Fungicide Cost Reduction with Soybean Rust-Resistant Cultivars in Paraguay: A Supply and Demand Approach

Yuki Ishikawa-Ishiwata and Jun Furuya
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Yuki Ishikawa-Ishiwata: Global and Local Environmental Co-Creation Institute, Ibaraki University, 2-1-1 Bunkyo Mito, Ibaraki 310-8512, Japan
Jun Furuya: Social Sciences Division, Japan International Research Center for Agricultural Sciences, 1-1 Owashi Tsukuba, Ibaraki 305-8686, Japan

Sustainability, 2021, vol. 13, issue 2, 1-14

Abstract: Soybean rust (SBR) is one of the most serious diseases for Paraguay’s economy. To avoid excessive financial losses due to SBR, farmers utilize fungicides. Increasing fungicide costs are, therefore, becoming a threat to farmers’ incomes. Developing SBR-resistant cultivars is a possible solution to this problem. To investigate the effects of SBR-resistant cultivars on soybean farmers in Paraguay, we constructed a model for the supply and demand of soybeans considering yields, cultivated area, changes in the stock quantity of soybeans, exports of soybeans and soybean products, feed demand for soybean cake and price linkage functions. We established three scenarios: an SBR pandemic in which fungicides become ineffective (Scenario 1) and the adoption of SBR-resistant cultivars in 33% (Scenarios 2) and 75% (Scenarios 3) of cultivated areas. The estimation of these three scenarios demonstrates that SBR-resistant cultivar adoption will significantly reduce current fungicide costs for farmers by 112–253 million United States dollars (USD). The potential benefits of the widespread dissemination of SBR-resistant cultivars are also considered in terms of economic disparities and environmental risks. To establish a more sustainable agricultural industry, earlier dissemination of such cultivars is required.

Keywords: soybean rust (SBR); SBR-resistant cultivars; cost savings; fungicide application; small farmer; soybean market (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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