Balancing health and sustainability: Optimizing investments in organic vs. conventional agriculture through pesticide reduction

This paper investigates the trade-offs between organic and conventional farming methods, focusing on their respective impacts on health, environmental sustainability, and economic outcomes. Our contributions are twofold. First, we develop a theoretical model based on an optimal control problem to examine the dynamic allocation of investments between organic and conventional agriculture. This model incorporates critical social factors, including the environmental and health costs associated with pesticide use in conventional farming, as well as the long-term social benefits of organic practices. Second, we estimate the key parameters of the model using French data on pesticide levels in groundwater. This enables us to compute and analyze the optimal policy proposed by the model and derive implications for reallocating investments towards organic farming. The optimal policy emphasizes the necessity of a tailored approach across both spatial and time dimensions. Along the spatial dimension, areas with high pesticide concentrations should be prioritized, calling for place-based rather than place-neutral policies. Along the temporal dimension, earlier intervention strategies are warranted when social costs related to pesticide exposure are high or when the weight assigned to the environmental conditions of future generations is low. Overall, the optimal policy results in a more balanced distribution of pesticides across the territory.