Somatic Cell Nuclear Transfer (SCNT) is a laboratory technique that involves transferring the nucleus of a somatic (body) cell into an egg cell that has had its own nucleus removed. This technique`s primary application, represented by option 3, is the reproductive cloning of animals, with the most famous example being Dolly the sheep. The cloned organism is a genetic copy of the donor somatic cell.

Option 1 suggests that SCNT is used for the production of biolarvicides. This is incorrect because biolarvicides are generally produced through genetic manipulation in bacteria, not via SCNT.

Option 2 implies that SCNT is used for creating biodegradable plastics. This is not true; biodegradable plastics are typically produced with plant substances or through microbial fermentation, not animal cloning techniques.

Option 4 proposes that SCNT produces disease-free organisms. While it`s conceivable that SCNT could potentially be used in developing gene therapies to prevent diseases, the technique doesn`t inherently make organisms disease-free. This process does not ensure absolute safeguard against all types of diseases either. Therefore the correct answer is indeed option 3, reproductive cloning of animals.