Question

Suppose you are using cost-benefit analysis to evaluate a policy aimed at limiting the use of a pesticide applied to grain crops. Give examples of the following that would have to be estimated to conduct this analysis properly.  You do not have to estimate any dollar values, just description:

1. What are the risks?
2. What are the associated costs?
3. What are the associated benefits?

Answer 1

Cost and Benefit analysis aiming at the policy for limiting the use of pesticides applied to a grain crop-

1. Risk- the main risk is that crop can be damaged by insects and other worms. Instead of using it if farmer go for organic farming it will be costlier so the demand can also be hampered.

2. associated cost - Cost will be of some other method if used instead of pesticide. If crop got destroyed the value will be the overall loss so further it will add on future cost. For the policy implication , additional cost have to be born by the authority like cost for making farmer aware .There will be less sale of pesticides so they have to bear the loss

3. Associated benefits - Consumers will get good quality produce that is done by organic farming which have so many positive impacts on health and also on the environment.