Economic Development and Pesticide Use in EU Agriculture: A Nonlinear Panel Data Autoregressive Distributed Lag Approach

Abstract

Within the regime established by the Directive on Sustainable Use of Pesticides (SUDP); the present work explores the relationship between pesticides’ agricultural use per hectare of cropland and the GDP per capita of the rural population for twenty-five EU countries to unveil the efficiency of the current EU strategy. With the econometric tool of panel nonlinear autoregressive distributed lag (NARDL) cointegration technique; we try to capture potential asymmetries in the agricultural use of pesticides concerning positive and negative variations in agricultural income. The findings validate the existence of a long-run relationship that supports an Environmental Kuznets Curve (EKC); i.e., an inverted U-shaped relationship between the variables; since increasing agricultural income is related to reductions in the use of pesticides after the turning point. Even though this result is not validated in the short run; our findings confirm the existence of a steady-state situation with asymmetric responses to pesticides. In terms of policy implications; more measures need to be taken; along with the education of farmers; aiming to enhance their consciousness towards environmental issues and; in consequence; for them to prefer environmentally friendly plant protection methods over chemical ones.