Sustainable Agriculture Literature Review - Boulder County

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Cost
Costs regarding pesticide use can be looked at in one of two ways: the cost of using them
and the cost of not using them. Costs of pesticide use can further be broken down into
direct costs to farmers (in terms of production expenses) and external costs to the
environment and human health. It is the concern of these external costs that has prompted
a desire for decreased pesticide use, but this reduction results in costs in the form of
reduced output and a subsequent decrease in employment in production, processing, and
handling systems. A reduction in output also suggests increased prices of crops necessary
for livestock production, thus having an even more widespread impact on our food
539, 540
industry.
Pesticide’s share of farm production expenses has grown significantly from less than one
percent in 1960 to nearly five percent in 1998, which now represents the largest chemical
expenditure in agricultural operations. 541 In 2008, expenditures on pesticides by Colorado
farmers totaled well over $113 million dollars. 542
Pesticides are partially responsible for increasing the productivity of agriculture during the
last century and continue to be a critical factor in reducing crop damage. Agricultural
pests, including animals, insects, plants, fungi, and bacteria, can lead to loss of crops or
reductions in crop yields, as well as reduce crop quality like blemishes on produce that can
reduce the value of agricultural commodities. Even as farmers explore alternatives to
chemical pesticide applications, such as biological control and genetically engineered (GE)
crops, pesticide production and use remains an important tool for farmers. 543
Much of the pesticide economics literature has focused on balancing the benefits of
pesticide application (less crop damage) with the total costs, including those borne by the
farmer (price of pesticide and cost of labor and machinery for application) and those
imposed on society (such as risks to human health and diminished environmental quality
from pollution). These studies have faced modeling difficulties due to the need to consider
544, 545
wide-ranging direct and indirect effects of pesticide applications.
One of the first studies conducted by Knutson et al. in 1990 described the possible effects
on U.S. agriculture and society of a hypothetical ban of herbicides, insecticides, and
fungicides. 546 Through their calculations, the authors hypothesized that year-end supplies
of corn, wheat, and soybeans would drop 73 percent without the use of pesticides,
requiring farmers to increase acreage to make up for reduced per-acre yields. A more
recent study conducted in 2004 found that in general, each dollar invested in pesticide
control returns about $4 in protected crops. When the study extrapolated out this ratio to
include all U.S. agriculture (as of 2004) the authors estimated pesticide control annually
saves approximately $40 billion in U.S. crops, based on direct costs and benefits. 547
However, the indirect costs of pesticide use to the environment and public health need to
be balanced against these benefits.
The cost associated with pesticides extends well beyond the farm. A Cornell study
published in 2005, estimated that the external costs of pesticides in the U.S. totaled almost
$10 billion annually. The Figure 27 below shows the breakdown of these estimated
costs. 548
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