The Impact of Risk on Pest Management Strategies

The paper analyses the effects of pest related uncertainty on pest control tactics in the short run and the choice of pest management (PM) strategies in the long run. Under quite general formulation of a pest management problem, increasing uncertainty in the initial pest density will not necessarily lead to increased pest control application rate. It will do so, however, when the control is effective, initial pest density is low and future effects of the control are disregarded. When surviving pest population is uncertain, the conditions for a positive effect of increased uncertainty on the level of pesticide application is more likely than the former. When uncertainty is embedded in the kill function or the damage function, the resulting change in pesticides intensity may be in the opposite directions, depending on the effect of uncertainty on the first derivatives of the respective functions. This effect of uncertainty on pesticide use is shown to be determined by whether farmers perceive pesticides as risk reducing or risk enhancing inputs. Analysis oflong run pest management decision shows that pesticides are likely to be conceived by farmers as risk reducing, so that their use is increased with higher uncertainty. However, they may very well be risk increasing in the long run. Even if the risk averse farmer is aware of this seeming contradiction, he does not have economic incentives to change his decisions, since the long run risk increase is the result of the pest management policies undertaken by all the farmers, and his individual long run risk increasing effect is negligible.