THE EFFECT OF QUALITY ASSURANCE POLICIES FOR PROCESSING TOMATOES ON THE DEMAND FOR PESTICIDES

In California, acceptance sampling is used to monitor the quality of processing tomatoes delivered by growers to processors. A proposal to change the current quality assurance policy was recently put forth to reduce the growers' incentive to use pesticides. In this article we examine the effect of alternative quality assurance policies on profit-maximizing growers' demand for pesticides. The results indicate that the demand for pesticides is sensitive to changes in the quality assurance policy and that the proposed policy would reduce the optimal level of pesticide use on processing tomatoes. Disregarding the impacts of quality assurance policy may be the reason that the demand for pesticides has been underestimated so often in the past.