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10.1 PESTICIDE REGULATION AND ITS ECONOMIC CONSEQUENCES

Together with fertilizer and improved seeds, pesticides have played a major role in increasing farm productivity. For example, corn yields rose three-fold over the past 40 years. Despite this positive effect, evidenced by the willingness of U.S. farmers to spend $8.3 billion on pesticides in 1996 (USDA, 1997), there is concern about contamination of ground and surface water, the effects on wildlife, and the potential health risks to farm workers and, because of residues, to consumers (Harper and Zilberman, 1989). These potential side effects have prompted the U.S. Government to strictly regulate pesticides.