The impact of high crop prices on the use of agro-chemical inputs in France
Biofuel policies have been a major driver of rising prices for biofuel crops around the world, such as rapeseed, corn and soy. In this paper researchers take France as an example and show that a tax of €0.05–0.27 per kg of fertiliser could help to limit French farmers’ use of fertiliser (driven by the high rapeseed prices resulting from biofuels policy).
They argue that this could help limit fertilisers’ environmental impacts, such as water pollution caused by nitrogen run-off, biodiversity loss due to land-use change, air pollution from fertiliser and the release of greenhouse gases through changes in land use.
The model used in this study was based on the researchers’ observations of the behaviour of around 500 farmers in the department of Meuse, north-east France, between 2006 and 2009. Although the researchers’ estimates are based on just one group of farmers from one French department, they say that the data on fertiliser use are representative of many regions in France. In a structural multi-output econometric model of individual farms the researchers finds that as higher rapeseed prices increase demand for both fertilizers and pesticides, they also encourage farmers to expand the area allocated to rapeseed. By increasing crop prices, biofuel policies may thus have adverse environmental effects. The study suggests that high rapeseed prices may encourage farmers to expand production of this crop at the expense of barley and set-aside land, which is important for biodiversity. Pesticide demand is also estimated to rise with higher rapeseed prices, by 0.33–1.6%, depending on the crop price.
World crop prices increased dramatically during the period 2006–2009. In this context of high crop prices, farmers may tend to increase the amount of agro-chemical inputs they use in order to increase yield and manage risks related to crop production. These practices could, however, have potentially adverse environmental effects in terms of loss of biodiversity and increased water and air pollution. This study uses a structural econometric model to measure the effects of crop prices on demand for agro-chemical inputs and land allocation. We study individual farms observed in the period 2006–2009 in the French Département de la Meuse. We estimate a multi-output profit function using farm-level panel data. Our results show that an increase in the rapeseed price, which is the principal feedstock for the production of biodiesel in France, has a positive and significant effect on demand for agro-chemical inputs. Higher rapeseed prices also induce an expansion in the land area allocated to rapeseed at the expense of barley and set-aside. These results suggest that changes in the rapeseed price, partly driven by biofuel policies, induce changes in demand for chemicals and land allocation which may have potentially adverse effects on the environment.
Bayramoglu, B., Chakir, R. (2016). The impact of high crop prices on the use of agrochemical inputs in France: A structural econometric analysis. Land Use Policy 55: 204–211. DOI:10.1016/j.landusepol.2016.03.027.
Europe is the world's second-smallest continent by surface area, covering just over 10 million square kilometres or 6.8% of the global land area, but it is the third-most populous continent after Asia and Africa, with a population of around 740 million people or about 11% of the world's population. Its climate is heavily affected by warm Atlantic currents that temper winters and summers on much of the continent. In the European Union, farmers represent only 4.7% of the working population, yet manage nearly half of its land area.
More like this
- New Food and Feed Life cycle analysis (LCA) database available from PE INTERNATIONAL In December 2014 the Food and Feed LCA database from PE INTERNATIONAL was released. It includes over 350 cradle-to-gate and gate-to-gate LCI datasets representing the m
- Nanotechnology applications in agriculture
- New report on prospects for UK crop production
- Five propositions to harmonize environmental footprints of food and beverages
- Do biofuel policies seek to cut emissions by cutting food?