Assessment of Pesticide Use Reduction Strategies for Thai Highland Agriculture: Combining Econometrics and Agent-based Modelling

224 Pages·2015·5.083 MB·English

by  Christian Grovermann

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DEVELOPMENT ECONOMICS
This study combines econometrics and agent-based modelling to evaluate the
e AND POLICY
impacts of a range of pesticide use reduction strategies in the context of Thai ur
highland agriculture. Pesticide productivity and pesticide overuse are quantified, ult Series edited by Franz Heidhues, Joachim von Braun and Manfred Zeller
while determinants of the adoption of innovations in pesticide use reduction are c
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estimated. On that basis, the Mathematical Programming-based Multi Agent g
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System (MPMAS), a bio-economic simulation model, is used to ex-ante assess
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the adoption of Integrated Pest Management (IPM) in combination with a series n
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of market-based instruments that boost the transition to more sustainable pest hl
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control practices. The MPMAS simulation results demonstrate that, over five Hi
years, it is possible to bring down levels of pesticide use significantly without ai Assessment of Pesticide
income trade-offs for farm agents. A proportional tax, increasing the price of h
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synthetic pesticides by 50% on average, together with bio-pesticide subsidies
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for IPM proves to be the most cost-effective and practicable policy package. o Use Reduction Strategies for
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IPM practices are adopted by up to 75% of farm agents and pesticide use es
reductions reach up to 34%. gi Thai Highland Agriculture
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· Umschlaggestaltung:
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n © Olaf Gloeckler, Atelier Platen, Friedberg
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Christian C. W. Grovermann holds an MSc in Sustainable Resource Manage- er Cover Design:
ment from the Technische Universität München and holds a PhD in Agricultural v
o © Olaf Gloeckler, Atelier Platen, Friedberg
Economics from the University of Hohenheim (Germany). He currently works r
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as an Associate Agricultural Officer at the Food and Agriculture Organization W. Conception de la couverture du livre:
(FAO) of the United Nations. His main research interests include agri-envi-
© Olaf Gloeckler, Atelier Platen, Friedberg

ronmental policy, impact assessment, sustainable agriculture and agricultural C.
innovation systems. C.
www.peterlang.com
Assessment of Pesticide Use Reduction Strategies for Thai Highland Agriculture
DEVELOPMENT ECONOMICS
AND POLICY

Series edited by Franz Heidhues, Joachim von Braun and Manfred Zeller

Vol. 73
Assessment of Pesticide Use Reduction
Strategies for Thai Highland Agriculture
Combining Econometrics and Agent-based Modelling

Christian C. W. Grovermann
Bibliographic Information published by the Deutsche
Nationalbibliothek
The Deutsche Nationalbibliothek lists this publication in the
Deutsche Nationalbibliografie; detailed bibliographic data is
available in the internet at http://dnb.d-nb.de.

Zugl.: Hohenheim, Univ., Diss., 2014

Library of Congress Cataloging-in-Publication Data
Grovermann, Christian C. W. (Christian Cornelius Wilhelm), 1982- author.
Assessment of pesticide use reduction strategies for Thai highland
agriculture : combining econometrics and agent-based modelling / Christian
C. W. Grovermann. — First edition.
pages cm. — (Development economics and policy, ISSN 0948-1338 ; vol.
73)
ISBN 978-3-631-65784-3
1. Pesticides—Thailand—Econometric models. 2. Pests—Integrated
control—Thailand—Econometric models. I. Title. II. Series: Development
economics and policy ; Bd. 73.
SB950.3.T5G76 2015
628.1'684209593—dc23
2014049517

D 100
ISSN 0948-1338
ISBN 978-3-631-65784-3 (Print)
E-ISBN 978-3-653-05134-6 (E-Book)
DOI 10.3726/978-3-653-05134-6

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Acknowledgements
First of all, I am very grateful to my supervisors at the Department of Land Use Eco-
nomics in the Tropics and Subtropics, Hohenheim University: Prof. Dr. Thomas
Berger and Dr. Pepijn Schreinemachers (who now works at the World Vegetable
Centre in Taiwan). Their critical feedback, encouragement and technical skills
greatly supported my research, and I was able to learn a lot from them regarding
research content and methodology, as well as scientific rigour in general, all of
which will be of great use to me in the future. They also supported me to receive
funding from the Collaborative Research Centre G1 project, ‘The Uplands Pro-
gram’ (SFB 564) and to spent time at the project’s field office in Thailand. In this
regard, I would also like to acknowledge the Deutsche Forschungsgemeinschaft
(DFG), which financed SFB 564, as well as the Hermann and Edith-Karla Eiselen
Commemoration Foundation, which supported the publication of my disserta-
tion through a grant.
Being part of the Collaborative Research Centre not only provided me with
the necessary funding, but also gave me an opportunity to gain experience as part
of a large-scale, interdisciplinary scientific project, one located at the nexus of
applied and fundamental research. It also allowed me to gain important insights
into field research, as well as collaborative work and state-of-the-art science. I
am very thankful to my second official thesis supervisor, Prof. Dr. Dr. h.c. Franz
Heidhues, who was the Director of The Uplands Program for a number of years.
Discussing my research with him helped me to place my study within a wider
context and gave me the confidence to pursue my work. I also benefited greatly
from Thai members of The Uplands Program based at Kasetsart University, who
played an important role in my data collection and analysis activities, and en-
couraged me by showing a great deal of interest in my research. In particular, I
should thank Prof. Dr. Suwanna Praneetvatakul and Dr. Chakrit Potchanasin.
The farmers I studied in the Mae Sa watershed and in Doi Angkhang in northern
Thailand also deserve a special mention here, since they patiently provided large
amounts of data without receiving any direct benefits in return.
Moreover, I would like to thank my girlfriend and colleague Oom, who sup-
ported me a lot during the three years of my research project, both mentally and
practically, for example by making sense of the interviews I held with IPM farm-
ers in Doi Angkhang with her translations and explanations. I must also thank
my other colleagues at The Uplands Program and at Hohenheim University for
the many lively discussions I had with them, for sharing their knowledge with
V
me and for simply sharing good times together. I was very fortunate to have very
pleasant, intelligent and entertaining company during my Ph.D. project.
Last but not least, I would like to express special thanks to my parents, who
during my research were always there for me with a sympathetic ear, cheering
me on during the difficult stages of my Ph.D. research and writing, and relieving
me of the many everyday burdens I would normally have endured during such
a stressful time.
VI
Summary
The rapid growth in pesticide use has become a significant problem for Thailand,
as it has in many other developing countries with intensifying agricultural ac-
tivities. Risks to farmers’ health during application and picking, the exposure of
consumers to chemical residues on food, as well as the contamination of water
bodies and the decline in ecosystem resilience, are among the consequences of
heavy pesticide use in Thailand. Especially in the north of the country, the adop-
tion of high-value fruit and vegetable crops has caused farmers to heavily rely
on agrochemicals, with the use of highly toxic pesticides now being widespread.
For several decades policy-makers in Thailand have provided an environment
favourable to the spread of synthetic pesticide use. Countervailing efforts aimed
at the diffusion of Integrated Pest Management (IPM) activities since the 1990s
and, more recently, the certification of Good Agricultural Practices (GAP), have
so far had a limited impact. With increased awareness of the negative conse-
quences of heavy pesticide use and its reduction firmly on the political agenda
nowadays, more information on the economic conditions needed to reduce the
use of pesticides and the policies needed to do so is required.
This research study attempts to fill this knowledge gap and generate new
insights on pesticide use, based on the following three objectives. First, it
aims to quantify pesticide productivity and pesticide overuse, second, it ex-
plores determinants of the adoption of sustainability innovations, and, most
importantly, it evaluates the adoption of IPM in combination with a series of
market-based instruments that can boost the transition to more sustainable
pest control practices, such as taxes and subsidies. Econometric approaches
lend themselves to the analysis needed to meet the first two objectives. Mean-
while, for the third objective an ex-ante assessment of the results of a simula-
tion model was deemed a suitable approach to take, with the Mathematical
Programming-based Multi Agent System (MPMAS) providing an effective and
comprehensive policy evaluation tool for such a purpose.
These different methods are applied here using farm- and plot-level data from
one intensive upland vegetable production system in northern Thailand – the
Mae Sa watershed. The results of the econometric analysis were directly integrat-
ed into the simulation model in order to account for the empirical relationship
between pesticide use, pest damage and output, and in order to predict agent
innovativeness, using the estimated innovation adoption determinants. Innova-
tiveness is used to assign agents to innovation segments and, consequently, define
their level of access to innovations, which in this case refers to IPM for leafy
VII
vegetables production. An MPMAS model is used to assess pesticide use reduc-
tion strategies, because it is able to give an exact representation of the innovation
diffusion process. Furthermore, it adds to the complexities of previous models
by simulating the response of a heterogeneous population of farm agents to the
availability of sustainable alternatives and market-based policy interventions. In-
dividual policies, or packages of policies, can thus be more accurately assessed in
terms of their impact and cost-effectiveness. Also, using the model, the assess-
ment of trade-offs between pesticide use reduction and income changes can be
traced back to agent-specific characteristics and land-use. Another unique aspect
of this research is the fact that it considers negative pesticide externalities when
estimating levels of pesticide overuse, and this allows for the comparison of tax
scenarios within the model with the predicted difference between private and
social levels of optimal pesticide use.
The findings show that about 80% of the pesticide quantities applied is in
excess of the social optimum, while the difference between the private and so-
cial levels of overuse is small in the case study area. Therefore, the results of
the econometric analysis suggest that including pesticide externalities in the
price of pesticides would only have a small effect in terms of reducing pesticide
overuse. The modelling results confirm that this is true for low and medium
tax levels, whereas a high ad valorem tax that increases pesticide prices by 50%
could achieve a moderate pesticide use reduction, of 8.5% on average. However,
it would also decrease average incomes by 7.5%. The values for proportional
taxes are similar, but due to their design they can somewhat better target highly
toxic pesticide use, making them the preferred option. The pesticide substitution
options shown by the MPMAS model reveal that the response to a tax is more
tangible than the econometric analysis implies; nevertheless, the simulated re-
ductions achieved with a high stand-alone tax fall short of the desired reduction
targets. The main benefit of introducing a tax rests upon the generation of reve-
nues that can be reinvested. In this context, the payment of direct compensation
based on farm size is evaluated alongside a series of policies to promote IPM.
A high proportional tax in combination with IPM access, and a 60% to 80%
bio-pesticide subsidy, is shown to be the smartest policy package. Substantial
pesticide use reductions ranging from 24% to 34% can be achieved over a five
year period, with a cost-effectiveness that is clearly superior to lump sum com-
pensation payments, price premiums for IPM produce, or transitional payments
for land under IPM. In the case of Thailand, the practicability and ease of imple-
mentation of a bio-pesticide subsidy is provided by the existing infrastructure
for input subsidies. The profitability of IPM is instrumental in its diffusion, as the
model shows, within five years 45% of agents adopt IPM on a proportion of their
VIII