Academic journal article Agricultural and Resource Economics Review

The Effect of Label Information on U.S. Farmers' Herbicide Choices

Academic journal article Agricultural and Resource Economics Review

The Effect of Label Information on U.S. Farmers' Herbicide Choices

Article excerpt

This paper analyzes the effect of labeling information on U.S. farmers' herbicide choices. Herbicide choices reported by U.S. soybean farmers are used to estimate farmer preferences for different herbicide attributes using a mixed logit model. Our results indicate that statements displayed on pesticide labels regarding risks to human health and the environment are important components in herbicide selection. We find that farmers are willing to pay an average of $27 per acre to avoid using an herbicide labeled with the word "Warning" and $38 per acre to avoid using an herbicide labeled with the word "Danger."

Key Words: mixed logit model, WTP to avoid human and environmental risk

(ProQuest: ... denotes formulae omitted.)

Farmers rely on pesticides to increase agricultural productivity and profits and to reduce production risks. As a result, pesticides have become an important agricultural input throughout the world and particularly in the United States. In 2001, the U.S. agriculture sector used 675 million pounds of active pesticide ingredients at a cost of more than $7.4 billion, which accounts for about 23 percent of the pesticide market worldwide (Kiely, Donaldson, and Grube 2004). However, history has shown that incorrect use of pesticides can have negative effects. For instance, pests can become resistant to pesticides and pesticides can harm nontargeted plants and animals (Delaplane 2000).

Pesticide labeling is designed to regulate pesticide use and minimize some of the externalities that arise from incorrect use. Although the Federal Insecticide, Fungicide, and Rodenticide Act of 1947 (7 U.S. Code §136 et seq.) established standards for the content of the labels, it was not until an amendment in 1972 that specific methods and standards for control were imposed (Whitford et al. 2004). In the 1972 amendment, pesticide use inconsistent with the label was prohibited and violations could result in fines and/or imprisonment. Pesticides also were classified for general or restricted use. Any person (a commercial applicator or a farmer) who wanted to apply a restricted-use pesticide was required to be certified by the state. Later, as a consequence of the worker's "right to know" movement in the mid-1970s, the Federal Hazard Communication Standard (15 U.S. Code § 1261 et seq.) was promulgated in 1983. This law requires pesticide manufacturers to create material safety data sheets (MSDSs) and distribute them to downstream users of their products (Sattler 2002). Each MSDS includes information regarding the physical properties of the pesticide; its toxicity, reactivity, and health effects; appropriate first aid measures, protective equipment, and spill-handling procedures; and safe storage and disposal.

Most generally, product labeling can be seen as a policy tool associated with the provision of health and environmental information (Teisl and Roe 1998) to align individual consumer choices with social objectives (Golan, Kuchler, and Mitchell 2000). For this reason, consumer responses to information displayed on food product labels have been studied extensively. However, to the best of our knowledge, little or no research has been conducted on pesticide labeling information and how it affects the behavior of farmers. Hence, the general objective of this study is to estimate the effect of labeling information on farmers' pesticide choices. Specific objectives are (i) to estimate the relative importance of cost, a product's weed-control efficiency, and the human safety and environmental attributes displayed on product labels to farmers' herbicide choices; (ii) to estimate farmers' willingness to pay (WTP) for each attribute; and (iii) to compare the performance of models based on label information only with models based on information provided by labels plus MSDSs and other more technical sources of information.

Herbicides are the most used pesticide in the United States; they account for more than twothirds of the pesticide market. …

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