Pesticide Use and Pesticide Policy in the Netherlands

US Pesticide use and pesticide policy in the Netherlands An economic analysis of regulatory levies in agriculture A.J. Oskam, H. van Zeijts, G.J.Thijssen ,G.A.A . Wossink and R. Vijftigschild Wageningen ]J Agricultural University 199 2 CIP-GEGEVENS KONINKLIJKE BIBLIOTHEEK, DEN HAAG A.J. Oskam, H. van Zeijts, G.J. Thijssen, G.A.A. Wossink and R. Vijftigschild Pesticide use and pesticide policy in the Netherlands: an economie analysis of regulatory levies in agriculture / A.J. Oskam, H. van Zeijts, G.J. Thijssen, G.A.A. Wossink, and R. Vijftigschild. - Wageningen : Agricultural University. - (Wageningen economic studies ; 26) Lit., index. ISBN 90-6754-232-6 NUGI 689 Keywords : Pesticides, economic analysis, regulatory levies © No part of this publication, apart from bibliographic dataan dbrie f quotations embodied in critical reviews, mayreproduced ,re-recorde d or published inan yfor m includingprint , photocopy, micro form, electronic of electromagnetic record,withou t written permissionfro mth epublishe r Pudoc, P.O. Box 4, 6700 AA Wageningen, the Netherlands. Printed in the Netherlands Preface This study resulted from a research project financed by theMinistr y of Housing, Health and Environment, and theMinistr y of Agriculture, Nature Management and Fisheries. The main part of the research was donejointl y with DHV-consultants of Amersfoort. After finishing the report "The feasibility of a system of incentive charges on pesticides for the agricultural sector" (inDutc h with a summary in English), we felt thata further study and documentation ofpesticid e usean dpesticid epolic y in theNetherland s and theprinciple s of aregulator y levy would be interesting, for various reasons. In many countries, increasing attention is being paid to the environmental impacts of pesticide use. This is one of the reasons for examining the policies and research results in other countries. Although thepresen t study concentrates on theeconomi caspect s of regulatory leviesi ti scertainl y notlimite d totha t subject. Because of the attention to the 'technical side' of pesticides and agricultural production, it might be considered a multidisciplinary study, with economics as the main discipline. We decided to publish our results in English, to ensure we reach an international audience. Various people from different backgrounds kindly reviewed drafts of this book or particular chapters. We thank P. van Tilburg, H. Naber, A. Emmerman, A. Dubgaard, S. Rude, A.F. van der Wal, M.A. de Waard and J.C. Zadoks for their comments. Of course, the authors remain responsible for the contents of this book. The Departments of Agricultural Economics and of Farm Management of Wageningen Agricultural University collaborated in this research project. In addition to the authors, several persons contributed to thefinal result . A.J. Aaltink, A. de Buck, W. deJong , J. Rus and L. Verschueren wrote MSc theses on subjects contained in this research project. Chapters 5 and 6 draw on their findings. W. van de Vendel helped make the database used in Chapters 2 and 9. A large part of the text was translated by Mrs. A. Kooijman-Timmers; Mrs. J. Burrough-Boenisch revised the translation and edited the English text. H. Smit assisted in making the computer program for the income calculations in Sections 8.3., 8.4 and 8.5. J. Bijkerk drew the figures. The final typing and layout of the text was done by Mrs. A. de Vries and Mrs. O. Hitters; R. Aalpol of Pudoc advised us on these matters. We thank them all for their important contribution. Abstract Oskam, A.J., H. van Zeijts, G.J. Thijssen, G.A.A. Wossink and R. Vijftigschild, 1992. Pesticide use and pesticide policy in the Netherlands: an economic analysis of regulatory leviesi nagriculture .Wageninge nEconomi cStudie s26 ,Wageninge n Agricultural University, Wageningen, (xi) + 155 pages, 53 tables, 12 figures, 1 scheme, 5 appendices, 127 references, summary. This study gives a broad overview of the use and application of pesticides in the Dutch agricultural sector. Compared with surrounding countries, pesticide application in Dutch arable farming and horticulture is very high, mostly because the production systems are intensive. The data used in the study are from a database partly compiled from an inventory study related toth eLong-ter m CropProtectio n Plan (LCPP) for theNetherlands . The targets of Dutch pesticide policy and the instruments available to implement this policy are explained. Pesticide usean dpolic y in Sweden andDenmar ki sanalysed , and information and research results for some other European countries are also presented. The main purpose of the study is to derive the level a regulatory levy needs to be to reach the targeted reductions in pesticide use formulated in the LCPP. A chapter on theory, discussing wayso finvestigatin g howprice saffec t pesticideus eprecede s thechapter sdevote d to the empirical research. Two different approaches have been used in this study: an econometrically estimated model, based on observed behaviour in thepas tan d representative LP models that enable the effects of new technologies to be studied. These two models led to substantial differences in the levy that will be necessary to reach targeted levels by the year 2000. The range is about 25 to 100 guilders per kg of active ingredient. The income effects for different types of farms and different parts of the agricultural sector are derived. The estimated income effects are smaller than those estimated in the LCPP. Aswel l as considering a policybase d on reducing thevolum eo f pesticide use this study also considers apolic yo f banning theus eo fcertai n compounds.Th einfluenc e of thelatte rpolic y would be substantial, unless substitution of banned pesticides by remaining ones is possible or new pesticides are introduced. vi CONTENTS page Preface v Abstract vi Contents vii List of tables ix List of figures xi List of schemes xi 1 Introduction 1 2 Pesticide use: extent and problems 5 2.1 Introduction 5 2.2 Volume and structure of the use of pesticides 5 2.3 Trends in pesticide use in arable farming 13 2.4 Problems with current use 17 2.5 Government policy 29 2.6 Position of the agricultural sector and initiatives it has taken 25 2.7 Conclusions 26 3 Theoretical approaches to explain the use of pesticides 28 3.1 Introduction 28 3.2 General theoretical approach 29 3.3 Threshold models 32 3.4 Input-output relations at crop level and choices at farm level 35 3.5 Neoclassical production theory 37 3.6 Risk models 40 3.7 Concluding remarks 46 4 Experiences and research results 47 4.1 Introduction 47 4.2 Levies and the Swedish crop protection policy 47 4.3 Results of Dutch research related to prices of pesticides 54 4.4 Results of Danish research on pesticide use 56 4.5 Results of German research on pesticide use 59 4.6 Discussion and conclusions 62 5 Economic analysis with econometric models 64 5.1 Introduction 64 5.2 Specification of the model 64 5.3 Effects on income 67 5.4 The model of the Dutch arable sector 68 5.5 Model of the Dutch horticultural sector 70 5.6 Short-term and long-term effects of a levy on pesticides in the Netherlands 71 5.7 Conclusions 72 vu 6 Economic analysis with linear programming models 74 6.1 Introduction 74 6.2 Structure of the linear programming model 74 6.3 Procedure and data 77 6.4 Reducing pesticide use without a levy 81 6.5 Reducing pesticide use with a levy 86 6.6 Relation between levy and pesticide use 88 6.7 Conclusions 89 7 The levy: its level, its revenue and how it could be spent 91 7.1 Introduction 91 7.2 Theoretical relations between levies and restitutions 92 7.3 Regulatory levy with restitution: magnitude and efficiency 95 7.4 Options for restitution 96 7.5 Transfers of income; a pilot study 98 7.6 Conclusions 99 8 Regulatory levy: function, level and income effects 101 8.1 Introduction 101 8.2 Basic principles in determining the size of a levy 101 8.3 A levy for arable farming based on experience and research 102 8.4 Effects of a levy on pesticides in horticulture and in other sectors 104 8.5 Effects on income 106 8.6 Consequences of set-aside 112 8.7 Evaluation of the methods applied in calculating the effects of a levy 114 8.8 Concluding remarks 115 9 Aspects of the policy compounds 116 9.1 Introduction 116 9.2 Policy on compounds 116 9.3 Working method to determine the consequences of a policy on compounds 118 9.4 The policy on compounds and arable farming 119 9.5 The policy on compounds and horticulture 120 9.6 A synthesis of the volume and compound policies 122 9.7 Conclusions 124 Summary 125 Literature 129 Appendices 134 I Prices of pesticides and agricultural products 134 II Database on pesticide use in the Netherlands: 1984-1988 136 III Cropping variants 142 IV Changes in cropping patterns and cropping variants per region 147 V Addition to the LP computations 153 vui List of Tables page Table 2.1 Annual use of three categories of pesticide in kg per hectare of arable and horticultural land, in 10 countries 6 Table 2.2 Annual use of five categories of pesticide in kg active ingredient per hectare of arable and horticultural land, in 10countrie s 6 Table 2.3 Annual pesticide use per crop in kg of active ingredient per hectare, in 6 countries 7 Table 2.4 Sales of pesticides in Dutch agriculture in 1000 kg of active ingredient; period 1974-1991 10 Table 2.5 Amounts of pesticides used in the Netherlands per sector per year 1984-1988 in kg of active ingredient and in 1987 prices 11 Table 2.6 Amount of pesticides used anually in the Netherlands, per category; 1984-1988; amounts

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