The determinants of input use in agriculture: a dynamic analysis of the wine-growing sector in France

While the use of chemical inputs in agriculture is increasingly under debate, this article examines the determinants of their consumption by French wine-growers at an individual level. We introduce criteria relating to the structure of vineyards and to their financial situation. Using data from the Farm Accountancy Data Network (FADN-RICA) for the period 2002-2007 relating to an annual sample of 607 wine-growers, we study the different factors which encourage wine- growers to use inputs to protect or increase the yield of their vines. By means of transversal and longitudinal analyses, we illustrate the benefit derived from differentiating the demand for inputs according to their nature: pesticides or fertilisers. Climatic variables, physical size and turnover all act as a driving force in deciding to use inputs. Taking out crop insurance acts as a substitute for inputs and we also observe an adverse selection effect – the wine-growers who reduce their consumption of inputs the most increase their insurance and receive greater compensation – and moral hazard effect – the wine-growers who increase their consumption of inputs the most increase their claims the most. As wine-growing is a permanent activity conducted over a long period of time, we observe a permanence in the patterns of use of inputs.