Replacement of agricultural price supports by area payments in the European union and the effects on pesticide use

Abstract

This article determines the contribution of recent European Union agricultural policy reforms on the use of pesticides. Our theoretical model extends the multioutput generalization of the Lichtenberg-Zilberman damage control technology model developed by Chambers and Lichtenberg. Our empirical analysis uses farm-level data for a sample of French farms. Results suggest that price effects on the use of pesticides are always more elastic than area payment effects. This indicates that policy reforms consisting of a reduction in price supports in favor of area payments, may reduce application of crop protection inputs. Such policy changes, which represent a certain degree of decoupling, took place under the 1992 Common Agricultural Policy reforms. Copyright 2005 American Agricultural Economics Association.