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The Economy of phytosanitary protection and its challenges

The occurrence of pests and its control in agriculture involve a series of economic aspects, which are barely observed by players in society who are not involved directly with production activity and its supply chain. Indeed, evaluating the size of this economy is not a simple task even for agricultural economists. Besides aspects directly related to production, the challenge increases as concerns with sustainability and safety of methods used in the control of these agricultural pests arise.

 

Pests – insects and mites, diseases (caused by fungus, virus or bacteria) – and weeds cause losses to agriculture, namely production reduction, quality loss and, according to the situation, the death of plants or even the devastation of crops. Witches’ broom in cocoa in Bahia is an emblematic case.

 

Aiming to guarantee production and income, big or small producers, family farmers or not, adopt practices to control pests. The direct risk of the presence of pests is the production loss, but there are other resultants of the attack to the crops, such as possible restrictions to the domestic supply and exports and/or price shocks of these agricultural products and its byproducts, for both producers and consumers. In more severe cases, studies show that impacts may even affect food inflation indexes.

 

Therefore, it is expected that, when facing pest attack, producers search for control measures, encouraged by microeconomic reasons (preserve investments and resources in the activity, guarantee their profit margins and the economic viability of the activities) and macroeconomic results on the national agricultural revenue, on the trade balance and on inflation.

 

The production efficiency at the field is still a goal that should be pursued by all farmers, with direct effects to consumers, such as the reduction of food costs. The higher the productivity of crops, the more efficient are the producers. Therefore, their competitiveness is higher regarding price definitions, and theoretically, the value to consumers is lower.

 

This aimed yield, however, is affected directly by the weather, the quality of the soil and the ideal nutrition management, by the occurrence of pests and control methods to reduce impacts. There are numberless interdependent variables in a complex equation that, more recently, with advances in the human knowledge, were added components that will qualify the production more than guaranteeing its volume.

 

Researchers from Cepea have been following these subjects for years through collecting production costs, identifying technological alternatives of control that producers adopt in each crop, evaluating economic benefits of avoided losses when adopting pest control or, more recently, by monitoring major pests in agriculture and evaluating micro and macroeconomic impacts.

 

There is still a lot to do in this area and challenges are not conventional. It is necessary to encourage interdisciplinary cooperation among economists, statistics experts and agronomists; to develop adjusted methodologies to examine pest impacts accurate enough to isolate them from other effects, such as those from the weather; to increase the scope of data gathering at the field, aiming to reflect better the heterogeneity of all aspects, especially the human capital involved in the productive systems.

 

Cepea studies involve, up until now, the monitoring of economic impacts of pests in soybean, corn and cotton, crops that, in 2016/17, accounted for 86% of the planted area with grains and cereal, 35% of exports of the agribusiness, 16% of the employments in agriculture and more than 70% of chemical sales in the country.

 

Expenses involved in the three crops are very significant. Cepea estimates, based on field data, that, in this crop year, soybean producers may have spent with fungicides roughly 8.3 billion BRL, and, from this amount, 96% are allocated to control rust.

 

Considering the rust control, Cepea performed a simulation that producers did not use fungicides, saving circa 5.75 billion BRL in the 2016/17 crop. However, when considering potential losses, predicted in the technical literature, the lack of this control would result in 30% reduction in the supply estimated for soybean that year. The decrease, in turn, would certainly have effects on exports, on domestic prices of raw material and byproducts and on the revenue of the sector.

 

This exercise highlights, one more time, the size of the economy involved when it refers to pest control in agriculture. In the prevailing model for the agricultural production, and facing challenges of food safety, it is necessary to focus on strategies that guarantee that mentioned losses are technically and economically reduced. On the other hand, a huge effort of phytosanitary education is also necessary, in order for the use of control techniques occur appropriately, without losses for human health and the environment.

 

As a result, limits of the economic discussion about pest control have involved, over the last years, socioeconomic and environmental scopes. In other words, a problem that, for many years, had been limited to the choice of control methods that were compatible with the technological level of farmers and its economic viability, has started to interest because of possible implications to food security and the environment. These are indeed more complex problems because, in general, they are associated to the inappropriate use of chemicals.

 

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