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Farm Size Distribution and Specialization and Their Impacts on Pesticide Use in Conventional and Organic Agriculture


Organic agriculture has grown tremendously over the past two decades. The large-scale production emerging with consolidation could undermine the positive perception of organic food. Pesticide use and cropland consolidation have become two rising concerns regarding the development of organic agriculture. More evidence is needed to quantify the benefit of pesticide use in organic agriculture relative to its use in conventional agriculture and to evaluate how it is affected by the growth of organic agriculture and by the consolidation of an increasing share of organic acres into large farms. My dissertation research considers the environmental impacts of pesticide use, in both conventional and organic crop production, the consolidation process, and the interaction between farm size and pesticide use. My dissertation includes three essays.

In essay 1, I examine the environmental impacts of pesticide use in fields treated with conventional and organic pesticide programs using the California Pesticide Use Report (PUR) database. The PUR database provides a detailed record of all commercial pesticide use in California since 1990. I find that pesticides used in organic production had smaller negative environmental impacts on surface water, groundwater, soil, air, and pollinators compared to pesticides used in conventional production, which has a higher yield per acre and a lower pest-management cost.

However, the difference in the environmental impacts of pesticide use between the two production systems has declined in multiple dimensions. The environmental benefit from adopting organic production systems may be less than is commonly perceived. Two additional regression results find implications of total farm acreage and experience for environmental impacts of pesticide programs. Farms with more acreage are associated with the use of pesticides that have larger environmental impacts. More experienced farmers are associated with the use of pesticides that have greater impacts on surface water and groundwater, and less impact on soil, air, and pollinators. The environmental impacts of pesticide use in conventional agriculture remained stable in the study period regardless of changes in regulations and the use of active ingredients such as methyl bromide.

The change in pesticide use in organic agriculture is partially driven by the consolidation process. In essay 2, I identify individual organic fields in the PUR database, which allows me to document the occurrence of cropland consolidation, and assess the effect of consolidation on pesticide use in organic agriculture. Organic agriculture is increasingly characterized by the consolidation of production into the hands of larger operations. I leverage the PUR database to identify the organic field, and compare the impacts of organic and conventional pesticide programs and several dimensions of environmental quality.

Further analysis of the data reveals that pesticide use patterns are significantly correlated with the consolidation of organic cropland from 1995 to 2017. Although the number of organic farms increased, the acreage share of large farms increased, which is a clear sign of consolidation. Farms with larger organic acreage, holding other variables constant, applied sulfur and fixed copper pesticides more frequently than those with smaller acreage. As a result, they had greater impacts on surface water and smaller impacts on soil and air because those ingredients are more toxic to fish and algae, less toxic to earthworms, and have lower Volatile Organic Compound (VOC) emissions than other ingredients used in organic fields. The change in crop composition is another factor contributing to the change in the environmental impacts because the relationship between consolidation and pesticide use varies across crops. The results of this essay show how the environmental impacts of organic agriculture could continue to change as the sector grows.

The consolidation of acreage and value of production into a smaller number of larger operations has characterized U.S. agriculture for decades. Consolidation interacts with specialization, which is measured by a decline in the number of commodities produced per farm. In essay 3, I adapt and extend the endogenous growth model introduced in Lucas (2009) to explain changes in the size distribution of farms over time. Farmers have knowledge regarding the production of each crop, and this knowledge grows through learning from others. Increased knowledge increases the profitability of producing a specific crop. Knowledge regarding other crops also helps, to various degrees. As specialized knowledge accumulates, the opportunity cost of producing crops that farmers know less about increases, which reduces the number of crops produced by each farmer. The farm size distribution is an equilibrium outcome. As such, it effectively is a transformation of the underlying distribution of knowledge. Simulation results demonstrate how model parameters including learning rate, budget share, and elasticity of substitution alter the distribution of farm size and specialization.

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