AN IMPACT ASSESSMENT MODEL OF LIMITING PESTICIDES IN AGRICULTURE

Owing to the improved crop yields attributable to the use of agricultural pesticides, there has been a phenomenal increase in their application in recent decades. The widespread use of highly-toxic chemicals has not, however, been free of societal concern. As a reaction to the potential health and environmental hazards, regulatory agencies have been established to oversee pesticide use. The Evironmental Protection Agency (EPA) periodically reviews the status of specific pesticides where the risks to man and his environment are weighed against the economic consequences of restricting the chemical. A decision is then made to re-register, limit, or ban the pesticide in question. Models useful for measuring the economic impact of pesticide restriction, however, have remained in strictly a conceptual state, or have analysed the banning of all pesticides, or have assessed the impact of a nationwide pesticide ban on a small producing region with the assumption that crop prices would not change. In this study, a market-locality-impact-assessment model is developed with the objective of measuring the economic impacts from a specific pesticide ban on a crop. Market impact from a ban is simulated through shifts in the market supply and measured by the change in producer and consumer surplus. The locality model, built around a linear programming technique, measures the change in crop production, costs, and revenues for a region producing only a fraction of the total output. The price effect from the shift in the market supply is then used to adjust locality changes in producer revenues and surplus. The impact assessment model is next applied to the pesticide-use pattern in Nebraska. The results for selected and all-inclusive pesticide bans reveal that producers gain while consumers lose. Net social welfare, as the sum of producer plus consumer surplus, falls under all pesticide bans