The aim of this article is to estimate the risk imposed by Karnal bunt and then to explore the economic impact of both quarantine as control measure, and of regulation concerning Karnal bunt, on the South African wheat industry. This disease occurred in South Africa for the first time during the 2000/01 wheat production season on a farm near Douglas in the Northern Cape. The economic impact of various control measures and regulations with regard to Karnal bunt can be assessed by means of an efficiency analysis using a cost-benefit approach. It was found to be economically acceptable to implement quarantine on the Douglas area in only a “worse case” scenario. In all other scenarios it did not made any economic sense to impose a quarantine on the Douglas area.