Schaub, John R.

English

Research Papers in Economics

SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS  JULY 1991
ECONOMIC  IMPACTS  OF CHEMICAL USE  REDUCTION  ON
THE SOUTH:DISCUSSION
John R. Schaub
I  agree with the authors (Taylor, Penson, Smith and  diversity of production will change. We know that
Knutson)  that  agricultural  economists  can  and  production changes will differ among commodities.
should attempt to shed light on the topic of a reduc-  Fruits and vegetables will be hardest hit while major
tion or elimination of chemical use in agriculture. It  field  crops, with  the exception of peanuts, will be
is an issue that has been raised and is not likely to go  affected less. The jury is still out on livestock, but it
away in the near future.  Reasoned judgments must  is possible  that production would  decline as input
be made based on the best available data and analy-  prices increase.
ses and not the perceptions, sometimes without basis  Some of the predicted changes may be on the high
in scientific fact, of special interest groups.  side.  For  example,  the forecast corn  price  effects
The  points  made  in  the  paper  are  geared  to  a  resulting  from a decrease in herbicide use may  be
professional audience that is familiar with the topic  larger than expected. Projected changes in fruit and
and the analytical concepts involved, as opposed to  vegetable  prices  resulting  from  elimination  of
a general audience. In the setting where this paper is  chemicals, however, could be on the low side. At this
being presented, namely a professional association,  point  it  is  not  possible  to  make  sound  objective
such an approach is appropriate.  judgments,  but only raise some  questions.  What is
As  the  authors  indicate,  the issue  is  difficult to  needed is a concerted effort to develop estimates of
address, and because of the way regulations, admin-  changes in yield and quality that would result from
istrative procedures,  and laws are currently written,  changing or eliminating chemical use in agriculture.
reducing  chemical  use  by  a  given  percentage  is  These data (or estimates)  are hard to develop, but it
precluded as an option.  If scenarios were to be de-  can be done and a consensus can be developed.  Help
veloped consistent with existing authorities, the sce-  is needed  from all of us, especially  the biological
narios would be too complex and costly to analyze.  scientists, to develop these estimates.
For example,  EPA,  which is charged by Congress  Economic impacts will be greatest in the short and
with administering FIFRA, regulates pesticides on a  intermediate term, with output decreasing and prices
case by case basis.  increasing. The changes will be substantial, but we
The economic models available for analysis of this  don't know and can't predict how great they will be.
issue are not adequate. The changes that will occur,  In the longer term, as biotechnology develops, tech-
or could  occur, could  be greater than any  changes  nology  transfer  occurs,  diets  change,  and  other
that have occurred in the past. Consequently, poten-  changes occur,  economic  impacts will lessen.  The
tial results are difficult to interpret.  time  frame,  however,  in  which these  events  will
We, in the Economic Research Service, are doing  occur is not known.
some  work  in  this  area.  Our  analysis  involves  a  The role of imports needs to be explicitly consid-
version of the model the authors use, AGSIM, devel-  ered.  If ground  water is the  concern,  then perhaps
oped  by  Bob  Taylor, for  a number of major field  imports should be allowed.  If pesticide residues on
crops, a CGE Model that addresses the general econ-  imported food are the concern, then perhaps imports
omy,  and  the  California  Agricultural  Resource  should be restricted or costly regulatory mechanisms
Model (CARM)  for fruits  and vegetables.  In terms  to ensure food safety should be put in place.
of point estimates,  we have  some differences,  but  In summary, I believe this paper attempts to place
they are not appreciable.  in perspective changes that could occur if chemicals
While there is difficulty in making point estimates,  were eliminated  in agriculture.  It is possible to dis-
I think it is safe to say that elimination of chemicals  agree with particular point estimates of change that
in agriculture  will have  large impacts and that  the  the authors have made.  I believe, however, the im-
effects on consumer prices  will be great.  Prices to  portant  points  are  that  changes  resulting  from an
consumers will increase as production declines; and  elimination of chemicals in agriculture will be con-
John R.  Schaub is Chief of the Agricultural Inputs and Production Systems Branch, Economic Research Service, USDA. The author's
own opinions, and not necessarily those of the USDA, are here represented.
Copyright 1991, Southern Agricultural Economics Association.
25siderable;  current  models  are not  equipped  to  ad-  and  quality changes associated  with changes in ag-
dress the extent of change, but can indicate direction;  ricultural chemical use.
and more effort needs to be made in estimating yield
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ECONOMIC IMPACTS OF CHEMICAL USE REDUCTION ON THE SOUTH: DISCUSSION

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