An Economic Analysis of Producers' Decisions Regarding Insect Control in Stored Grain

The quantity of grain in storage has been exceptionally high through much of the early 1980s. As a result, the effect of insect activity on quality of grain that is stored for long periods of time has become a major concern. The purpose of this study was to analyze producer choices regarding treatments for control of insects in stored grain. A second degree stochastic dominance criterion was used to compare three treatments. In more than 80% of the comparisons, a protectant (malathion) was in the efficient set, which means that it could be selected by a risk-averse individual. In over 65% of the comparisons, a minimum treatment was in the efficient set. Treatment by fumigating was selected to remain in the efficient set in only 34% of the comparisons. Data from this study (before the implementation of the May 1988 regulations of the Federal Grain Inspection Service regarding insect infestation and insect-damaged kernels) suggest that elevator discounts were not consistent nor large enough to encourage farmers to incur large costs for controlling insects.