Public Regulatory Roles in Developing Markets:The Case of Pesticides

Prabhu L. Pingali and Agnes C. Rola a/

IntroductionThe public regulation of input or product markets is warranted when one or more of the following market imperfections exist: 1) use of the product creates negative externalities; 2) end users face serious occupational hazards; 3) product quality is variable since standards are hard to enforce; 4) information about product efficacy is less than perfect; and 5) questions about ethics in marketing and trade arise since producers/exporters are more knowledge able on each of the above issues than the importers or end-users.

The pesticide industry qualifies for public regulation by each of the above criteria. The human health and environmental consequences of indiscriminate and injudicious pesticide use are well documented both for the developed and developing countries. The public policy question with respect to pesticides in the developing world is not if regulations are appropriate, but rather, what types of regulations are appropriate?

Discussions of pesticide regulation in developing countries center around three broad sets of questions: i ) should poor countries divert resources towards environmental protection; ii) do countries face a trade-off between productivity growth and environmental protection; and iii) are developed country regulatory policies appropriate for and transferable to developing countries?

This paper reviews the current scenario in developing countries with respect to pesticide use, trade and regulation, and assesses potential regulatory options for reducing the social costs of pesticide use. Regulatory policies are discussed relative to the above three questions and viable regulatory options are determined.

Current Scenario for Pesticides: Markets, Use, Effects and Regulations

Structure of the International Pesticide MarketThe international pesticides industry is characterized by vertical integration, a high degree of export orientation, product diversity, and a variety of important connections with national economies. It is also a capital-intensive and research-intensive industry, involving dominant market positions by relatively few large companies and by a leading role on the part of relatively few countries (Boardman, 1986). World market growth has remained steady in the 1970s and 1980s at around 5 percent a year. Before the 1960s, ________a/ Agricultural Economist in the International Rice Research Institute, Los Baños,Philippines and Associate Professor in the University of the Philippines at Los Baños.

pesticides were mostly consumed in industrialized nations. With agricultural modernization in developing countries in the mid-1960s, third world exports became an important part of the international pesticide industry. Traditional exporters of agro-chemicals are Britain (where chemicals constitute the third largest export), the United States, Germany, France, Switzerland, Italy and Japan. In the 1960s and 1970s, these countries accounted for about 75 percent of world chemicals production (Boardman, 1986). Approximately 85 percent of all agro-chemicals used in Asia are imported from the above countries (UN, World Trade Statistics). A large proportion of the pesticides exported to the developing countries are products that are not used in the developed world on environmental and health grounds. Weir and Schapiro (1981), for instance, pointed out that at least 25 percent of U.S. pesticide exports are products that are banned, heavily restricted or have never been registered for use in the United States. However, U.S. law (The Federal Insecticide, Fungicide and Rodenticide Act) explicitly states that banned or unregistered pesticides are legal for export. Table 1 provides an example of the registration status in the U.S. of chemicals popularly used in the Philippines. Importing countries routinely recommend the use of these products, either due to ignorance or due to their being cheaper than the less toxic products.

Agricultural Modernization and the Demand for Agro-ChemicalsIn the developing world, agricultural modernization, which is meant to include agricultural intensification and increased market orientation, has led to a rapid growth in the demand for agro-chemicals. The rapid spread of the Green Revolution for cereal crops, in Asia during the late 1960s and the 1970s, led to an upward shift in the demand for modern agricultural inputs, including pesticides. Although pesticides as a whole experienced a rapid growth in demand, an examination of the trends for chemical sub-groups, such as insecticides, herbicides and fungicides, indicates that there was substantial variation by country/region and by crop. The following is a stylized representation of the factors leading to these differences.

Table 2 shows the differential effects of increasing land scarcity and increasing market orientation on the demand for chemicals. Consider first, a sparsely populated subsistence society with limited access to markets. Agriculture in such societies is characterized by extensive land use and an almost complete reliance on non-traded inputs, such as farmyard manure. Pest pressure is low in such cultivation systems and is kept that way through a variety of management practices, such as crop rotations and the use of traditional cultivars with known resistance to chronic pest problems.

Increasing land scarcity due to population growth in subsistence societies leads to agricultural intensification i.e., increased intensity of land use (Boserup, 1965; Pingali and Binswanger, 1987). Where the opportunity costs of family labor are low, food production continues to rely predominantly on non-traded inputs. Pest pressure increases with intensification due to increased carryover of pests spatially and temporally. While increased weed pressure is handled by family labor, increased insect pressure is no longer amenable to traditional management practices and small amounts of insecticides begin to be used for cereal crops, even in subsistence societies. Low to moderate amounts of fungicides also tend to be used for crops such as cotton, tobacco, and horticultural products, especially fruit and vegetables (Table 3).

The contrasting scenario is one of a sparsely populated area that has excellent market access. In this case, agricultural intensification will be high due to high land values, but unlike the subsistence case, the opportunity cost of labor will also be high, hence the high levels of traded input use. While increasing insect pressures can be controlled through appropriate crop rotations and seasonal fallows, the dominant constraint is weeds. High levels of herbicide use are the norm in such societies. High fungicide use can also be observed for horticulture crops, especially fruits and vegetables (Table 3). Where market access and land scarcity are both high, high opportunity cost of land and labor result in agricultural intensification with high use of traded inputs. The demand for all chemicals is high in such societies.

While cereals command the highest share of the insecticide market, per-hectare application levels are the lowest. Fruits and vegetables have the highest per-hectare application rates of insecticides and fungicides. For high value crops such as fruits and vegetables, the price premium for an unblemished physical appearance is substantial. Risk averse farmers tend to apply pesticides heavily to capture this price differential. In the case of rice, the most important cereal crop in Asia, pesticides do not enhance physical quality in any way, and there is no price differential to capture (Rola and Pingali, 1993). Given the positive income elasticity of demand for fruits and vegetables, the long term prognosis for developing economies is one of increasing areas under these crops and, in the absence of alternative pest control strategies, an increasing share of the agro-chemical market.

Perceptions of Pest Problems and Pesticide Use PracticesIn an extensive review of case studies from across Asia, Rola and Pingali provide documentation that policy-maker perceptions of yield losses are higher than farmer perceptions of yield losses which, in turn, are higher than actual yield losses. Both farmer and policy-maker perceptions of pest related yield losses are anchored around exceptionally high losses during major infestations, even when the probability of such infestation is low. Improved farmer experience and education, especially through targeted training courses, could help farmers evaluate pest related yield losses more realistically,

and reduce pesticide use (Pingali and Carlson, 1985). Similar efforts to improve policy-maker perceptions could help reduce the reliance on pesticides as the only viable method of pest control. Even where perceptions on yield losses and on the efficacy of pesticide use are relatively accurate, farmer knowledge on appropriate safety practices and the adverse consequences of pesticide use tends to be limited.

The literature abounds with evidences of third world farmers using pesticides unsafely and injudiciously [see for instance Bull (1982), Boardman (1986), Rola and Pingali, (1993), Warbuton et. al., (1993)]. Acute poisoning in Philippine rice farm households can be traced to unsafe practices in handling, storing, and disposing of pesticides for several reasons. First, even if farmers are aware of the hazards, they cannot afford appropriate clothing, adequate storage and disposal systems. Most farmers, however, do not know about the consequences of mishandling chemicals. Hence farmer training on proper pesticide handling could minimize unnecessary exposure to chemicals.

The two other causes of pesticide exposure leading to poisoning are farmers' ignorance of re-entry intervals and the use of defective sprayers. A re-entry interval is the time needed to allow a chemical to dissipate in the environment. Most organophosphates (OPs) and organochlorines( OCs) used in the tropics, have a re-entry interval of at least 72 hours, but farmers usually go back the same day to see if the spray has worked (Rola and Pingali 1993). It is also suspected that few manual weeders (traditionally women) know about the re-entry interval requirement. In any case, no danger signs are posted on newly sprayed fields. Thus, weeders as well as children and other household members in or nearby newly sprayed fields are directly exposed to pesticides. The knapsack sprayer is notorious for its mechanical defects and leakages, yet it is the most popular means of spraying pesticides in the developing world. Little has been done to improve the safety of this equipment.

Productivity Benefits of Pesticide UseDiscussion of the productivity benefits of pesticides revolves around the presumption that pesticides are a risk reducing input, i.e., the variability of yields are reduced. One needs to question this presumption, both for insecticides and for herbicides. In the case of insecticides Rola and Pingali (1993) provide empirical evidence for rice production that shows insecticide applications increase yield variability. Applying insecticides routinely, early in the crop season or on a schedule during the growing season (prophylactic application), disrupts the pest-predator balance. Predominant reliance on chemical control often leads to pest resurgence and frequent large scale infestations. Rola and Pingali found, for rice, that "natural control", (not applying any insecticides), in association with varietal resistance to be consistently more profitable than prophylactic treatments and economic thresholds. This result holds for both the risk neutral and the risk averse farmer.

In the case of herbicides, Pandey and Medd (1991) challenge the generalization of risk reduction made in the literature. They argue that an assessment of the source of risk is

essential in determining whether herbicides are risk reducing or not. Where the efficacy of herbicides is certain and the weed-free yield distribution is stochastic, increased herbicide applications can increase variability in profits.

Environmental and Health Impacts of PesticidesCareful measurement and documentation of the environmental and human health consequences of pesticide use is rare for agriculture in developing countries. In the case of rice, the International Rice Research Institute recently completed a detailed farm-level assessment in the Philippines of the long term impacts of pesticides (see Pingali and Roger, 1993, for the detailed results). A similar assessment is being done for potatoes at CIP in Ecuador (Crissman and Cole, 1994).

In the case of rice, Philippine evidence indicates that indiscriminate pesticide use can have serious environmental and health consequences. The environmental effects are primarily in terms of ground water pollution, reduction of vertebrate populations in surface water systems, and the disruption of the long term species equilibrium in the paddy eco-system. At current levels of pesticide use and given that the chemicals used degrade rapidly in the humid tropical climate, the environmental effects are small, but one should not discount the potential for larger future effects.

The health effects of pesticide use in the Philippines are, however, quite substantial (Pingali, et. al., 1994, Rola and Pingali, 1993 and Antle and Pingali, 1994). Eye, skin, pulmonary and neurologic problems are significantly associated with long term pesticide exposure. A majority of the pesticides which might be linked to these impairments are the highly hazardous Category I and II chemicals. While commonly available in the Philippines, they are banned or severely restricted in the developed world. Rola and Pingali (1993) found that the net benefits of pesticide use are negative when health effects are explicitly accounted for. Antle and Pingali (1994) found that pesticide related health impairments cuts farm household productivity. When pesticide use is reduced, the value of the positive health benefit of reduced pesticide exposure is invariably greater than the value of the crop lost to pests.

Status of Technological Alternatives to PesticidesIn the short term, the use of pesticides may still be necessary, especially in non-rice crops where some quality enhancing effects bring higher profits. In rice however, the development of host plant resistance and integrated pest management (IPM) strategies would minimize, if not totally eradicate the use of pesticides in the longer term.

Technology for IPM that recognizes the receptivity of different farmer groups has been developed but is not widely available. More constraining than the availability of technology is the lack of facilities and support services for extension personnel to do their work. Many countries do not have functional IPM extension programs because the people who would participate in them have no means of travel to farms or demonstration sites.

In a related problem, few national programs have scientists who can generate the IPM technology themselves. Few scientists have been exposed to contemporary knowledge on IPM, and few guidelines exist on the extrapolation domain of IPM technology generated at one locality for use in another (Teng 1990).

The use of IPM strategies in developed countries such as the United States has been made possible by a wide variety of public initiatives, i.e., land grant universities have been responsible for developing IPM strategies, for evaluating alternative strategies, and for popularizing the "best" strategies in the farm community. Continued use of IPM in some areas depends on public provision of advising services and the supply of pest control advisors is similarly dependent on the training capacity of land grant universities (Lichtenberg, et al 1991). At this time the IPM research and extension infrastructures are lacking in developing economies like the Philippines.

International and National Regulatory Mechanisms and Institutions

International Regulatory MechanismsIn his discussion on the political economy of pesticides, Boardman (1986) noted that the regulatory environment has become an increasingly important factor in the development or production of pesticides by companies. In turn, industry structures have both set limits to and provided opportunities for regulatory innovations by governments.

In the 1980s and 1990s, growing environmental movements in developing economies have led to a growth in regulatory agencies and increasing pesticide restrictions. There are at least three general groups involved in regulating the international pesticide industry. These are: 1) the self-regulatory body of the industry itself called the GIFAP; 2) inter-governmental organizations such as the UN; and 3) the interest groups such as the Pesticide Action Network (PAN).

1) THE GROUPMENT INTERNATIONAL DES ASSOCIATION NATIONALS DE FABRICANTS DE PRODUCTS AGROCHMQUES (GIFAP)

The general objective of this organization is to protect the interests of the world pesticide industry. GIFAP lobbies against excessive regulation of the industry and projects the industry perspective in public debates. It has also been very effective in protecting industrial patents and property rights and in monitoring product quality. For instance, in the early 1980s, GIFAP pressed for withdrawal of most-favored nation status for Hungary because of an alleged lack of respect for chemical patents by that country (Boardman, 1986).

2) INTER-GOVERNMENTAL ORGANIZATIONS

Among the inter-governmental organizations, the United Nations Food and Agriculture Organization (FAO) and the World Health Organization (WHO), have taken active roles in international pesticide regulations since the 1950s. The two were joint founders of the Codex Alimentarius Commission, designed in the early 1960s as a body to oversee and promote improvements in food standards in their various member states. The Codex Committee on Pesticide Residues has set standard values for maximum residue levels in food and the environment that could be used as a guide by national agencies as regulatory measures. However, there is a lackluster response to the Codex by national agencies, basically because of the high cost of residue monitoring. Also, national regulatory priorities are weighed more heavily towards occupational safety rather than monitoring food quality.

In addition, the WHO has designed hazard classifications for different classes of compounds, where Category I is considered extremely hazardous, while Category IV is the least hazardous. Most organochlorines (OCs) and organophosphates (OPs) are in the Category I classification (with oral and dermal 50 values). This hazard classification could potentially help countries determine the types of chemicals they would like to import and register.

The FAO, on the other hand drafted the International Code of Conduct on the distribution and use of pesticides (FAO, 1986). The code calls on the pesticide industry at all levels, as well as exporting nations, international agencies, and public sector organizations, to assume a share of responsibility f or ensuring safety in the use of pesticides. The codes' provisions are entirely voluntary and there has been considerable controversy over the extent to which they are respected in practice (Loevinsohn 1993). Loevinsohn (1993) also reports widespread infringements of the code as evidence is presented regarding misleading advertising, inappropriate packaging, poor quality control, and marketing of banned and dangerous products.

Together with the United Nations Environmental Program (UNEP), FAO has adopted another regulatory scheme based on the principle of "prior informed consent" (PIC). In this scheme, a designated authority in the importing country must explicitly agree to the import before it can take place. In the PIC scheme, the importing country will be given the information about the registration status of chemicals in other countries. Pesticides banned or severely restricted in five or more countries will be included in the PIC list; and importing countries will be informed of such.

This scheme hinges on the importing government's ability to evaluate and act on the notices it receives. But this capacity is deficient in many developing countries. And as Loevinsohn (1993) has stressed, PIC begins with the decisions industrialized countries have taken to protect health and the environment within their own jurisdictions. However, industry has often claimed that a different balance of risks and benefits may lead developing countries to judge acceptable a number of pesticides strictly controlled in

industrialized countries (Willis 1986). The ultimate goal of the PIC is to provide information to national agencies regarding the chemicals being traded so that they can make rational choices.

3) NON-GOVERNMENTAL ORGANIZATIONS

Several multi-purpose environmental non-governmental organizations have also been concerned with pesticide issues. Among these are the International Union for Conservation of Nature and Natural Resources (IUCN), and some regionally organized trans-groupings such as the European Environmental Bureau (EEB), or the Pesticide Action Network (PAN) of the International Organization of Consumers Unions (IOCU). With support from many developing countries, these NGOs have mounted lobbying efforts in regulatory bodies. For instance, they have worked with governing councils of FAO and UNEP to push the PIC process in developing economies. However, certain realities have to be contended with.

The United States, the United Kingdom and the European Community have instituted programs to notify importing countries of shipments of unregistered or severely restricted pesticides. In practice, however, notifications are often received well after the pesticides have arrived and do little to enable importing countries to control hazardous imports (Pallenaerts, 1988). The future state of communications technology and governments' stringent regulations could improve upon this situation and move forward to the preferred state of safe chemical use.

Developing Countries' Regulatory CapabilitiesIn most developing countries, increasing use of pesticides can be directly attributed to agricultural modernization programs. In the Philippines, the spread of irrigated rice agriculture in the 1960s triggered the development of a full blown pesticide industry. Pesticides in most developing countries are imported, as it is very expensive to develop raw materials.

Pesticide regulations in developing countries lack uniformity of approaches, as observed by Boardman (1986). It was only during the 1970s that many countries began to think about regulatory requirements. In the Philippines for instance, the regulatory body instituted in 1978 was originally given the control of the importation, manufacture, formulation, distribution, sale, transport, storage, labeling, use, and disposal of pesticides and fertilizer. Today, this agency is mandated to register new pesticides, regulate pesticide availability and use, license handlers, set residue limits on food and feed, monitor compliance of regulatory policies, supervise imports, and design pesticide training programs. In the Philippines as in most developing economies, enforcement capabilities more often lag behind laws and regulations, or in the extreme, could be non-existent. Complexity of the regulations and the high resource requirements for enforcement have jointly contributed to the failure of past regulatory efforts.

Preferred Scenario for Pesticide UseAn optimal pesticide policy revolves around possible ways of ensuring its effective use, that is, of promoting agricultural productivity while minimizing the health and environmental effects. Following are the elements of a preferred scenario for pesticide use.

JUDICIOUS AND SAFE USE OF CHEMICALSThe movement away from prophylactic pesticide applications to a holistic management of the plant, pest, and predator system will reduce pesticide requirements, even for intensively cultivated systems. However, while integrated controls are knowledge- intensive and location-specific, they require substantial allocations of technical and administrative resources in farmer training and extension programs. Farmer training ought to also include safety procedures in handling, storage and disposal of chemicals.

THE SUBSTITUTION OF THE LESS HAZARDOUS CATEGORIY III AND IV CHEMICALS FOR THE MORE HAZARDOUS CATEGORY I AND II CHEMICALS

Evidence from the developed world and more recently from the developing world indicates that there is no productivity loss in substituting Category I and II chemicals with Category III and IV chemicals. In fact, if the health gain associated with reduced exposure to the highly hazardous chemicals is accounted for, then there could actually be a net productivity gain in the switch to Category III and IV chemicals. The opportunities for selective banning or taxation are discussed below.

IMPROVED UNDERSTANDING OF THE PRODUCTIVITY, HEALTH, AND ENVIRONMENTAL IMPACTS OF AGRO-CHEMICALS

In registering or re-registering pesticides for use in a country, the regulatory agency ought to have an improved understanding of the productivity benefits as well as the risks of pesticide use. Risk-benefit assessment is the appropriate analytical tool for making such decisions. While country-specific measurements of impacts would give the most accurate technical coefficients for risk assessment, the value of similar information collected elsewhere should not be discounted, at least in a prior probability sense. An improved understanding of the trade-offs would allow the regulatory agency to be more discriminatory in its choice of chemicals to import and/or register. Farmers with improved knowledge of the consequences of pesticide use could be equally discriminating in their choice of pest control strategies.

IMPROVED AND STANDARDIZED SPRAY EQUIPMENT

Factors leading to the continued production of inferior sprayers include the lack of incentives for local manufacturers to produce good quality sprayers, farmers' poor appreciation of quality and safety features and the lack of national minimum product standards (Mamat et al 1993). To

overcome these problems would require the establishment of research programs in national agricultural research institutes to design safer and more efficient knapsack sprayers that can be produced locally; to upgrade farmers' knowledge and improving their appreciation of good quality sprayers and safer spraying practices, and to urge regulatory agencies to establish minimum standards for knapsack sprayers.

INDUSTRY'S CORPORATE RESPONSIBILITY

There are at least two critical areas that industry could target with regard to enhancing safety. One is the promotion of safer pesticides, and second is the safe packaging and proper labeling of products for farmers' use. The corporate sector ought to expect that as incomes grow in the developing world, the demand for safer pesticides will increase just as it did in the developed world. This shift will come not only from the emerging environmental lobbies in these countries but also from increasingly safety-conscious farmers. The challenge for the industry is to reduce the unit cost of production of the less hazardous chemicals, and thereby price them at levels comparable to the more hazardous but cheaper Category I and II products.

On the matter of packaging, major changes occurred during the 1980s and further progress is expected during the 1990s. Recent advances in plastics and molding technology have made pesticide containers safer in the developed world. Manufacture of these in the developing world is still limited. Returnable containers are now commonly used in the United States and Europe. Made of stainless steel or plastics, they can be returned to the supplier for refilling. This eliminates the problems of container misuse and disposal. However, this approach requires a good supply and transport infrastructure, often lacking in developing countries (Dollimore, 1993). Further, potential use of water-soluble sockets has also occurred as this technology has improved. Although these sockets were originally designed to contain powders, they are now being used for liquid formulation. Again such technology is expensive for developing economies. With respect to labeling, while FAO/WHO have issued standards (FAO, 1986), their adoption and implementation by member countries is poor. User friendly labels could significantly reduce the risks faced by farm households.

REGULATORY OPTIONS FOR SAFER PESTICIDE USE

Several regulatory options are available for moving towards the preferred scenario of safer and reduced pesticide use. Some of these are discussed below. It ought to be recognized, however, that the most effective means of regulatory control are pesticide registration and taxes. The costs of enforcement are substantially higher for all other options.

Banning Certain Chemicals

The current regulatory debate in developing countries is on whether the importation of the highly hazardous Category I and II chemicals ought to be banned. In developed countries, the registration of many of these chemicals has been canceled or has been allowed only under very restricted conditions. The U.S. evidence of a ban on the use of certain pesticides has shown that although the initial impact is of a decrease in output supply, in the long run and with additional land, the fall in supply is small( Lichtenberg et al 1991). Eliminating 57 chemicals in Indonesia has not led to a fall in food supply. The resulting change in the relative price of pesticides led to an increase in the use of alternative non-chemical methods and integrated controls, such as use of IPM.

The Indonesian experience allows us to question the traditional argument about pesticide cancellation: that it always leads to "technological regression," and therefore a decrease in output supply (Just, et.al., 1982). This argument assumes limited substitution opportunities across chemicals and even smaller possibilities for substitution among chemical and non-chemical methods of pest control. Neither assumption is valid. Moreover, the Indonesian experience has shown that the cancellation of broad spectrum insecticides has improved the pest/predator balance, prevented pest resurgences and therefore increased the productivity of the pesticides applied (Rola and Pingali, 1993).

Where opportunities for input substitution are not available, Lichtenberg et al (1991) argue that pesticide bans increase the comparative advantage of regions that are less vulnerable to pest infestations or better suited to alternative means of pest control. For example, fruit and vegetable production in hot and humid climates is susceptible to high disease pressure; pesticide bans would result in the movement of this production elsewhere. The positive connotation of this argument is that the hot and humid tropics will concentrate on crops that are more suited to that environment and hence less susceptible to pest pressures.

Tariffs/TaxesPrice and tariff interventions could be used to encourage the shift to safer chemicals and to non-chemical pest control practices. Very high tariffs, especially on pesticides on the PIC list, could discourage importers from promoting these chemicals. Very high rates of taxes of Category I and II, versus Category III and IV could encourage the farmer to shift to safer chemicals.

Antle and Pingali (1994) provide simulation results for rice production to show that, while a uniform tax on insecticides and herbicides has negative effects on productivity, a tax on insecticides alone has a significantly positive effect on productivity. Insecticides used in thePhilippines are the highly hazardous Category I and II chemicals. A reduction in the use of these chemicals has significantly positive farmer health benefits, which leads to an increase in productivity. The loss in productivity resulting from increased pest-related yield losses is more than offset by the gain in productivity from improved health. The social benefits of restricting insecticide use are substantially higher than the social costs. The same argument does not hold for herbicides, because: i) herbicides used are, generally, the less toxic Category III and IV

chemicals, therefore the health benefits are smaller; and ii) the yield response to herbicide use is substantially higher than the response to insecticide use.

Monitoring Residue Tolerance LimitsFollowing the lead of developed country regulatory agencies, several developing countries have set up pesticide residue monitoring units. These units are meant to track residue levels in food, water and, in some cases, the long term build-up of pesticides in the soil. In general, pesticide residue monitoring tends to be resource intensive and not very effective. Monitoring of internationally traded food products is the only viable residue screening activity. In this case however, producers themselves have an incentive to adhere to international standards. In the case of domestically traded food products however, in a developing country context, the sheer volume of producers and the large number of market outlets makes monitoring quality exorbitantly expensive and non-viable.

If the regulatory objective is to make food supplies and the environment safer, then there are more effective means of achieving it than residue monitoring. A three pronged approach aimed at producers would be: i) cancellation of the highly hazardous and/or persistent chemicals; ii) selective taxation to make the liberal use of all chemicals expensive; and iii) farmer training in the judicious and discriminate use of chemicals.

Enforcing Pesticide Safety StandardsSafety standards can cover the broad spectrum of activities associated with the use and handling of pesticides. This includes sales, storage, application and disposal. The most effective means of setting these standards is through clear labeling, through verbal or pictogram warnings. Labels can help farmers discriminate among chemicals and help provide them information on appropriate use and disposal. Regulation via verbal labels are only effective in highly literate societies. Pictograms are an alternative for less literate societies, however, these may not be universally understood, especially in the developing world such that more education and mass communication is needed. Hence, label regulation is effective only if complimentary investments are made in training farmers to read and interpret them.

In developing countries, substantially greater resources have to be devoted to monitoring product quality at the retail level. Comparisons of label information with the contents of the pesticide bottle have revealed substantial variability in the type and the quality of the material. Regulatory control of dealers, through appropriate licensing, training and monitoring, could improve not only the efficacy of the compounds but could also safeguard environmental and human health.

As mentioned earlier, application equipment should meet the minimum international standards. This would reduce farmer risk of unnecessary exposure to pesticides. Equipment that is properly calibrated and includes good nozzles promotes efficient use of chemicals and avoids drift. Finally, substantial future work needs to be done on comfortable and affordable protective clothing for the farmer-sprayer. There is enough

evidence to show that protective clothing from the temperate countries cannot be easily adapted to tropical conditions (Chester, et. al., 1993).

Conclusions

We would like to conclude this paper by returning to the three questions we posed in the introduction: i) should poor countries divert resources towards environmental protection; ii) do countries face a trade-off between productivity growth and environmental protection; iii) are developed country regulatory policies appropriate for and transferable to developing countries?

Poor countries do need to be concerned with environmental protection, in the case of pesticides, for several reasons. First, pesticide-related externalities have a negative effect on productivity, especially the reduction in labor productivity resulting from impaired health due to direct and indirect exposure to pesticides. Second, in discriminate pesticide u \se can have long term negative consequences on the farm environment, especially in terms of disturbing the ecological balance. For instance, prophylactic insecticide applications can disrupt the pest/predator balance in favor of pests, and thereby lead to a build-up of these populations in intensive monoculture systems. Third, countries do not remain poor forever. As incomes grow, the demand for improved environmental quality increases, thus, regulatory policy ought to be forward-looking and anticipate this increased demand.

It is not possible to make a generalization regarding the trade-off between productivity and environmental protection that could result from pesticide regulation. In the case of rice, with the progress made in varietal resistance, the trade-off is small. In the case of vegetables, where the progress in varietal resistance has been slow and physical appearance commands a price premium, the trade-off can be high. Detailed crop-by-crop assessments are needed to determine the magnitude of the productivity trade-off.

On the transferability of developed country regulations to developing countries, one can argue that direct transfers are generally not appropriate. The goals and objectives of developed country regulatory policies are often different from those of developing countries.

For instance, developed countries tend to be more concerned with food safety and hence emphasize residue monitoring, while developing countries would be more interested in reducing health hazards associated with pesticide exposure. There is no unique recipe for pesticide regulation; each country has to determine its own unique set of regulations based on needs, financial resources and enforcement capabilities.

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