Pesticide taxation and multi-objective policy-making: farm modelling to evaluate profit/environment trade-offs

Many countries in Western Europe have introduced voluntary programmes to encourage farmers to adopt environmentally more benign practices such as integrated pest management, but more policy action appears to be needed to meet the environmental quality levels now demanded. Input taxes could assist in meeting policy objectives. The issue considered here is the identification of the most appropriate specification of a tax instrument to reduce the environmental problems of agricultural pesticide usage. This paper takes a farm systems approach to evaluation. A case-study illustration is given for a specialist arable farm in the UK, combining an economic model of land use and production with a set of environmental indicators for pesticides. Linking these two components allows the identification of the potential trade-offs between achieving reductions in the environmental burden to a number of ecological dimensions and farm income. Different pesticide tax specifications vary in both the magnitude and the direction of their impacts. The results of the model indicate that either compromises will have to be made in environmental policy, or additional instruments will be required to counter-act the negative side-effects of some instruments. © 2001 Elsevier Science B.V. All rights reserved.