Can economic incentives encourage actual reductions in pesticide use and environmental spillovers?
Article first published online: 30 MAR 2012
© 2012 International Association of Agricultural Economists
Volume 43, Issue 3, pages 267–276, May 2012
How to Cite
Skevas, T., Stefanou, S. E. and Lansink, A. O. (2012), Can economic incentives encourage actual reductions in pesticide use and environmental spillovers?. Agricultural Economics, 43: 267–276. doi: 10.1111/j.1574-0862.2012.00581.x
- Issue published online: 19 APR 2012
- Article first published online: 30 MAR 2012
- Received 27 April 2011; received in revised form 2 August 2011; accepted 31 October 2011
- Economic instruments;
- The Netherlands
Chemical pesticides constitute an important input in crop production. But their indiscriminate use can impact negatively agricultural productivity, human health, and the environment. Recently, attention is focused on the use of economic incentives to reduce pesticide use and its related indirect effects. The aim of this work is to assess the effectiveness of different economic instruments such as taxes and levies in encouraging farmers to decrease pesticide use and their environmental spillovers. A policy simulation model is employed using data from Dutch cash crop producers including two pesticide categories that differ in terms of toxicity and pesticides’ environmental spillovers. Four different instruments were selected for evaluation: pesticide taxes, price penalties on pesticides’ environmental spillovers, subsidies, and quotas. The results of the study indicate that even high taxes and penalties would result in a small decrease in pesticide use and environmental spillovers. Taxes that differentiate according to toxicity do not lead to substitution of high- with low-toxicity pesticides. Subsidies on low-toxicity products are not able to affect the use of high-toxicity products. Pesticide quotas are more effective in reducing pesticide use and environmental spillovers.