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Random Inspections Reveal Import Risks - Amber Waves September 2009

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					                                                                                                                                              MARKETS AND TRADE

                     F I N D I N G S




                        Random Inspections
                        Reveal Import Risks
VOLUME 7 • ISSUE 3




                                                                                                                                     James Tourtellotte, U.S. Customs and Border Protection




                           Between 1998 and 2007, U.S. agricultural imports increased in         subject to less scrutiny and fewer inspections. Regular and more
                      value by 70 percent, U.S. wildlife imports jumped 108 percent, and         rigorous random inspections of selected cargo and passengers can
                      foreign passenger arrivals in the U.S. rose 80 percent. While providing    reveal which pathways are riskier.
                      many benefits, increased trade and travel raise the risk of imported             ERS researchers, using data from USDA’s Animal and Plant Health
                      foods, plants, and wildlife bringing non-native agricultural pests and/    Inspection Service on cargo inspections and a variety of risk and
  2                   or pathogens into the U.S.                                                 uncertainty scenarios, developed a model to determine the optimal
                           Border inspection of passengers and cargo is the frontline in         number of random inspections and the most effective allocation of
A M B E R WAV E S




                      comprehensive risk management. The U.S. Customs and Border                 inspection resources at a given port. Model results showed that more
                      Protection branch of the U.S. Department of Homeland Security              frequent random inspections of seemingly low-risk cargoes and pas-
                      inspects passengers and most cargoes for invasive species at ports-        sengers may enable inspectors to identify when low-risk pathways
                      of-entry. Cargo inspections, however, can slow supply chains and           might become more high-risk. To reduce uncertainty about which
                      damage perishable goods. Passenger inspections cause inconvenient          pathways are high risk, ports can devote greater resources to random
                      delays. Therefore, inspectors primarily concentrate on the riskier         inspections in cases when the inspection track record is short and
                      “pathways” (the commodity origin and passenger origin upon which           therefore uncertain.
                      risk analysis is based). Other, less risky pathways into the U.S. are           The variable nature of import risk points to the benefits of
                                                                                                 continually updating the underlying knowledge of the riskiness of

                     U.S. agricultural and wildlife imports and number of passengers             different pathways and periodic reallocations of inspection effort and
                     increased in 1998-2007                                                      resources. Inspecting a portion of all passengers and cargo pathways,
                      9                                                                          including those presumed to be less risky, might reveal underlying
                      8
                      7                                                                          risks across pathways that were previously unknown.
                          Foreign passenger arrivals
                      6   (in 10s of millions)                                                   Peyton Ferrier, pferrier@ers.usda.gov
                      5
                                                                                                 Michael Springborn
                      4
                      3 Agricultural imports
                                                                                                 This finding is drawn from . . .
                      2 (in 10s of billion of U.S. dollars)
                                                                 Wildlife imports
                      1                                                                          “Illicit Agricultural Trade,” by Peyton Ferrier, in Agricultural
                                                                 (in billions of U.S. dollars)
                      0                                                                          and Resource Economics Review, 37(2): 1-10, 2008.
                     1998    99    2000      01     02      03     04      05      06       07
                     Source: USDA, Economic Research Service analysis of data from USDA's
                     Animal and Plant Health Inspection Service, U.S. Census Bureau, and U.S.
                     Fish and Wildlife Service.

                                                                                                                     ECONO MIC RESE ARCH SERVICE / USDA

				
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