How much are neonicotinoids worth to the European economy?

Lynn Dicks explains why one headline from an industry-funded neonicotinoid report was disingenuous.
 
In January, a report commissioned by Bayer and Syngenta calculated the economic value of neonicotinoid insecticides to Europe [1]. These companies are the major manufacturers of neonicotinoids, a class of insecticides that the European Commission proposes to partially ban from July because they pose unacceptable risks to bees.
 
One of the headlines quoted from the report in the UK farming press was that without neonicotinoids, UK winter wheat yields could decline by up to 20% (here for example). In some, but not all news stories, this was qualified as a calculation for difficult years, or adverse conditions (such as 2012). The headline was pulled out prominently by the website promoting the report (www.neonicreport.com), but I think it is misleading and exaggerates the economic case for neonicotinoids. Here’s why.
 
The economic value calculated for the whole of Europe in the report (amounting to somewhere between €2 and 4.5 billion per year depending on where you look) hinges largely on the estimated yield impacts of withdrawing neonicotinoid seed treatments. Yield impacts and the costs of pest control for each of six crops in ten European countries were derived by expert judgement. There are few method details in the report for how this was done, but one of the authors has told me they followed a standard method for eliciting expert judgment known as the Delphi process, with over 75 people consulted for each crop. Yield and cost estimates were checked against empirical measured values where available (references are not given), and then fed into economic models to come up with effects on agricultural revenues and jobs under five scenarios of neonicotinoid withdrawal. All of this seems reasonable.
 
By this method, the yield impact for UK wheat of withdrawing neonicotinoids entirely was a drop of 7%. And if all insecticides were withdrawn, leaving farmers no alternative crop protection technologies at all, yield losses of 16% were estimated.
 
So where does the 20% figure come from? In parallel, the analysts took another approach, which was to focus on some worst case scenarios using case studies in areas of high pest problems. A case study on UK winter wheat used a farm in East Yorkshire as an example. The estimated 20% yield loss comes from interviewing a small number of people from this farm, who were asked to give the worst possible outcome, assuming terrible weather combined with poor crop management practice due to overwork. The report authors very clearly separated this from the overall economic assessment.
 
Even so, it still may be reasonable to use this as an example of maximum possible yield decline for UK winter wheat, right? Except for one killer fact. The ‘penetration’ of neonicotinoids for UK winter wheat is only about 20%, including in areas with high pest problems. This market penetration is taken into account in the economic assessments, but not in the UK winter wheat case study. So only about one fifth of winter wheat in the UK is treated with neonicotinoids. Even if the very worst case was borne out across the entire country, you would only expect a total winter wheat yield loss for the UK of the order of 4%, not 20%, upon withdrawal of neonicotinoids.
 
Neonicotinoid use in wheat is increasing. Perhaps in an imagined future scenario where all farmers used them, the upper bound of 20% yield loss might be justifiable, although it was not derived from the rigorous expert assessment, or compared with any empirical measures, remember.
 
This brings me to a more general problem with calculating the value of insecticides in this way.
 
Existing crop management practices, used very effectively by UK farmers to produce winter wheat and other crops, have been developed in the context of available insecticides and fungicides. It’s possible to get a decent yield by planting wheat in winter, sometimes in the same field year after year, because we have chemicals to deal with pest and disease problems. If they become unavailable due to regulation, which is on the horizon for several groups of crop protection chemicals at the moment, farmers will change their practices and manage the crops differently.
 
This may take a few years to get right, but I would argue that assessing the effect of removing the chemicals without changing the management practices is bound to overestimate the value of the chemicals to society and the economy. As a colleague recently pointed out, it is a bit like estimating the value of your dining room table based on the value of the crockery that would be smashed if the table suddenly disappeared. If the table wasn’t there, the crockery wouldn’t be either.
 
Incidentally, winter wheat is excluded from the proposed ban on neonicotinoids (although seed treatments for summer- or spring-sown cereals are included). So what of the crops that are included in the proposed ban? The average yield decline estimated for UK oilseed rape without neonicotinoids is 5%, due to increased pest damage.
 
To put this in context, an 18% increase in yield due to insect pollination was recently demonstrated experimentally for oilseed rape [2]. We don’t know whether yield benefits from increased pollination will result from prohibiting neonicotinoids on oilseed rape. But we do know that such possible yield benefits from this and from enhanced natural pest control have not been taken into account when assessing the value of neonicotinoids to the European economy.
 

 
References
1          Noleppa, S. & Hahn, T. The value of neonicotinoid seed treatment in the European Union: a socioeconomic, technological and environmental review. Humboldt Forum for Food and Agriculture Working Paper 01/2013 (2013).
2         Bommarco, R., Marini, L. & Vaissiere, B. E. Insect pollination enhances seed yield, quality, and market value in oilseed rape. Oecologia 169, 1025-1032, doi:10.1007/s00442-012-2271-6 (2012).

 
 
 

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