Sunday, February 24, 2013

Pesticides, external costs and policy options for Thai agriculture

Abstract: This study addresses the questions of how to estimate the external costs of agricultural pesticide use and how to disaggregate these costs to particular chemicals and farm production systems. Using the case of Thailand—a lower-middle income country with an export-oriented agriculture and an annual growth in pesticide use of about 10%, we estimate the external costs of pesticide use for the period 1997–2010 by applying the Pesticide Environmental Accounting (PEA) tool and compare the estimates to an accounting of actual costs for two years. We also use the tool to estimate the external costs of two distinct production systems of rice and intensive horticulture. Using the PEA tool, we estimate the average external costs of pesticide use in Thailand to be USD 27.1/ha of agricultural land in 2010; yet the actual cost estimate for the same year is only USD 18.7/ha. This difference leads us to discussing the strengths and weaknesses of the PEA approach. The negative externalities of pesticide use could be reduced by giving farmers a financial incentive to use fewer pesticides, for instance by introducing an environmental tax. We argue that for such instrument to be effective, it needs to be combined with supportive measures to change on-farm practices through awareness-raising about the adverse effects of pesticides and introducing farmers to non-chemical alternatives to manage their pest problems.
► We quantify the external cost (EC) of pesticides in Thai agriculture using two methods.
► Using the Pesticide Environmental Accounting (PEA) tool, the average EC is USD 27 ha.
► Using an actual cost approach, the average EC is USD 19 ha.
► We discuss the pros and cons of using the PEA tool.
► We recommend combining a pesticide tax with supportive measures to change on-farm practices.
Full-size image (26 K) 
Fig. 1. Agricultural pesticide use and pesticide productivity in Thailand, 1987–2010 Notes: Output based on the value added for agriculture at constant (year 2000) prices in USD. Pesticides here include insecticides, herbicides, fungicides, acaricides, rodenticides, fumigants and molluscicides. Pesticide consumption data are based on imports
Full-size image (27 K) 
Fig. 2. External cost of pesticide use in Thailand (1996–2010), as estimated using the PEA tool and actual cost method (at constant 2010 prices).
by Suwanna Praneetvatakula, Pepijn Schreinemachersb, d, E-mail the corresponding author, Piyatat Pananurakc and Prasnee Tipraqsad 
a Department of Agricultural and Resource Economics, Kasetsart University, Bangkok, Thailand 
b Department of Land Use Economics in the Tropics and Subtropics, Universit├Ąt Hohenheim, Stuttgart, Germany 
c Knowledge Network Institute of Thailand, Bangkok, Thailand 
d The Uplands Program, Chiang Mai University, Chiang Mai, Thailand
Volume 27; March, 2013; Pages 103–113
Keywords: Crop protection policy; Externality; Food safety; Pesticide Environmental Accounting (PEA); Thailand; Southeast Asia

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