Risk and Maximum Residue Limits: A Study of Hops Production

Ruojin Zhang, Thomas Marsh and David Gent

Journal of Agricultural Science, 2015, vol. 7, issue 5, 85

Abstract: This paper examines how maximum residue limits (MRLs) affect the optimal choice by growers of chemical applications to control pests and diseases. In practice, growers who export balance both yield risk and pesticide residue uncertainty when making chemical application decisions. To address these issues we specify an expected utility model and calibrate it to data collected from a 2012 survey of hop growers in the Pacific Northwest. Then we simulate hop grower/exporter decisions subject to MRLs across a myriad of scenarios. As anticipated, risk preferences contribute to explaining higher chemical use. All else equal, more stringent MRLs tend to induce risk averse growers to apply fewer chemicals than do risk neutral growers because of the increasing likelihood of crop rejection due to exceeding an MRL. Under specific circumstances risk preferences coupled with underlying MRLs have the potential to tip the decision towards less chemical uses with potential for more growers implementing integrated pest management strategies or, alternatively, greater use of other pesticides not subject to MRL restrictions.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ccsenet.org/journal/index.php/jas/article/download/45092/25607 (application/pdf)
https://ccsenet.org/journal/index.php/jas/article/view/45092 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibn:jasjnl:v:7:y:2015:i:5:p:85

Access Statistics for this article

More articles in Journal of Agricultural Science from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().