Source: Author, 2008
Many studies have focused on the benefits of biodiversity in agro-ecosystems’ productivity. Di Falco and Chavas (2006) found that biodiversity can benefit farm productivity and reduce environmental risk and yield variability under low pesticide use. Omer et. al (2006) find that biodiversity enhancement can have positive impacts on agricultural productivity. Tilman et al., (2005) state that higher yields are obtained from agro-ecosystems with higher diversity than from lower ones. While increasing the number of species on a farm may reduce productivity levels of the main crop in the short run due to resource competition, it can provide services such as soil nutrient enhancement and pollination that can increase agricultural yields in the long run (Jackson et al. 2007). Furthermore, the abundance of functionally similar plant species that respond differently to climatic randomness stimulates resilience that improves the ability of the system to absorb disturbances and enables plants to thrive (Holling, 1973; Naeem et al., 1994). Finally, biodiversity can improve pest control by impeding the evolution of pest populations (difficult to spread in a genetically non-uniform crop system, increased presence of beneficial pest predators) and consequently reducing pest damages (Priestley and Bayles, 1980; Heisey et al., 1997).
Policy Implications, Gaps and Overlaps
The above literature review on pesticide use and biodiversity has generated a number of policy implications and highlighted some gaps and overlaps. These are as following:
- The majority of WTP studies estimate WTP for reducing human health risks (decreased presence of pesticide residues in food). There is a great variation in WTP estimates as some studies report higher WTP estimates for human safety than environmental quality while other have shown the opposite.
- Pesticide sales are much higher in comparison to pesticide consumption (EU-15). This difference stems from the fact that pesticide consumption concerns pesticides that are used in crop production while pesticide sales include pesticides that are being sold not only for use in agricultural production but also in forestry, horticulture, and amenity areas (e.g. parks, sport fields).
- Pesticide demand elasticity studies show clearly that pesticide demand is inelastic.
- There is a great need for a more detailed investigation of the environmental and economic impacts of pesticides.
- Biodiversity valuation and pesticide risk valuation use the same methods: non-use values; contingent valuation; choice modeling.
- Few studies exist on biodiversity valuation, albeit this is a growing research area.
- Farmland biodiversity: The majority of studies measuring biodiversity focuses on landscape heterogeneity on crop edges and bird populations. The evidence finds that these populations have decreased dramatically in Europe during the last decade (Eurostat, 2008). Farming systems that increase landscape heterogeneity in conjunction with restricted use of pesticides on crop edges can benefit farmland biodiversity significantly.
- Biodiversity can benefit farm productivity and reduce environmental risk and yield variability. Implementation of biodiversity conservation policies can lead to a sustainable agriculture. Therefore more research should be directed towards the formulation and practical implementation of such policies.
IV. Pesticide Policies Many international and national policies are targeting the regulation of pesticide use as consumers are becoming more aware of pesticide externalities and demand pesticide-free agricultural products and cleaner and safer natural habitat.
Competitiveness & Environmental Regulations
Figure 21. Porter Hypothesis
Source: Author, 2008
The current level of food production is already causing serious environmental problems. Following this fact, important efforts towards regulating pollution have been made in industrialized countries in the form of increasingly stringent environmental regulations. Some studies have shown that strict environmental regulations slow productivity growth, impede technological progress and impose extra costs to firms (Palmer et al., 1995; Jaffe et al., 1995). On the other hand, the Porter Hypothesis states that environmental regulations press firms to innovate and thus enhance growth and competitiveness (Figure 21) (Porter, 1991). Thus, environmental regulations play a dual role of increasing costs and stimulating innovation.
Although much of the environmental regulations are directed at industrial production, agriculture is impacted as well, especially from pesticide regulations and clean water acts. Nevertheless, agriculture constitutes still one of the major contributors to the global environmental degradation (Tilman et. al, 2001).
Much of the recent work in identifying the relationship between environmental regulations and competitiveness has focused on the pork industry. Metcalfe (2002) examined the impacts of environmental regulations on the competiveness of the European Union (EU), Canada and the United States (US) by focusing on changes in the expected exports due to fluctuations in the environmental regulation costs. The result is that an increase of environmental regulations in the US and Canada will not have a significant negative impact on their pork exports. On the other hand, more stringent EU regulation will reduce EU competitiveness and will be beneficial for US and Canada as they will increase their market share in pork products.
In general, the literature indicates that the moving toward more stringent environmental regulations will not significantly impact competitiveness (Krissoff et al., 1996; Colyer, 2004). Industrialized countries that seem to have an increasing number of environmental regulations also have the capability to channel their research into developing innovations that can minimize the cost of stringent environmental regulations. Furthermore, the US and EU enable their agricultural sectors to remain competitive in export markets through green payments (subsidies, tax breaks). The Porter hypothesis is also supported from the findings of Van der Vlist et al. (2007) that have shown that the intensification of environmental regulations can lead to efficiency improvements.
EU Pesticide Policies
European Union (EU) is struggling to implement coherent pesticide regulations in an effort to protect public health and the environment. Regulations on the marketing of plant protection products, maximum residue levels and the thematic strategy on the sustainable use of pesticides compose the puzzle of the European pesticide policy (Figure 22). Pesticide policies based on economic incentives (taxies, subsidies) are among the future plans of the EU policy makers.
Pesticide policies were first introduced at an EU level in 1979. Directives 91/414/EEC and 98/8/EC on the placing of plant protection products and biocidal products, respectively, on the market were the first to deal with the authorization of pesticides. The waste framework directive (2006/12/EC) and the directive on hazardous waste (91/689/EEC) constitute regulations impacting pesticide use in many ways as they establish provisions for the safe collection/disposal of empty pesticide packages and unused or expired pesticides. The water framework directive (2000/609/EC) and the regulation on MRLs (396/2005) address pesticide residuals as the first identifies substances that are hazardous for water (including active substances in plant protection products) and thus contributing to the authorization of pesticides, while the second sets maximum residue levels of active substances in food and feed. The Thematic Strategy on the Sustainable Use of Pesticides completes the puzzle of current pesticide policies as it aims at regulating pesticide use. In the following lines it is provided a detailed representation of the pre-mentioned policies.
Figure 22. Pesticide Policies at an EU Level in equivalence with aspects of pesticide use.
Source: European Commission (2007)
The European Council adopted recently a regulation concerning the placing of Plant Protection Products (PPPs) on the market. The regulation contains a proposal for “cut off” criteria for the approval of active substances based on hazard properties of the substance (Annex II 3.6-3.7) (Figure 23). The criteria imply that it will not be allowed to approve substances: a) that could cause cancer, have mutagenic or reproductive effects unless the human exposure is negligible (known as CMR category 1 or 2); b) giving rise to endocrine disruptions (ED) unless the exposure to human is negligible; c) fulfilling the criteria of being persistent organic pollutants (POPs); and, d) fulfilling the criteria of being persistent, bioaccumulative and toxic (PBT), or very persistent and very bioaccumulative (vPvB).
Furthermore, the regulation includes criteria for selecting candidates for substitution (Annex II 4). The substances fulfilling these criteria are also identified.
Another regulation concerns the establishment of Maximum Residue Levels (MRL), which is “the highest levels of a pesticide residue that is legally tolerated in or on food and feed” (European Commission, 2008). Currently there are MRLs for 315 fresh products, but these MRLs also apply to the same products after processing. The MRLs cover approximately 1100 pesticides currently or formerly used in agriculture within and outside the EU. European Food Safety Authority (EFSA) is responsible for holding safety assessments that concern all the consumer groups and are based on pesticides’ toxicity, the maximum levels expected on food and the different diets of EU consumers. Figure 24 presents the composition of the MRL regulation, who is responsible for its enforcement and, who takes action when the MRL of a specific product is above the legal level. The MRLs also contain: a) the EU MRLs already in force before September 2008 (about 45,000); b) the recently harmonized MRLs previously set by the Member States (about 100,000); and, c) a list of low risk substances for which MRLs are not necessary.
The Member states are responsible for the control and enforcement of MRLs, while the EU has some mechanisms of ensuring that the MRLs are applied in an adequate way. These mechanisms are the EU multiannual control programme, the Food and Veterinary Office and the Community Reference Laboratories. Finally, if some food or feed are found to contain excess amount of pesticide residues, then the Rapid Alert System for Food and Feed (RASFF) takes measures to protect the consumers.
Figure 24. Maximum Residue Levels (MRLs) in EU.
Source: Author, 2008
European Commission adopted on July 2006 the Thematic Strategy on the Sustainable Use of Pesticides that is accompanied by an impact assessment and a legislative proposal that will create a policy framework for pesticide use. The goal of this strategy is to minimize the adverse effects and risks on human health and the environment from the use of pesticides (European Commission, 2007). The strategy includes a number of measures that will be implemented either by using existing policy frameworks or by introducing new legislations (Figure 25). According to the European Commission (2007) these measures are: a) new measures that cannot be integrated, fully or to a large extent, into existing instruments; b) measures that can best be integrated into existing instruments; and, c) actions and measures that are currently not proposed as part of the Thematic Strategy, but could be examined again at a later stage.
Establishment of National Action Plans (NAPs) to reduce hazards, risks and dependence on pesticides is one of the measures of the first category. These National Plans have been very successful in the past and they will mirror the parts of the Thematic Strategy for the sustainable use of pesticides at national level. Involvement of different stakeholders and public participation in the preparation and implementation of the NAPs is one of the priorities of the thematic strategy. Another measure of this initiative is the creation of a system of awareness-raising and training of professional pesticide users, distributors and advisers. The risks linked to the use of pesticides should become known to all the involved stakeholders and member states should ensure that these stakeholders have access to the minimum training required. Furthermore, the inspection of the application equipment will be compulsory. Well maintained application equipment can minimize the risks to human health and the environment and can ensure the efficient use of pesticides.
Figure 25. The Thematic Strategy on the Sustainable Use of Pesticides
Source: Author, 2008
Additionally, areas of reduced or zero pesticide use will be defined. Each member state should indicate areas such as special protected areas (Natura 2000 network), areas that are accessed by vulnerable groups (playgrounds, around schools) and areas of high public exposure (such as parks). Storage and handling of pesticides is another important measure. Waste management should be established for unused and empty packages while residues from leaning spray equipment must be disposed in accordance with the rules for hazardous waste. Other measures of the first category are: the prohibition of aerial spraying, the enhanced protection of the aquatic environment, the implementation of principles of Integrated Pest management (IPM) by professional pesticide users, measuring progress in risk reduction through appropriate indicators, establishment of a system of information exchange at community level and the improvement of systems for collecting information on distribution and use.
Among the measures that can best be integrated into existing instruments are: improved systems for monitoring compliance with the legal requirements concerning pesticides, comparative assessment and substitution principle, residue monitoring and epidemiological exposure studies, environmental monitoring, research on pesticides, application of normal Value Added Tax (VAT) rate to pesticides and the establishment of an international dimension by contributing to the safe use of pesticides in third countries outside the EU.
Finally, there are some actions and measures that presently do not constitute a part of the Thematic Strategy but need to be examined and debated for a future adoption. One of them is the establishment of quantitative reduction targets. This measure requires careful examination since its establishment can be impeded potentially by a) the absence of direct links between quantities of a substance used, the risks to human health and the natural habitat and/or b) the absence of data in several member states on current pesticide use that renders the identification of an appropriate baseline difficult. Tax and levy schemes are another measure that will be examined at a later stage. Taxation of pesticides will provide revenues that can be used to finance the different pre-mentioned measures.
Abatement Policies of EU and non-EU countries
Several countries have undertaken pesticide reduction programmes in the last two decades. Table 4 summarizes these individual efforts.
Table 4. Pesticide Policies in some European Countries and California (U.S.).
● Extra subsidies
Finland ● Registration charge ● Registration charge: 2.5% _
● Target fee (new active of net selling price
ingredient) ● Target fee: about 1000 €
The Netherlands ● MJP-G _ ● 50% reduction
● Integrated Crop Protection
on certified farms
France ● Pollution tax on antiparasite _ ● Marginal
Germany ● Crop Protection Act _ _
● Pesticide Reduction Programme
Source: Lesinsky and Veverka, (2006); PAN Europe (2005); Hoevenagel et al. (1999); OECD (2008).
Sweden is one of the first countries that had introduced a simple tax scheme based on an environmental levy of 30 SEK (3.25 €) per kg active substance. According to Swedish estimates, the introduction of the tax reduced the risk to human health by 77% in the 1997-2001 period and environmental risk by 63% over the same period. However, the taxation had minimal impact on the aggregate volume of pesticides used but farmers substituted past pesticides used for low-dose pesticides. On balance, the pesticide load on the environment decreased due to technical assistance to farmers and training that led to more environmental friendly agricultural practices. A portion of the tax revenues have been used to finance research related to risk reduction.
Norway introduced a tax system in 1988 based on a percentage of the import value of pesticides. In 1999, a tax system was introduced where the taxation level is banded by health and environmental properties. The system is based on differentiated tax rates per hectare and standard area doses. From January 2005 the base rate is NOK 25 per hectare. There are seven tax bands including adjuvants (no tax), seed treatment and biological pesticides (low tax), ordinary pesticides for professional use (3 bands, differentiated according to human health and environmental risk), and pesticides used in home gardens (2 bands) with the highest tax. According to this hierarchy, each band corresponds to a factor f. The tax for each band is calculated by multiplying the base rate with the respective f. Since the mid-1980s there has been a steady decrease in the use of pesticides to about 50% of baseline levels while after the implementation of the banded tax system there was a massive stockpiling of pesticides. Norwegian data show that the risk to human health was decreased by 33% while the risk to the environment decreased by 37%. One third of the tax revenues is recycled back through the reduction programme to provide incentives for farmers to change their attitude and practices to more environmental friendly methods. While farmers claim the banded tax system has led to higher costs, the tax system has contributed to the use of less harmful for human health and the environment pesticides. There are examples where the tax differences between different bands are minimal and in some cases it can be more profitable to use pesticides from higher tax bands that are not in accordance with the intentions of the policy makers. As far as the pesticide sales are concerned, there is a decreasing trend with a considerable variation.
The Danish pesticide reduction plan started in 1986 in response to a major increase in the use of pesticides and a large decline in farmland biodiversity. A tax scheme was initiated to protect consumers and land workers from health risks and harmful effects and the environment. Introduced in 1992, this system was based on taxing the retail price of various agricultural chemicals. Currently it is a 34% of retail price for herbicides, fungicides and growth regulators, 54% for insecticides, and 3% for wood preservatives. With 83% of the tax returned to farmers by funding a number of agricultural activities, while the remainder allocated to research and administrative costs. The Danish Government estimated that the reduction in pesticide consumption ranged from 5 to 10%. Danish farmers generally accepted pesticide taxation given there was a clear return to them in the form of lower land tax and transparency in how the retained funds were used for funding of action plan programme activities and research. The combined sale and consumption of plant protection products in agriculture has declined nearly 60% between 1985 and 2000. It is difficult to separate the impact of taxation on pesticide use from the other factors influencing farmers’ use decisions. The fall in the pesticide consumption is largely due to a switch to low-dose agents, but a reduction of the combined cultivated land, the increased conversion to organic farming, and the improved pesticide technologies and management during the last decade have played a crucial role in reducing the use of pesticides. The objective of the Pesticide Action Plan (2004-09) is to reduce even more the pesticide use (1.7 applications per harvest year). In addition to the tax plan, this plan includes annual payments to farmers who do not use pesticides, technical assistance, decision support systems, and training and approval procedures.
After the 1986 discovery of widespread herbicide pollution of drinking water in large areas of the North and Central Italy, subsequent measures were taken (“Atrazine Emergency”). Among them were a ban on atrazine, re-registration of pesticides (PD 223/1998 and DLg 52/1997), and stringent control on pesticide sales. Additionally, in 1999 a pesticide tax of 2% on the retail price was introduced. Its revenues were going to fund a nationwide publicity campaign promoting organic products with television, newspaper, and magazines advertisements. Nevertheless, OECD (2008) reports that pesticide use increased by 8% during the period 1990-2008. Pesticide residues have found in groundwater especially in Northern Italy while around 2% of fruits and vegetables found to have residual pesticides above national standards. There are however some positive signs like the increasing share of organic crops and the low use of herbicides and insecticides following the introduction of low-dosage products.
The United Kingdom (UK) pesticide taxes are assessed to the agrochemical industry based on an annual turnover of approved pesticide products, while in Italy there is a flat tax that varies between domestic and imported pesticides. The UK industrial fee is due to cover the cost of post-approval monitoring of plant protection products. Furthermore, in the context of national Codes of Good Agricultural Practice the UK have introduced a Local Environmental Risk Assessment for Pesticides (Stoate et al., 2001). This constitutes a framework that regulates pesticide use by indicating some environmental friendly agricultural practices and restricting others. Among these restrictions are that farmers are not allowed to use pesticides at field margins on arable land as they have negative effects on the presence and abundance of plant and animal species (De Snoo, 1997; Chiverton and Sotherton, 1991).
Switzerland has developed low pesticide integrated production farming protocols which cover several major crops and animal products. Swiss direct payments require farmers to adopt minimum ecological standards (e.g., pest warning devices, prognosis models in pesticide decisions). Swiss farmers can enjoy extra subsidies if they have further decreases in pesticide use. In 1994, Switzerland initiated its agri-environmental policy by identifying clear targets that had to be completed by 2005. The agri-environmental objectives were the selective and risk-guided use of plant protection products. The respective target was to reduce the use of pesticides by 32% of active ingredient between 1990-92 and 2005. This target was achieved and, among other useful insights, it was found that the main reason for pesticide presence in water aquifers is the expansion of cereal and corn crops to land whose soil characteristics are not suitable for this kind of crops use.
The Netherlands developed a Multi Year Programme for Crop Protection (MJP-G) in 1991, which was the product of a constructive dialogue and negotiations between the government, farmers’ organizations, the organization of pesticide producers, and several environmental organizations. The main targets of this national plan were: a) the reduction of the quantity of pesticides used; b) the reduction of the emissions of pesticides to water, air, and soil; and, c) the reduction of the dependence on pesticides. An emphasis was placed on information and education, research and economical incentives. The MJP-G was replaced in 2001 with a plan called “View of Healthy Crops, Certified Cultivation at Integrated farms” that it will run until 2010. The three main goals of this plan are: a) a further decrease of pesticide use; b) a further reduction of emissions to the environment; and, c) the improvement of compliance with the pesticide regulations to minimize the adverse effects on public health, agricultural workers and the environment (van de Zande et al., 2002). The objective is to achieve these goals through integrated crop protection on certified farms. Certified farms increase the transparency of production processes in an era where consumers demand more reliable food information. The target is to achieve a 95% pesticide reduction by 2010 compared with 1998. According to OECD (2008), the use of pesticides was reduced by 50% during the period 1990-2003. The Ministry of Agriculture had estimated that the agricultural sector costs of reducing pesticide use were around € 50 million in 2003. Nevertheless, the Statistical Agency of The Netherlands (CBS) (2006) shows that the total use of pesticides in arable and horticultural farming was stable over the 2000-2004 period.
In France, herbicides are the most commonly used type of pesticides. Despite the volume of farm production increasing by 2% in total over the period 1990-2004, pesticide use decreased by 10% during the same period. Nevertheless, pesticide use continues to be higher than the average in other OECD European countries (OECD, 2005). While there has been a decrease in pesticide use in general, contamination of water bodies remain widespread. In 1999, France introduced a pollution tax on antiparasite pesticides but its effects were characterized as marginal under the framework of a general tax on polluting activities. However, it is difficult to isolate the impacts of a pesticide tax from other policy measures (such as extension services) or even from trends that can affect pesticide use (such as the increase of organic crops).
Additionally, France has a well developed monitoring system of nutrients and pesticides. In 2003, several French ministries asked the Environmental Health Safety Agency and the Food Safety Agency of the country to establish a research center that will be responsible for monitoring pesticide residues. One of its tasks is to gather information on pesticide residues in different environments, the estimation of levels of exposure and the improvement of extension services that will provide better and more systematic information on pesticide use.
Germany has introduced a Crop Protection Act in 1998, which states that farmers should use integrated pest control, relying on biological and biotechnical techniques, plant breeding and other agronomical practices to reduce pesticide use to a “necessary extent” (Burger et al., 2007), which is the extent of pesticide use that will maintain the profitability of crop production. The Pesticide Reduction Program that followed the Crop Protection act tried to fill the gap of preciseness on the definition of the “necessary extent”, Among the measures identified in the Pesticide Reduction Program is the development of a standardized treatment index that measures the intensity of pesticide use in agriculture and the integration of this index into the environmental quality assurance systems for agricultural enterprises.
U.S. Pesticide Policy
The federal regulation of pesticide products in US is governed by the Food Quality Protection Act (FQPA) of 1996 (USDA, 2008). This act has amended two previously established acts, the Federal Food, Drug, and Cosmetic Act (FFDCA), which establishes tolerances of pesticide residues on food and feed, and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which regulates the sale and use of pesticides. Figure 26 presents the main parts of the FQPA.
The FQPA imposes uniform safety standards to residues in raw and processed food and forces the different States to comply with the federal standards instead of develop different ones. Pesticide residues no longer fall under the Delaney Clause (“no food additive will be safe if it is found to induce cancer when ingested by man or animal”). Therefore, a uniform health-based standard is applied to all foods and risks. The Environmental Protection Agency (EPA) is responsible to review all tolerances within 10 years. Anyone may petition to establish, and modify a tolerance, if a registrant includes a summary of data with an authorization to publish these data and information on health effects.