Why farmers consider pesticides the ultimate in crop protection: economic and behavioral insights

Alain Carpentier and X. Reboud

No 277528, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: The observed dependence of current crop production on chemical crop protection is largely due to economic and technological factors. High yield and specialized cropping systems require high crop protection levels and pesticides allow achieving such protection levels at reasonable (private) costs. The main aim of this article is to show that behavioral factors may reinforce the effects of these economic and technological factors on farmers considering pesticides the ultimate in crop protection. Choice mechanisms described by K?szegi and Rabin (2007) imply that individual attitudes toward a given risk are endogenous in the sense that they depend on the best available means to cope with this risk. Building on this extension of Prospect Theory, we show that farmers exhibit strong aversion toward crop health risks when pesticide prices are relatively low. Indeed, the cheaper the pesticides, the higher the crop protection levels farmers refer to when considering pesticide sprays, and the more they feel that choosing low crop protection levels entails unacceptable risk taking. Our analysis also suggests that pesticide prices play a more important role in farmers crop protection choices than previously recognized. In particular, we show that pesticide taxes would unambiguously reduce farmers pesticide uses, by reducing pesticide profitability as well as farmers aversion toward crop health risks. Acknowledgement :

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-agr and nep-upt
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:277528

DOI: 10.22004/ag.econ.277528

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