Pesticide Demand and Integrated Pest Management: A Limited Dependent Variable Analysis

Over the past few decades, the private decisions of farmers about using pesticides, fertilizers, and some other inputs have resulted in significant offsite externalities. This is particularly true for pesticides.' They have caused a variety of wildlife, production, and human health externalities, such as fish and bird kills, the destruction of beneficial insects, worker exposure to toxic chemicals, and the accumulation of chemical residues in the food chain. Many scientists cite the latter as a major cause of cancer and reproductive problems in humans (Ames). Despite these commonly acknowledged risks, pesticides do improve agricultural productivity (Campbell). Growers have had little incentive to alter pest control practices because they perceived few, if any, profitable alternatives that would reduce negative externalities. However, the situation may be changing as continued reliance on chemical control has led to pest resistance, resurgence, and secondary outbreaks (Flint and van den Bosch). Hence, increasing amounts of pesticides must be applied at rising costs to maintain sufficient control. This has led to integrated pest management (IPM) programs which combine various pest control techniques-biological, cultural, genetic, and chemical. These programs attempt to exploit complementaries and achieve effective control while halting the upward spiral of ecological disruption and costs. This paper examines IPM on cotton in California's San Joaquin Valley, where it is typically offered to growers on a fee-per-acre basis by consultants with some knowledge in entomology, insect biology, and general agronomy. In general, they attempt to reduce pesticide use by applying chemicals more strategically than with ordinary calendar spraying regimens. However, it is also possible that this approach could result in greater pesticide use in some instances. Consultants may also recommend alternatives, such as pheromones, the release of terile insects, species specific biological insecticides, resistant plant varieties, or changes in cultural practices. This paper tests the hypothesis that IPM will ignificantly reduce pesticide use. It also examines the methodological issue of simultaneity between pes icide use and IPM adoption when the latter is represented by a binary choice. In so doing it adapts recently developed estimation techniques (Amemiya 1978, 1981, Heckman, and Nelson and Olson) and applies them to the estimation of cotton pesticide demand.