The costs of pesticides

There are health and environmental side-effects attached to pesticide use, in addition to real costs of regulations and control.  A study to be published shortly in Germany has identified these impacts, and estimated the economic toll on society as a whole.

Pesticides should have no detrimental side-effects on human health, drinking water or the natural environment, according to the German Pesticides Act of 1986. It assumes that farmers will follow German principles of integrated pest management (IPM), which basically lay down good management practices in the use of pesticides. In the current economic and institutional situation it is doubtful whether farmers can meet these requirements, and it is therefore unlikely that present practices will avoid the occurrence of  additional costs to society.
    Pesticide use in the study area* amounts to about 30,000 tonnes of active ingredients per year. Costs as a proportion of total variable costs are rising due to decreasing cropping diversity, which is a result of the easy and cheap availability of pesticides.
    Even so, powerful incentives encourage farmers to continue on the path of 'chemical agriculture'. Firstly there is the high cost to the individual farmer of implementing IPM methods. Secondly, because European subsidies are based on production rather than efficient use of inputs, farmers have the use of external inputs. Thirdly, the use of cheap products-such as the herbicide atrazine in maize-stimulated monoculture, leading to a growing dependence on herbicides.
    Farmers spend DM1,689 million (US$3,000 million) on purchasing, storing and applying pesticides. The current net return from pesticide use to farmers in the study areas amounts to DM1.15 billion, which, however, is less than previous estimates.
    Against this, must be set the external costs arising from the detrimental side-effects of pesticide use, totalling a minimum of DM252 million per year. Figures estimated in this detailed analysis include DM64.3 million for the cost of monitoring drinking water;  the processing of water to remove unwanted chemicals DM17.5 million;  poison damage to honey bees DM2 million;  and working days lost as a result of pesticide-related ill-health DM9.5 million (see table).

    Additional effects have been identified but not yet assessed in monetary terms: factors such as losses through pesticide exposure in other productive areas-fish farming or poultry rearing; costs of withdrawing contaminated goods from the market; cost of marketing imported food for pesticide residues; costs from chronic illnesses such as cancer; and the effects on non-target animals and plants. Other negative aspects of pesticide use include chronic human health problems, long-term loss of sustainability in agricultural production and soil fertility and changes in consumer preferences, for example, in drinking water. The real long-term costs for society are, therefore, considerably higher than the DM252-312 million indicated in the table.
    Deducting the DM252 million from the farmers' net return results in a net benefit of pesticide use of DM900 million, equivalent to about 5% of the net domestic agricultural product. A total ban on pesticide use in German agriculture (in the study area) would cause a net welfare loss of less than DM 900 million. This figure largely depends on what degree of effective non-chemical alternatives can be developed and applied by farmers.
    There is no question at this stage of a total changeover to an integrated farming system in which non-chemical methods would be paramount. It is difficult to develop a methodology to assess accurately the profitability of pesticide use, but this study has made a thorough attempt. In the model used, it is assumed that if demand for pesticides is elastic (that is there is more flexibility open to farmers than at present), the agricultural sector would be better able to adjust to a ban on pesticide use.
    The study concludes that the basic strategic approaches of German pesticide policy should be reconsidered since the economic benefit of using pesticides appears limited. A highly sophisticated regulatory framework has been established, but  external costs nevertheless occur at intolerable levels. The existing approaches have failed to reduce intensive pesticide use and so economic instruments should play a greater part in pesticide policy. (BD)

This report is based on a study for the German government by Hermann Waibel and Gerd Fleischer of the Pesticides Policy Project, University of Hannover, Germany. Email waibel@ifgb.uni-hannover.de, Fax +49 511 672 2667. 
*The States of the Federal Republic of Germany before unification with the former East Germany.

[This article first appeared in Pesticides News No. 39, March 1998, page 4]