Financial incentives and pesticide use

Abstract

This paper argues that the current pesticide regulatory system is inefficient. An elaborate set of registration requirements has led to high costs of new pesticides. The current system does not provide any incentives for decreasing its pesticide use. The implementation of financial incentives to control pesticide use is difficult since damage from pesticide use depends upon locational factors, timing, and manner of application. An efficient pesticide tax scheme requires detailed monitoring and reporting of pesticide use by farmers. Improved monitoring systems will enable differentiated pesticide taxes according to application technology, and such differentiated taxation will reduce the adoption of precision technologies that reduce pesticide use. Proceeds from pesticide taxes may have a role in financing research and education in Integrated Pest Management methods, given the high development costs and advanced management skills demanded by many non-chemical control methods. The transition to efficient financial incentives will be gradual in the near future, and it may be useful to use financial incentives to induce improvement in pesticide use efficiency and reduce pesticides use levels.