Offering payments for omitting fungicides in winter wheat production: under which conditions is it economically interesting from the perspective of a farm? A case study from Luxembourg.

[en] BACKGROUND: Integrated pest management (IPM) aims to control crop pests while balancing environmental sustainability and farm profitability. Under IPM, pesticides are applied only when pest or disease pressure surpasses economic thresholds, even after the implementation of non-chemical control strategies, thus implying that reducing pesticide use below IPM standards entails economic losses. In response, some European Union member states have introduced compensation schemes for farms adopting pesticide reduction strategies, such as zero-fungicide approaches. However, it remains critical to determine under which conditions these financial incentives sufficiently offset economic losses and support fungicide reduction.
RESULTS: Using commodity prices and fungicide application costs observed between 2018 and 2023, IPM-based fungicide use across 25 winter wheat trials generated an average net return of €67 ha-1 if disease monitoring was provided free of charge and €41 ha-1 if the farms had to bear the costs of disease monitoring themselves. The economic viability of compensation schemes depended on several key market factors: higher commodity prices, increased fungicide efficacy and low fungicide application costs enhanced the profitability of fungicide use, while low commodity prices and fungicide efficacy and high fungicide application costs made compensation schemes more attractive.
CONCLUSION: The success of financial incentives for fungicide reduction is challenged by high commodity prices, highly effective fungicides and low-cost application services. Given the strong influence of commodity prices on fungicide profitability, reductions are most likely to occur in lower-value market segments (e.g. grain for animal feed production), where compensation schemes gain economic leverage more easily.