How much are consumers willing to pay to reduce pesticide use?
Many countries would like to decrease their pesticide use but are concerned about the accompanying cost. A recent study reveals that consumers are willing to pay more for food produced with fewer or no pesticides.
The impact of pesticides continues to be a subject of political debate at both a national and European level. In 2006, the European Commission launched a strategy to improve the use of pesticides across the EU1 which called for national action plans. Many policies already exist to minimise the negative impact of pesticides. These include pesticide taxes in Denmark and Norway and the Voluntary Initiative2 in the UK. However, research is needed to inform these policies.
One of the most informative forms of research is estimates of consumers' willingness to pay (WTP) to reduce or avoid the negative impacts of pesticides. This study took a novel approach to this concept by separating WTP to avoid environmental impacts and WTP to avoid risks to human health.
The study questioned UK consumers about two types of food produced from different production systems. These were a loaf of white bread and a weekly basket of fruit and vegetables. The bread was investigated to determine WTP to avoid the impact of pesticide use on the environment as a result of cereal production. The fruit and vegetables were investigated to determine WTP to reduce the impact of pesticide on health due to residues on food.
The respondents were presented with choice cards that consisted of three agricultural production processes:
• Current farming practices
• A green policy employing less pesticides
• No pesticides - a nationwide ban on pesticide use
The decision to buy the product at a certain price was taken as an estimate for WTP for reduced or no pesticide usage.
The results demonstrated a preference for both the 'green' and the 'no pesticides' options, despite higher prices. However, the likelihood of choosing the 'green' option drops at the highest of prices (1.03 Euros per loaf and 10.32 Euros per basket of fruit and vegetables). The likelihood of choosing the 'no pesticides' option remains strong at even the highest payment level, indicating that people are willing to pay more for 'no pesticides' than the green option.
The study used the WTP estimates to calculate the levels of tax needed to achieve a certain reduction in pesticide use. The tax is payable by the producer but translates into higher food prices for the consumer. They show that consumers are willing to accept considerably higher prices if they are designed to improve human health than if they seek environmental benefits.
A tax to reduce the environmental impact could only be 14.89 Euros per kg of active ingredient, whereas a tax to reduce the effects on human health could be as high as 137 Euros per kg of active ingredient. Although this difference may seem high, it is interesting to note that in Norway the base rate of the pesticide tax can be multiplied by 150 for pesticides considered to have a large impact on human health and the environment.
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