Dr. Maria Vrachioli (Technical University of Munich) Water in pesticide application and rationalinefficiency: The case of Spanish crop producers.

Abstract

Agricultural activities can be characterized by the inefficient use of production factors, including water and pesticides. With water playing an essential role in the production process and its supply becoming more erratic and uncertain, it is essential to set sustainable agricultural policies addressing efficient allocation and use of water resources. In addition, inefficient use of pesticides could be associated with soil and water pollution. This study assesses to what extent inefficient use of water and pesticide can be attributed to farmers’ rational decisions and whether these rational decisions could lead to water externalities from pesticide pollution. The empirical application covers 148 arable crop producers in Spain using the Data Envelopment Analysis (DEA) model accounting for production risk through a state-contingent approach. The results reveal that technical inefficiency could be attributed to the crop producers’ rational decisions, which can be associated with environmental risks due to water pollution from pesticide run-off.