets are growing in other regions such as Latin America and Africa (van Lenteren et al. 2017). For example, demand from exporters for commercial BCAs in South Africa and Kenya has led to the establishment of new commercial producers of invertebrate biological control agents (Cherry and Gwynn 2007). The growth in market value, combined with the growing numbers of commercial BCAs and their suppliers, indicates that the practice of augmentative biological control is expanding (Cock et al. 2010; Pilkington et al. 2010; van Lenteren et al. 2017). Some of the underlying reasons for expansion of the commercial biological control industry include development of insect resistance to pesticides, increased consumer awareness about the impact of pesticides on the environment and human health, export market regulations regarding pesticide residues, retailer demands for residue levels below minimum legal requirements, and changes in funding policy towards pesticide use (Cherry and Gwynn 2007; Pilkington et al. 2010; van Lenteren et al. 2017).

The first Australian commercial producer of invertebrate BCAs was established in 1971 to produce one BCA for control of red scale on citrus (Furness et al. 1983). By 2002 the industry had grown to nine companies producing 21 BCAs (Llewellyn 2002). When this investigation was conceived in 2010, there were still nine companies in operation so there had been no apparent growth of the industry since 2002. The value of the Australian market for commercial BCAs had never been estimated so there were no data available to determine if the market value had increased, as it had elsewhere during this period. There should be potential for expansion of Australian commercial producers of invertebrate BCAs because the annual value of agricultural crops to the Australian economy increased from AU$15.5 billion in 2002–2003 to AU$25 billion in 2010–2011 (Australian Bureau of Statistics 2004, 2012). Australian agriculture is also subject to the development of insecticide resistance (Herron et al. 2001) and consumer demands for reduced pesticide usage (Rowland 1998; Premier and Ledger 2006). These factors have led to increased use of commercial BCAs in other countries (van Lenteren and Bueno 2003; Warner and Getz 2008; van Lenteren 2012). What has prevented Australian commercial producers of invertebrate BCAs from following a similar growth pattern to other equivalent industries?

In this study our first objective was to describe the history and current status of commercial producers of invertebrate BCAs through interviews with the owners of all nine Australian companies. The second objective was to explore potential barriers to expansion of commercial production of invertebrate BCAs in qualitative terms from three perspectives: the commercial industry itself, the end-users (i.e., growers), and researchers involved in pest management. We focused on citrus growers and researchers working with the citrus industry because citrus crops were the first in Australia to be targeted for development of a commercial BCA and use of commercial BCAs in citrus continues to this day. The third objective was to develop recommendations to encourage growth of Australian commercial producers of invertebrate BCAs.

Materials and methods

All interviews were performed in accordance with the ethical standards of the University of Sydney Human Research Ethics Committee (approval protocol numbers 13,278 and 14,675). When first approached for interview, each respondent was given a cover letter, a participant information statement that explained the purpose of the study, and a consent form for signature. Interviews were conducted only when the participant had given informed consent. There were 27 interviews with nine owners of companies producing invertebrate BCAs commercially, nine citrus pest management researchers and nine citrus growers. All interviews took place from 2011 to 2013 and were conducted by M. Begum either in person (15 interviews) or by phone (12 interviews). There were 23 male and three female participants (note that one participant was interviewed twice because of his dual role within the industry). The female participants were all citrus pest management researchers. Participants came from different states, namely New South Wales, Victoria, Queensland, Western Australia and South Australia.

All nine Australian company owners, who were also members of the Australasian Biological Control Association Inc., were interviewed for this study. A publication search was used to recruit researchers who were either currently active in citrus pest management or had previous experience in this field (on average, these researchers had over 20 years of pest management experience). Seven were from government research organisations and one was from a university. One company owner was interviewed a second time because this key informant had also engaged in citrus pest management research. Citrus growers (seven farm owners and two farm managers) were recruited for interviews through the company owners, Citrus Australia Ltd. and industry consultants. The interviews were semi-structured with the interviewer guiding a conversation based on a flexibly applied interview protocol. Interviews lasted for about an hour, sometimes longer. Initial questions were broad and open-ended with follow-up or probing questions seeking detail on the issues raised and those of importance to the study. Pilot interviews were conducted with colleagues, i.e., not study participants, to refine the protocol prior to being conducted on the target population. Different interview pro-formas were developed for the company owners, citrus pest management researchers and citrus growers. The company owners’ pro-forma considered the history of the owners’ involvement in the industry. Their opinions about the social, political, biological and technical barriers facing the industry were questioned. Quantitative data were collected on the economic situation of the companies such as set up costs, products, customers and sales. The pro-forma for researchers covered areas such as integrated pest management (IPM), augmentative biological control (commercial BCAs) and the Australian commercial BCA industry. Qualitative data were collected from this group. The pro-forma for growers was based on areas such as economic, technological and institutional information relating to pest management, growers’ perceptions of biological control and demographic information i.e., age, gender, level of education. Quantitative data were collected regarding the economic situation of each farm and grower demographics while the remaining data were qualitative.

The interviews were recorded and then transcribed using Express Scribe software (Express Scribe version 5.55© NCH). Before analysis, the transcribed text of the appropriate interview was sent to each interviewee for approval. If necessary a follow-up telephone call, email or website check was made to clarify the interview responses. During the process of conducting and transcribing the interviews, themes emerged from the data that informed the subsequent analysis. These themes were further developed and added to during, and after, the process of coding the transcriptions using NVivo 10.0 text analysis software. Structural coding was followed (Namey et al. 2008). The coded data were then categorised according to emerging themes where the meaning of responses was consistent and unambiguous. Through this process, all examples of each theme were pulled together so that the results could be interpreted for that theme. Data were aggregated and identifying information removed to maintain anonymity.

Results

Development and current status of Australian commercial producers of invertebrate BCAs

The first two commercial producers of invertebrate BCAs in Australia were established ten years apart (in 1971 and 1981) to produce parasitoids for control of the red scale Aonidiella aurantii (Maskell), in citrus crops. These two companies are still operating today and now produce multiple species of commercial BCAs along with other pest management products. From 1991 to 2002, seven more companies producing invertebrate BCAs were established, based primarily on production of a predatory mite to control the two-spotted spider mites Tetranychus urticae Koch, in fruit and vegetable crops. This period of expansion was driven by development of insecticide resistance in Australian populations of the two-spotted spider mite. The Australasian Biological Control Association was founded in 1992 to support development of the industry and encourage collaboration. The number of Australian companies producing invertebrate BCAs remained static from 2002 until 2010. From 2010 to 2014 the industry went through a period of change with one company closing, and two company mergers taking place. By 2014 there were five Australian companies that mass-reared invertebrate BCAs for commercial sale, plus one company with a focus on IPM support services that also engaged in non-commercial rearing of BCAs for research and training purposes. The number of commercial BCA species available in Australia has increased steadily since the industry began (Fig. 1) with 31 species produced in 2011 and 36 species by 2014 (a current species list of predators, parasitoids and nematodes is available from http://www.goodbugs.org.au/). The leading biological control agents in terms of sales for the Australian market were two predatory mites, Neoseilus cucumeris (Oudemans) and Phytoseiulus persimilis Athias-Henriot, to control thrips and mites, and the parasitoids Aphytis spp., to control red scale. The majority of arthropod BCA species were produced by just two of the five companies and a third company focused entirely on nematode BCAs. Financial constraints and biosecurity concerns were identified as barriers to development of new commercial BCAs for the Australian market. Biosecurity is a significant issue for Australian producers of invertebrate BCAs because Australia imposes stringent regulations on the importation of new species to prevent harmful environmental impacts. This greatly increases the cost of introducing new BCAs that are not already present in Australia. In some cases movement of BCAs across interstate boundaries within Australia may also face barriers if there is a risk of accidentally moving unwanted species from one state to another, e.g., through host material associated with the BCA.

Fig. 1
figure 1

Number of species produced for use as commercial biological control agents in Australia from 1975 to 2010

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In 2011 Australian commercial producers of invertebrate BCAs employed 43 full-time and about seven part-time people. The majority of Australian companies had 1–6 full-time employees and only two companies employed more than ten people. The number of employees engaged in the Australian industry reflects the size of the commercial BCA market, which had estimated gross sales below AU$10 million for the financial year 2010–2011. Approximately 4500 clients used commercial BCAs in 2011 and 99% of commercial BCAs were applied to horticultural crops: tomato, capsicum, eggplant, cucumber, strawberry, blueberries, watermelon, rockmelon, brassicas, corn, macadamia, pome and stone fruits, bananas, avocados, flowers and ornamentals. Australian commercial producers of invertebrate BCAs now support pest management in many different crops beyond the initial focus on citrus.

Participants reported recent sales growth but this was driven by existing clients who had increased their cropping area rather than the acquisition of new clients. New clients will be essential for continued industry growth, which can only be achieved through investment in effective extension activities and marketing to encourage adoption of commercial BCAs. All commercial BCAs produced in Australia were sold to the domestic market. Existing companies are unlikely to develop export markets in the near future due to biosecurity regulations that restrict the export of live organisms from Australia. These regulations do not wholly prohibit export of invertebrate BCAs but do increase costs for commercial producers due to the time and effort required to obtain export permits. Furthermore, the comparative geographic isolation of Australia from other potential markets leads to long transport times and increases the risk that BCAs will either die in transit or arrive in poor condition. Potential areas for expansion are growth in horticulture and especially in protected cropping systems and the organics market. Australian crop production is dominated by field crops where commercial BCAs are less likely to be used for pest control. Participants recognized that protected cropping systems (greenhouses) are an important market for commercial BCAs, and while greenhouse crops are only a small proportion of Australia’s total crop area, they are expected to grow rapidly. Very few, if any, commercial BCAs were sold to organic certified growers despite the apparent suitability of commercial BCAs for organic production but the reasons for this lack of adoption by organic growers remain unclear.

Economic barriers to expansion

Australian commercial producers of invertebrate BCAs face some risks that are common across the global industry, such as disease outbreaks in their mass-rearing facilities, equipment failures leading to loss of production, and seasonal bottlenecks in demand for their products. The cost of establishing a new commercial company to produce invertebrate BCAs is very high in Australia as it is elsewhere. There are some challenges, however, that are unique to the Australian industry. Arguably their biggest challenge is the cost of bringing a new commercial BCA into the market. Commercial BCA producers everywhere need to invest money and time into development of new BCAs but the Australian industry must also navigate stringent biosecurity regulations if they want to import a new BCA. To avoid these regulations, the majority of commercial BCAs available in Australia are either native species or exotic species that established accidentally before being taken up by commercial producers. Some agents were introduced deliberately first for classical biological control and subsequently taken up by commercial producers to supply crops where the agent either did not establish or could not maintain consistent populations (e.g., in greenhouses). Collaboration with research institutions or universities to share costs is one strategy used by the industry to develop new BCAs. Recent examples of this strategy are the parasitoids of silverleaf whitefly and fruit spotting bugs.

Protection of intellectual property was an issue raised by company owners. Nematode BCAs available in Australia are subject to patent protection but this is not the case for any of the arthropod BCAs. Company owners that produced arthropod BCAs considered the patent process to be expensive, time consuming and unnecessary for the industry. They believe that the complexity of their production systems and other technologies offered more protection of their intellectual property than patents. Competition between commercial producers of invertebrate BCAs was also a concern. This may reflect the market dominance of one BCA against spider mites in terms of total sales, so the companies are competing primarily for sales of just one product. Meanwhile, the majority of other arthropod BCAs are produced by one company, which holds a monopoly on those species, as does the one company that specializes in nematode BCAs.

Barriers to grower adoption

Adoption of any new pest management strategy carries an element of risk to the grower. Adoption of commercial BCAs is information intensive, which can be a significant barrier for growers, because a lack of information increases their perception of risk. For example, the citrus growers commented that it was very hard to find out which species were the right commercial BCAs for pest control in their crops. Information and recommendations for insecticide use were easier for growers to find and insecticides easier to use on their farms compared to commercial BCAs. This is reflected in insecticide sales (AU$413.1 million in 2011–2012, Deloitte Access Economics 2013) being 40 times the gross value of sales of BCAs in Australia (less than AU$10 million). Climatic conditions can affect the performance of commercial BCAs and some participants identified this as a risk factor that reduced adoption by growers. Access to extension services and/or pest management consultants may bridge the information gap. However both company owners and researchers were concerned that these service providers themselves needed education about commercial BCAs. Few Australian company owners offered consultancy services to support customers in their use of commercial BCAs so there is a clear gap in the extension process for this pest management strategy. A lack of industry visibility compounds the gap in extension services to hinder adoption further. Potential customers are spread over an enormous geographic area throughout Australia but the commercial producers of invertebrate BCAs are located in only four out of the eight Australian states and territories. The industry has made a strong effort to establish a web presence (http://www.goodbugs.org.au/) to overcome this visibility problem and to increase customer access to their services and products. The logistics of delivering live material to clients rapidly over long distances so that there is no loss of quality in transit remains a challenge for the industry.

An important change to the citrus industry was noted by researchers. All Australian horticultural industries, including citrus, have become more export oriented during the last two decades. The target destination of a grower’s crop is likely to influence their pest management choices. For example, the American export market expects blemish-free produce which usually requires insecticide use. In contrast, the European market requires low pesticide residues so a grower targeting this market has a stronger incentive to adopt commercial BCAs.

Discussion

North American commercial production of invertebrate BCAs began in the 1950s (Dietrick 1981) and by 2010 had grown to 22 companies with about 200 employees (Warner and Getz 2008), representing about 10% of the global market (Cock et al. 2010). European commercial production of invertebrate BCAs has expanded even more rapidly since its beginnings in 1968, with its largest company employing about 600 people in 2011 (van Lenteren 2012) and has now expanded to about 1400 employees (van Lenteren et al. 2017). Europe represents about 75% of the global market of US$200–260 million for invertebrate BCAs and has the widest range of commercial BCAs available (van Lenteren 2012; Tracy 2014) with more new agents being introduced to the market (van Lenteren et al. 2017). The dominance of high value greenhouse crops has had a strong influence on the size and value of the European market for commercial BCAs compared with other regions (Hajek 2004; Pilkington et al. 2010). Invertebrate BCAs used in protected crops contribute about 80% of the European market value (van Lenteren et al. 2017). Increased use of hydroponic systems in Australia, especially in the tomato industry, is one factor that may encourage greater use of commercial BCAs in future (Taig 2009). It is clear, however, that the Australian industry, which began in 1971, has not grown at the same rate as the European or North American industries.

Strategies and opportunities to overcome economic barriers to expansion

Australian commercial producers of invertebrate BCAs cannot replicate some aspects of the European and North American industries that have supported industry expansion. For example, access to multiple countries with few barriers to movement of live BCAs has enabled one European company to conduct business in several countries and sell commercial BCAs in 45 different countries (Warner and Getz 2008; van Lenteren 2012). The Australian industry is expected to remain confined to the domestic market and there are no clear pathways to expand beyond Australia. It is also unlikely that greenhouse production will ever be as dominant in Australia as it is in Europe, although some growth is possible.

A key expansion strategy lies in collaborative projects to develop new BCAs that target significant pests, particularly those pests that have limited options for insecticide use. Australian commercial producers of invertebrate BCAs are already working on this strategy. For example, the parasitoid Eretmocerus hayati Zolnerowich was introduced to Australia first as a classical biological control agent for silverleaf whitefly, a pest with a strong history of insecticide resistance (De Barro and Coombs 2009). Now this parasitoid has been developed into a commercial BCA (https://bugsforbugs.com.au/product/eretmocerus-hayati/). A second example is the control of fruit spotting bugs, Amblypelta spp., which had relied on the insecticide endosulfan (now deregistered, Australian Pesticides and Veterinary Medicines Authority 2010). A collaborative research project led to development of a native egg parasitoid as a commercial BCA for this pest (BioResources 2013). The challenge for Australian commercial producers of invertebrate BCAs will be to identify future opportunities for similar collaborative projects. One potential opportunity is commercial development of parasitoids to target Queensland fruit fly, Bactrocera tryoni (Cameron), following abandonment of the Fruit Fly Exclusion Zone on the border of New South Wales and Victoria (Agriculture Today 2010; NSW Department of Primary Industries 2012).

There is a natural tension in the Australian industry between the desire to protect intellectual property and compete for customers versus the need to collaborate within the industry in order to raise capital for investment in new BCAs or in new strategies to encourage grower adoption of commercial BCAs. The larger European and North American industries have invested in patent protection for commercial BCAs (Bera 2009; Javier et al. 2010). It is not yet clear that such investment would lead to economic benefits for the Australian industry, where companies are competing for a relatively small pool of existing customers and a few companies have a monopoly on certain BCAs. Recent mergers between several Australian companies may be another way to raise capital for future investment. In the long term a collaborative approach may prove more fruitful for industry growth, at least until the size of the Australian market has increased substantially beyond its current value (<AU$10 million). This includes not only collaboration with other stakeholders to develop new BCAs but also collaborative efforts to raise awareness about the role of commercial BCAs as part of IPM for crop production.

Strategies and opportunities to increase grower adoption

Industry visibility and delivery logistics were recognized as potential barriers to adoption of commercial BCAs in Australia. In contrast to the European industry, the North American industry more closely resembles the Australian industry in that a small number of companies service a large geographic area. These challenges have led the North American industry to develop retail networks so that growers in North America usually buy commercial BCAs from these retail outlets (Warner and Getz 2008). The retail network increases the visibility and accessibility of the industry while still maintaining economies of scale through centralised mass-rearing facilities to produce the BCAs. If some of the Australian companies can raise sufficient capital, development of a retail network may be a viable option.

Access to specific information about commercial BCAs and more general information about IPM was another recognized barrier to grower adoption in Australia. The decision to adopt IPM and associated strategies such as use of commercial BCAs is largely dependent on access to extension services and information (Malone et al. 2004; Kaine and Bewsell 2008). In many countries commercial producers of invertebrate BCAs provide consultancy services to growers to support their use of commercial BCAs (Steiner and Goodwin 2007). In North America retail outlets for commercial BCAs may also give consultancy services (Warner and Getz 2008). The Australian industry is collaborating now to develop a new IPM accreditation scheme for crop consultants and growers (http://www.goodbugs.org.au/ipmlogo.html) that will provide education on the use of commercial BCAs as part of IPM for different crops. This scheme should encourage grower adoption of commercial BCAs by making information more accessible and increasing confidence in the effectiveness of commercial BCAs. At the same time, this scheme is intended to raise consumer awareness of IPM as a desirable pest management strategy by allowing certified growers to display an IPM logo on their produce. Market pressure to reduce insecticide use encourages grower adoption of alternative pest management options such as commercial BCAs (van Lenteren 2012; van Lenteren et al. 2017). It is important to note, however, that the Australian industry needs a better understanding of the adoption process for Australian growers across different crops. This study was focused primarily on commercial producers of invertebrate BCAs and did not investigate grower adoption in depth although there has been an associated study of adoption by citrus growers (Begum 2016).

A potential opportunity exists for the Australian industry in organic production systems because national and international guidelines recommend the use of parasitoid and predator commercial BCAs for pest control in organic crops (Horne 2007; Neeson 2007; Zehnder et al. 2007; Madge 2009). Presumably Australian organic growers rely currently on conservation biological control and/or organic certified insecticides for pest control (Furlong et al. 2004; Warner and Getz 2008; Macfadyen et al. 2009). The retail value of the Australian organic market was estimated to be at least AU$1.7 billion in 2014 (Mascitelli et al. 2014). An outreach program targeting organic growers could be incorporated into the new IPM accreditation scheme to reach this potential market and encourage organic growers to consider adoption of commercial BCAs.

In conclusion, Australian commercial companies producing invertebrate BCAs have expanded for the first 30 years of their existence but are now experiencing a period of consolidation. The initial expansion of the industry reflected not only demand for commercial BCAs but also the substantial investment of capital, time, expertise and labour made by the individuals who first established these companies. The recent concentration of the Australian industry into just five companies reflects more than the costs of doing business in a limited market—it reflects significant barriers to continued growth. Future expansion of the industry in terms of increased sales, new BCAs or even new companies, will require more capital investment, more research collaborations and new extension strategies to overcome economic barriers and to encourage grower adoption of commercial BCAs.