Analysis on the Effect of PLS (Positive List System) Implementation and the Long-run Equilibrium Relationship between Pesticide Price and Agricultural Prices

Abstract

Implementation of the PLS (January 1, 2019) may have influences on the condition of domestic production such as the increase of pesticide costs and low suitability on MRL tests. In order to analyze the impact of increase in pesticide costs on price of agricultural products, we have conducted time series analysis on 34 products. The result shows that prices of red beans, spinach, radish, garlic and apple spiked after the increase in pesticide price and find new equilibrium at higher prices. In order to minimize potential damages to the farmers, the government need to intensify the guidance activities and extension service for farmers on suitable production practice and safety inspection. Subsequently, it can lead to stable production and supply of safe agricultural products. Also, it is necessary to strengthen the expertise of pesticide distributors and sellers, who are the main source of information for farmers. Advancement of pesticide management system, improvement of small packaging of pesticide, measuring container and pesticide labeling and development of general-purpose pesticides should be simultaneously conducted, too.