Economics of herbicide‐free crop production

Abstract

Ambitious pesticide policies aiming to reduce pesticide applications and risks have been introduced across Europe. Herbicides represent a major part of pesticide use, but the uptake of mechanical or agronomic alternatives remains low. We here explore underlying reasons and provide policy insights for supporting a transformation to herbicide‐free production, accounting for both economic and agronomic drivers. We develop detailed extensions to an existing bio‐economic modeling approach and use stochastic dominance analysis to assess the performance of non‐chemical alternatives to herbicides under different production and market conditions exante. We apply our approach to Swiss wheat production and find that herbicide‐free production is not viable without financial support, and thus requires additional per‐hectare agri‐environmental payments and price markups to be economically viable. We find that currently available support payments in Switzerland are sufficient in achieving economic viability of herbicide‐free production. Moreover, we confirm the relevance of risk and risk preferences and identify a risk‐reducing character of herbicide‐free production systems with support payments. Our analysis provides insights on potential drivers, trade‐offs, decision‐making factors, and policies for a transition to non‐chemical weed control.