SummaryPesticide use in agriculture is a highly controversial issue because of polarised viewpoints. The agricultural sector claims high benefits while opponents point at the potential and actual risks. Until now, in Germany there have been few attempts to systematically analyse the benefits and costs of pesticide use and those of pesticide reduction. The paper Präsents methodological and empirical evidence for the hypothesis that the benefits of pesticide use are overestimated, both from the point of view of the individual firm and the national economy.A review of recent micro-economic literature reveals the importance of treating pesticide input in a damage abatement framework. Productivity assessment must also account for effects on natural resources which calls for overcoming static optimisation approaches. The risk-reducing properties of pesticides play a less important role than previously assumed. Furthermore, changing consumer preferences are likely to induce farmers to incorporate health and environmental considerations in their utility function.On the aggregated level, assessment of welfare impacts is ham pered by limitations in data availability. The information constraints affect the choice of the modelling approach. There are good reasons to prefer dualistic models built on the observed behaviour of farmers. An open economy framework is being proposed as a reference Szenario. In a case study of the agricultural sector of West Germany, a regional product supply and factor demand model is applied which avoids some, albeit not all of the problems discussed. The benefit-cost ratio is 1.47 which implies that on average pesticide use is economical, although at the margin this may not hold true. External costs were estimated separately. At a minimum they amount to about 250 million DM per year. Since currently only extreme scenarios have been compared, improving the database is necessary to study the impacts of realistic pesticide use reduction scenarios.
