Why do farmers buy pesticides when the scientific evidence strongly suggests that some are not cost effective? In previous blogs. I suggest that sales success can stem from fear, the need for an insurance policy and, very importantly, the system of commission based selling in the pesticides market.
Recent research indicates that when the vested interest of the advisor is declared the result is that the payment by the pesticide company will be more, not less, effective at securing a sale.
The agrochemical industry makes commission based payments to agronomists who act as the middle men to convince farmers to buy neonicotinoids and other pesticides.
The relationship between a farmer and their agronomist is a very close one, built on trust and respect, the farmer depends on the advice of the agronomist to achieve an income. Commission based sales systems introduce an incentive for the agronomist to provide advice to the farmer that may not be in the best interest of the farmer, or in the best interest of the environment. It creates the conflict of interest circumstances required for a breach of trust.
You might think that if the payment and vested interest was transparent then the farmer would take this into account and be more questioning of the agronomist’s advice and more likely to take it with a pinch of salt. This is not the case, rather than this beautiful rational response, what happens is that the farmer falls into a trap called ‘insinuation anxiety’. This means that the farmer does not want to be seen to do anything that might call into question the integrity of their friend and ally the agronomist. So rather than asking more questions the farmer will ask fewer questions and be more likely to comply with the advice (Sah et al. 2011). Kerching!
Not only are the farmers more likely to accept the advice of an agronomist with a conflict of interest after this is declared, advisors are also more likely to give advice that is biased after they have made a declaration. It seems that having acted transparently they feel they have ticked the honest box and have a moral licence to get on with recommending the product that will make them richer, exaggerating its benefits if need be (Cain et al. 2003). Kerching! Kerching!!
The only positive news is that, when advisors 1) feel that they have an option not to accept a conflict of interest and 2) know there will be disclosure of that interest, then they are more likely to refuse the conflict of interest in the first place (Sah and Loewenstein 2014).
Clearly in the world of agrochemicals sales there is no requirement to declare interests and even if the first requirement was met, it is not clear to what extent the business models of the agronomists allow them to consider refusing the financial incentives from of the pesticide companies to maximise toxin sales.
There are robust reasons why commission based selling is banned for personal financial advisors and for medical doctors; agronomists fall into the same category – a strong, personal client-advisor trust relationship.
I return again to my former conclusion – the Government should ask the Competition and Markets Authority to undertake a review of the extent of commission based selling in the pesticide sector, the vulnerability of the market to distortion and restricted consumer choice, the prevalence of miss-selling and the effects on vulnerable farmers and the environment.
Cain, D M., Loewenstein, G & Moore, D A., (2003). The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest Available at SSRN: http://ssrn.com/abstract=480121 or http://dx.doi.org/10.2139/ssrn.480121
Sah, S. & Loewenstein, G. (2014). Nothing to Declare Mandatory and Voluntary Disclosure Leads Advisors to Avoid Conflicts of Interest. Psychol. Sci. 25, 575–584 http://pss.sagepub.com/content/25/2/575
Sah, S., Loewenstein, G. & Cain, D. M. (2011). Insinuation Anxiety: Fear of Signaling Distrust after Conflict of Interest Disclosures Available at SSRN: http://ssrn.com/abstract=1970961 or http://dx.doi.org/10.2139/ssrn.1970961