Source: OKLAHOMA STATE UNIVERSITY submitted to NRP
COSTS, BENEFITS, AND RISKS OF INTEGRATED PEST MANAGEMENT IN GRAIN STORAGE AND FOOD PROCESSING FACILITIES
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0192513
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2002
Project End Date
Sep 30, 2008
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
OKLAHOMA STATE UNIVERSITY
(N/A)
STILLWATER,OK 74078
Performing Department
AGRICULTURAL ECONOMICS
Non Technical Summary
(N/A)
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
21615403010100%
Knowledge Area
216 - Integrated Pest Management Systems;

Subject Of Investigation
1540 - Hard red winter wheat;

Field Of Science
3010 - Economics;
Goals / Objectives
The general objective of the proposed research is to improve the ability of the grain marketing system to respond to increased pesticide regulations and to consumer demands for wholesome, insect-free foods. The specific objectives are: (1) Estimate costs and risks associated with chemical-based and IPM-based pest-control strategies in stored grain facilities, and (2) Estimate costs and risks associated with chemical-based and IPM-based pest-control strategies in food processing facilities. These objectives directly address the following priorities in the Division's Strategic Plan (DASNR,1999): Priority Area 3 - Enhance Agriculture's Profitability, Competitiveness, and Sustainability, Goal 2 (Improve Farm, Ranch, and Agribusiness Management Practices), Priority Area 4 - Protect and Sustain the Environment, Goal 3 (Expand and Promote Strategies for Integrated Pest Management in Rural and Urban Environments).
Project Methods
To accomplish objective 1, costs of IPM and chemical-based strategies will be estimated using a partial-budgeting approach. These costs are in five categories: chemicals, labor, management, electricity, and equipment. A partial budgeting spreadsheet used by Rulon, Maier, and Boehlje (1995) and adapted by Lukens (2002) will be used to calculate costs for typical IPM and chemical-based strategies. Data for this model will be derived from published engineering, entomological, and economics data, historical prices, expert opinion, and field data. These data will be used to estimate cost parameters and to predict insect growth under various environmental conditions and treatments. Flinn and Hagstrum (1990b) have developed an artificial intelligence insect growth simulator that will allow simulating various pest management practices and their effect on insect populations. This model has been updated as new entomological data have become available (e.g. Flinn, Hagstrum, and Muir 1997), so the entomological basis for the proposed simulations is more than adequate. After costs are estimated, economic risks associated with IPM and chemical-based strategies will be measured. The sources of risk considered are sampling risk, risk of inadequate insect control, and risk of pesticide residue leading to rejection by buyer. Sampling risk is the risk that sampling will fail to detect an insect population that causes economic damage. It also includes the risk that sampling will lead to overestimates of insect numbers, resulting in costly, unnecessary treatments, and risk that sampling at point of sale will overestimate the number of insects in the population, causing economic loss to the seller. Inadequate insect control may result from improper choice of treatments, ineffective treatments (for example, fumigation of a leaky storage facility), treatment rendered ineffective by environmental conditions, or from insect resistence. Failure to control insects could result in insect-damaged kernels (IDK) and or other degradation, a grading designation of "infested", or simply rejection by a buyer. Detectible pesticide residue may result from failure of an applied pesticide to dissipate sufficiently, perhaps because of unfavorable environmental conditions or application too soon before sale, or from over-application of the pesticide. All of these likely will cause economic loss. Distributions for each relevant variable affecting costs and benefits for the firm will be estimated, and draws from these distributions will be used to estimate distributions of costs and benefits. These distributions will be evaluated using several approaches, including mean-variance, stochastic dominance, and value-at-risk. Value-at-risk measures could be used to answer the question, for example, "With 5% probability, what is the maximum loss the firm would incur using strategy Y." (Simons, 1996). Similar procedures will be used to accomplish objective 2, except that individual sources of cost within the broad categories outlined above are likely greater in number and type than for grain storage firms because of the greater complexity of food processing firms.

Progress 10/01/02 to 09/30/08

Outputs
OUTPUTS: An interdisciplinary team of scientists from Oklahoma State University, USDA-ARS in Manhattan, Kansas, and Kansas State University (including researchers and extension personnel in Grain Science, Entomology, Agricultural Engineering, and Agricultural Economics) had previously conducted a firm-level cost analysis of more than 13 separate insect-control strategies. The results indicated that some IPM strategies are less expensive than commonly-used chemical-based strategies and some are more expensive. Work under this reporting period assessed costs of failing to control insects in IPM and chemical-based strategies, so that total costs of insect control strategies can be compared. Results showed that insufficient control of insects is a significant cost, especially if insect problems are undetected. Also, sampling adds unnecessary cost in some situations where it does not change the treatment. These results are important because they help explain why some elevator managers are reluctant to adopt IPM techniques. IPM may become more economical if the cost of sampling can be reduced, or its effectiveness increased. Subsequent work used more realistic insect growth and immigration parameters, weather conditions, and effects of treatment methods. Results indicate that if insect immigration can be reduced by a factor of 10 (through sealing of openings in grain bins and cleanliness, for example), or if a particular year or location has lower temperatures and/or humidity, an IPM approach likely would be economical. Initial work also suggests that because of its correlation with time required for seasonal cooling, harvest-time temperature of grain going into storage is an important factor determining economic viability of an IPM approach. A publication in review as this project was ending shows that under standard environmental conditions and other standardized assumptions, sampling-based fumigation is not economical. However, it may be more economical than conventional calendar-based fumigation if insect immigration rates into at least some bins can be reduced to a low level and grain is stored fewer days, or if sampling cost can be reduced relative to fumigation cost. A second area of work conducted under this project focused on costs and benefits of implementing IPM in agribusiness processing firms, building on the work conducted for grain storage firms. A key part of the work is constructing a framework for selecting appropriate insect-control methods for each stage of the production process. This work is in progress. PARTICIPANTS: Participants: Interdisciplincary Team at Oklahoma State University; USDA-ARS in Manhattan, Kansas and Kansas State University personnel in Grain Science, Entomology, Agricultural Engineering and Agricultural Economics. TARGET AUDIENCES: Consumers desiring reduced pesticide use in the food chain. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Although consumers and food processors express desires for reduced pesticide use in the food chain, agribusiness managers will not adopt Integrated Pest Management (IPM) practices voluntarily unless their cost and effectiveness compare favorably with conventional chemical-based practices. Economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices was conducted to determine if IPM is cost-effective for stored grain and grain processing functions, as well as to identify ways for more economical implementation of IPM techniques.

Publications

  • No publications reported this period


Progress 10/01/06 to 09/30/07

Outputs
Work under the previous period with an interdisciplinary, multi-institutional team of scientists had assessed costs of failing to control insects in IPM and chemical-based strategies using a simulation approach. Results showed that insufficient control of insects is a significant cost, especially if insect problems are undetected. Also, sampling adds unnecessary cost in some situations where it does not change the treatment. These results are important because they help explain why some elevator managers are reluctant to adopt IPM techniques, particularly in concrete grain bins that do not have aeration capability. Work in this period expanded upon that simulation to reflect more realistic insect growth and immigration parameters, weather conditions, and effects of treatment methods. Results indicate that if insect immigration can be reduced by a factor of 10 (through sealing of openings in grain bins and cleanliness, for example), or if a particular year or location has lower temperatures and/or humidity, an IPM approach likely would be economical. Initial work also suggests that because of its correlation with time required for seasonal cooling, harvest-time temperature of grain going into storage are important factors determining economic viability of an IPM approach; A second area of work is focusing on costs and benefits of implementing IPM in agribusiness processing firms, expanding on previous work for grain storage firms. A key part of the work is constructing a framework for selecting appropriate insect-control methods for each stage of the production process.

Impacts
Although consumers and food processors express desires for reduced pesticide use in the food chain, agribusiness managers will not adopt Integrated Pest Management (IPM) practices voluntarily unless their cost and effectiveness compare favorably with conventional chemical-based practices. An economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices is needed to determine if IPM is cost-effective for stored grain and grain processing functions, as well as to identify potential cost-savings for implementing IPM.

Publications

  • Adam, Brian D., Mounir Siaplay, Wade Brorsen, and Paul Flinn. "Should Grain Elevator Managers Adopt Integrated Pest Management?" Selected Paper presented at the American Agricultural Economics Association Annual Meeting, Portland, OR, July 29-August 1, 2007. Paper available at http://agecon.lib.umn.edu/cgi-bin/detailview.pl?paperid=26329.


Progress 10/01/05 to 09/30/06

Outputs
Work under the previous period with an interdisciplinary, multi-institutional team of scientists had assessed costs of failing to control insects in IPM and chemical-based strategies using a simulation approach. Results showed that insufficient control of insects is a significant cost, especially if insect problems are undetected. Also, sampling adds unnecessary cost in some situations where it does not change the treatment. These results are important because they help explain why some elevator managers are reluctant to adopt IPM techniques. Work in this period expanded upon that simulation to reflect more realistic insect growth and immigration parameters, weather conditions, and effects of treatment methods. A second area of work is focusing on costs and benefits of implementing IPM in agribusiness processing firms, expanding on previous work for grain storage firms. A key part of the work is constructing a framework for selecting appropriate insect-control methods for each stage of the production process.

Impacts
Although consumers and food processors express desires for reduced pesticide use in the food chain, agribusiness managers will not adopt Integrated Pest Management (IPM) practices voluntarily unless their cost and effectiveness compare favorably with conventional chemical-based practices. An economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices is needed to determine if IPM is cost-effective for stored grain and grain processing functions, as well as to identify potential cost-savings for implementing IPM.

Publications

  • Adam, B. D., T. W. Phillips, and P.W. Flinn. "The Economics of IPM in Stored Grain: Why Dont More Grain Handlers Use IPM?" Proceedings of the 9th International Working Conference on Stored Product Protection. Edited by I. Lorini et al.. Campinas, Sao Paulo, BRAZIL: ABRAPOS, 2006:3-12.


Progress 10/01/04 to 09/30/05

Outputs
Work under the previous period with an interdisciplinary, multi-institutional team of scientists had assessed costs of failing to control insects in IPM and chemical-based strategies using a simulation approach. Results showed that insufficient control of insects is a significant cost, especially if insect problems are undetected. Also, sampling adds unnecessary cost in some situations where it does not change the treatment. These results are important because they help explain why some elevator managers are reluctant to adopt IPM techniques. Work in progress is refining that simulation to reflect more realistic insect growth and immigration parameters, weather conditions, and effects of treatment methods. A second area of work is focusing on costs and benefits of implementing IPM in agribusiness processing firms, expanding on previous work for grain storage firms. A key part of the work is constructing a framework for selecting appropriate insect-control methods for each stage of the production process.

Impacts
Although consumers and food processors express desires for reduced pesticide use in the food chain, agribusiness managers will not adopt Integrated Pest Management (IPM) practices voluntarily unless their cost and effectiveness compare favorably with conventional chemical-based practices. An economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices is needed to determine if IPM is cost-effective for stored grain and grain processing functions.

Publications

  • Danley, Ronda, Brian D. Adam, Jim Criswell, Ron Noyes, and Thomas W. Phillips. "Accuracy Evaluation of Phosphine Monitoring Devices." Journal of Pesticide Safety Education 2005, 7):1-9. Accessible at http://scholar.lib.vt.edu/ejournals/JPSE/v7/JPSEV7_1-9.pdf .


Progress 10/01/03 to 09/30/04

Outputs
An interdisciplinary team of scientists from Oklahoma State University, USDA-ARS in Manhattan, Kansas, and Kansas State University (including researchers and extension personnel in Grain Science, Entomology, Agricultural Engineering, and Agricultural Economics) had previously conducted a firm-level cost analysis of more than 13 separate insect-control strategies. The results indicated that some IPM strategies are less expensive than commonly-used chemical-based strategies and some are more expensive. Work under this reporting period assessed costs of failing to control insects in IPM and chemical-based strategies, so that total costs of insect control strategies can be compared. Results show that insufficient control of insects is a significant cost, especially if insect problems are undetected. Also, sampling adds unnecessary cost in some situations where it does not change the treatment. These results are important because they help explain why some elevator managers are reluctant to adopt IPM techniques. IPM may become more attractive if the cost of sampling can be reduced, or its effectiveness increased. Work in progress is evaluating the effects of several variables, including weather, insect immigration rates, and fumigation effectiveness, on these costs and on optimal choice of treatments.

Impacts
Although consumers and food processors express desires for reduced pesticide use in the food chain, agribusiness managers will not adopt Integrated Pest Management (IPM) practices voluntarily unless their cost and effectiveness compare favorably with conventional chemical-based practices. An economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices is needed to determine if IPM is cost-effective for stored grain.

Publications

  • Danley, Ronda, Brian D. Adam, Jim Criswell, Ron Noyes, and Thomas W. Phillips. "Accuracy Evaluation of Phosphine Monitoring Devices." Journal of Pesticide Safety Education, 2004 (forthcoming)


Progress 10/01/02 to 09/30/03

Outputs
INTEGRATED PEST MANAGEMENT Work in progress is comparing costs and benefits of pest management strategies for stored grain that emphasize reduced use of pesticides with traditional strategies based on pesticides, especially fumigation. A significant component of this research involves an assessment of the risk that sampling will fail to detect a level of insect infestation that should be treated and the risk that a particular strategy will be ineffective in controlling insects.

Impacts
The reduced arsenal of insect pest-control tools combined with demands for wholesome and pest-free food poses a challenge for managers of food-processing firms and stored-grain facilities. An economic analysis comparing costs, benefits, and risks of IPM vs. conventional pest management practices is needed to determine if IPM is cost-effective for stored grain.

Publications

  • Lukens, Tamara L. Cost and Effectiveness of Integrated Pest Management Strategies Compared to Chemical Methods in Stored Wheat. M.S. Thesis, 2002.
  • Danley, Ronda. An Economic Evaluation of Phosphine Fumigant Monitoring Devices in Commercial Grain Elevators. M.S. Thesis, 2002.