Economics of herbicide-free crop production

Abstract

Ambitious pesticide policies aiming to reduce pesticide applications and risks have been introduced across Europe. Herbicides represent a major part of pesticide use, but the uptake of mechanical or agronomic alternatives remains low. We here explore underlying reasons and provide policy insights for supporting a transformation to herbicide-free production, accounting for both economic and agronomic drivers. We develop detailed extensions to an existing bio-economic modeling approach and use stochastic dominance analysis to assess the performance of non-chemical alternatives to herbicides under different production and market conditions exante. We apply our approach to Swiss wheat production and find that herbicide-free production is not viable without financial support, and thus requires additional per-hectare agri-environmental payments and price markups to be economically viable. We find that currently available support payments in Switzerland are sufficient in achieving economic viability of herbicide-free production. Moreover, we confirm the relevance of risk and risk preferences and identify a risk-reducing character of herbicide-free production systems with support payments. Our analysis provides insights on potential drivers, trade-offs, decision-making factors, and policies for a transition to non-chemical weed control.