IMPACTS OF TAXES TO REDUCE AGRICHEMICAL USE WHEN FARM POLICY IS ENDOGENOUS

The economic impacts of policies to reduce water pollution from agriculture have been explored in a number of studies. A standard assumption in this literature is that farm income support policies are given. However, the modern public choice view of agricultural policy suggests that significant environmental initiatives in agriculture would likely be accompanied by changes in farm income policies to protect those with a significant stake in agriculture. We explore the potential effects of such compensating adjustments on the costs and effectiveness of taxes on polluting chemical inputs in US corn production. We find that compensating farm policy adjustments can greatly increase the costs and reduce the effectiveness of the environmental protection measure. The results also indicate the potentially high costs of poor policy co-ordination.     

Choice experiment adaptive design benefits: a case study*

Efficient experimental designs offer the potential to reduce required sample sizes, or to reduce confidence intervals for parameters of interest, in choice experiments. Choice experiment designs have typically addressed efficiency of utility function parameter estimates. The recently developed concept of C‐efficiency recognises the salience of willingness to pay estimates rather than utility function parameters in studies that seek to put money values on attributes. C‐efficiency design benefits have been illustrated in a theoretical context, but have not been tested in applied settings. This study reports a choice experiment field application that used initial responses to update statistical designs to maximise C‐efficiency. Consistent with theoretical predictions, the revised design delivered significant reductions in the variance of willingness to pay estimates, illustrating that C‐efficient designs can indeed decrease costs of choice experiments by reducing required sample sizes.     

Nonmarket valuation in developing countries: incorporating labour contributions in environmental benefits estimates

There are limitations associated with the application of nonmarket valuation techniques, including choice experiments, in subsistence economies. In part, this is due to the concern that using money as a mode of contribution may not capture the potential contribution of low‐income households. To address this limitation, respondents in this study were provided with the option of contributing towards the management of invasive plants in labour terms if they were unwilling to contribute in monetary terms. The results show that the existing practice of using dollar values to estimate willingness to contribute may disproportionately exclude the concerns of some groups within the community. The analysis also indicates that allowing respondents to express their willingness to contribute in labour increases their participation in environmental decision‐making processes and hence increases the estimated value of forest ecosystem services. This study contributes to the limited empirical literature on the development of nonmarket valuation surveys, particularly choice experiments, in low‐income countries in general and rural areas in particular.     

The Effect of Energy Price Increases on the U.S. Livestock Sector

This study is unique and crucial to the current time period because of the recent high energy price escalation. The uniqueness of this study pertains to the void in energy impact research of the agricultural sector, more specifically to livestock. The U.S. Department of Energy has models estimating economy-wide impacts, but not the specific impacts on agriculture. The Iowa State study concentrated on the grain sector.
The results presented here indicate that energy price increases will have substantial effects on livestock prices and production. Energy price increases will also result in differential impacts on livestock commodities (with poultry and eggs having the largest price and production effects). Furthermore, the multi-period framework enables the livestock model to capture lagged production responses. Noticeable is the higher impacts occurring in the third and fourth years.
In the future, higher energy costs may induce changes in U.S. production, processing and distribution patterns of livestock commodities. The highly vertically integrated poultry and egg industries may begin shifting production locations away from the colder northern regions to areas with more temperate climates. For industries like beef, pork and dairy, there may be increased range production to reduce impacts from higher feed costs. For all industries, closer proximity of processing plants to major livestock producing areas may occur.     

Using Geographically Weighted Choice Models to Account for the Spatial Heterogeneity of Preferences

In this paper, we investigate the use of geographically weighted choice models for modelling spatially clustered preferences. We argue that this is a useful way of generating highly‐detailed spatial maps of willingness to pay for environmental conservation, given the costs of collecting data. The data used in this study come from a discrete choice experiment survey of public preferences for the implementation of a new national forest management and protection programme in Poland. We combine these with high‐resolution spatial data related to local forest characteristics. Using locally estimated discrete choice models we obtain location‐specific estimates of willingness to pay (WTP). Variation in these estimates is explained by characteristics of the forests close to where respondents live. These results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate location‐specific estimates of WTP. We find that there are indeed strong spatial patterns to the benefits of changes to the management to national forests. People living in areas with more species‐rich forests and those living nearer bigger areas of mixed forests have significantly different WTP values than those living in other locations. This kind of information potentially enables a better distributional analysis of the gains and losses from changes to natural resource management, and better targeting of investments in forest quality.     

Calculating environmental cost indicators of apple farm practices indicates large differences between growers

This study evaluates the environmental impact of current apple cultivation practices in Flanders, Belgium. It evaluates integrated production, the most common practice, and it compares this production method with conventional and organic production. The assessment was based on Farm Accountancy Data Network data from 2010 to 2012 for 64 farms in the region and a life cycle approach was used. The findings showed no significant improvement in environmental impacts for integrated farms compared to conventional farms and, even more, the former showed significantly higher average impacts per hectare for the categories ‘acidification’, and ‘non-renewable energy use’ in comparison with the latter. The organic production group showed higher average impacts per kilogram due to lower yields. Secondly, impacts related to the categories ‘acidification’, ‘eutrophication’ and ‘global warming potential’ were monetized based on the shadow price method in order to obtain external costs. Results show that external costs increase the production costs for integrated farming at least with 5%, both when these costs are expressed per kilogram and per hectare. However, the findings show a large variability in impacts and costs per farm. Farm-specific practices have therefore an important influence on the total environmental cost rather than production group-specific practices.     

Public Preferences and Willingness to Pay for Forest Disease Control in the UK

Invasive pests and diseases in trees impose a range of costs on society related to reductions in timber values, impacts on recreational opportunities and effects on forest biodiversity. These costs need to be considered when assessing control options and developing public policy. We investigate the preferences and willingness to pay of the UK general public for a range of forest disease control measures using a choice experiment with a sample of 605 people. Respondents were relatively well informed about general tree disease‐related issues, such as causes and general measures to minimise the risk of disease spread. They were less knowledgeable about specific tree diseases, with Dutch elm disease and chalara ash dieback being the most well known. We find that disease control programmes in publicly‐owned forests and forests owned by charitable trusts are more likely to be supported by the public than equivalent control programmes in privately‐owned and/or commercial forests. The nature of scientific uncertainty about diseases does not affect peoples’ preferences for disease control measures significantly. Higher respondent income, greater ex‐ante knowledge about tree diseases, and more frequent visits to forests are correlated with greater willingness to support publicly‐funded tree disease control programmes in forests. Better knowledge about tree diseases also improves the clarity of respondents’ choices. We find a negative sentiment against some disease control measures, such as clear felling of a forest, and chemical or biocide spraying. We conclude that there is significant public support for part‐financing forest disease control policies in the UK, but that this is conditional on forest ownership and the type of control measures used.     

Land acquisition for and local livelihood implications of biofuel development in Zimbabwe

Proponents of “green and clean” fuel argue that land acquisitions for biofuel development could result in significant economic benefits, such as job creation, local development, fuel and energy security, and minimal negative impacts on the environment. With a dominant focus on these purported benefits, comparatively little attention has been given to the processes and impacts of land acquisitions on the local people whose livelihoods depend on land-based activities. Using a case study of bio-ethanol development in Chisumbanje, Zimbabwe, this paper assesses the processes and local livelihood implications of land acquisitions for biofuel development and considers who is likely to bear the costs. Our findings show that local communities felt they were not consulted in the land acquisition process and despite the promises of local livelihood enhancement from biofuel development, displaced households (farmers) perceived that the costs incurred from biofuel development were more than the benefits received.     

Characterisation of extensive beef cattle systems: Disparities between opinions,practice and policy

Increasing pressure on extensive farming systems in marginal areas requires them to become more resilient and adaptable to extreme conditions brought about by climate change. Yet these rangeland areas must also be protected as refuges for biodiversity and as important carbon stores. Recent United Kingdom policy initiatives are encouraging the use of traditional or native breeds of livestock to preserve genetic diversity, due to their perceived adaption to harsh environments and their value for managing extensive habitats for conservation. It is not clear however, whether these benefits are based on scientific evidence or perhaps more on current opinion; nor whether farm system practices are likely to change in response to these initiatives. This study offers an approach that can support future empirical studies designed to better inform such policy decisions.A survey was carried out to provide insight into current opinions regarding the impacts of cattle on hill environments and the cattle breeds appropriate for hill environments, before more detailed farm interviews provided data for a characterisation of suckler beef farming systems in Scotland using a typological approach. Survey results indicated that the majority of respondents believed cattle have a positive effect on hill environments when carefully managed, yet there was wide diversity in opinion regarding the type of impacts and most suitable breeds. Interview results highlighted the diversity of management systems, decision making processes and cattle types present and indicated significant variation in farmers’ views regarding breed hardiness, suitability and reasons for their choice of breed. Three system groups: Traditionalists, Improvers and Production optimisers, were clearly defined by the typology, with significant variation observed in their management practices and views. This study suggests that hill beef farmers appear to not only adapt their production systems according to their current bio-physical and financial circumstances, but also from personal experience. Accumulation of this kind of evidence is long overdue and could provide support to the development of any future policies regarding cattle and hill environments.     

Biosecurity in agriculture: an economic analysis of coexistence of professional and hobby production*

One component of biosecurity is protection against invasive alien species, which are one of the most important threats worldwide to native biodiversity and economic profitability in various sectors, including agriculture. However, agricultural producers are not homogeneous. They may have different objectives and priorities, use different technologies, and occupy heterogeneous parcels of land. If the producers differ in terms of their attitude towards invasive pests and the damages they cause, there are probably external effects in the form of pest spread impacts and subsequent damages caused. We study such impacts in the case of two producer types: profit‐seeking professional producers and utility‐seeking hobby producers. We show that the hobby producer, having first set a breeding ground for the pest, under‐invests in pest control. We also discuss potential policy instruments to correct this market failure and highlight the importance of considering different stakeholders and their heterogeneous incentives when designing policies to control invasive alien species.     

Do native and invasive labels affect consumer willingness to pay for plants? Evidence from experimental auctions

Ornamental plant sales have been identified as an important vector for the introduction of invasive plants. Increased concerns about the economic and ecological costs of invasive plants have spawned interest in identifying strategies to curtail introductions. One possible strategy is labeling plants based on whether they are invasive or native. The primary purpose of this paper was to explore how labeling plants based on invasive and native attributes might affect consumer demand. To accomplish this objective, a second price auction was used to elicit the willingness to pay (WTP) for plants with and without labels. On average, we found a $0.35 premium for plants labeled as noninvasive and native and a $1.01 to $1.66 discount for plants labeled as invasive. The size of these premiums and discounts differed in relation to various demographic, attitudinal, and preference‐related factors. Overall, our results suggest that labeling plants as invasive or native could be a viable strategy for reducing the introduction of invasive plants.     

Estimating the social welfare effects of New Zealand apple imports

International trade of agricultural products not only generates wealth but is also responsible for the introduction of invasive pests beyond their natural range. Comprehensive bioeconomic modelling frameworks are increasingly needed to assist in the resolution of import access disputes. However, frameworks that combine welfare analysis attributable to trade and invasive species spread management are lacking. This study provides a demonstration of how a comprehensive economic framework, which takes into account both the gains from trade and the costs of invasive species outbreaks, can inform decision‐makers when making quarantine decisions. We develop a partial equilibrium trade model considering international trade and combine it with a stratified dispersal model for the spread and management of potential outbreaks of an invasive species. An empirical estimation is made of the economic welfare consequences for Australia of allowing quarantine‐restricted trade in New Zealand apples to take place. The results suggest the returns to Australian society from importing New Zealand apples are likely to be negative. The price differential between the landed product with SPS measures in place and the autarkic price is insufficient to outweigh the increase in expected damage resulting from increased fire blight risk. As a consequence, this empirical analysis does not support the opening up of this trade.     

Duck Hunting and Wetland Conservation: Compromise or Synergy?

Duck hunting is an issue — often controversial — that generates both benefits and costs to society. Hunters enjoy benefits from engaging in their sport, while those who have ethical concerns regarding the shooting of ducks endure costs. Some in the community fear that duck hunting puts pressure on the continued ecological viability of the hunted species, while others argue that the demand for hunting provides sufficient economic incentive for wetland conservation. Whether society as a whole should permit or restrict duck hunting is to some extent an empirical question: Are the costs to society of allowing duck hunting greater or less than the benefits it generates? Evidence presented in this paper addresses this question. The benefits enjoyed by people who hunt ducks in the upper south east of South Australia are estimated using the travel cost method. The ethical costs borne by the general community because of duck hunting are estimated using the choice modeling technique. Finally a threshold value analysis is used to assess the activities of Wetlands and Wildlife, a not‐for‐profit organization that manages wetlands in part for hunting.     

Evaluating the economic impact of quality-reducing,seed-borne diseases: Lessons from Karnal bunt of wheat

Estimates of aggregate disease costs can be used for assigning research resources or to evaluate control measures. Most diseases cause production losses, but others affect quality and marketability. Seed-borne diseases also cause problems for the seed production and distribution industry. The aim in this paper is to examine issues relating to the economic impact of a quality-reducing, seed-borne disease, and to highlight differences compared to non-seed-borne diseases affecting yield only. Economic evaluation of quality-reducing, seed-borne diseases needs to incorporate impacts of trading restrictions such as quarantines or embargoes imposed by purchasers. The costs of measures taken to control diseases also represent part of the economic impact of the disease. Full economic costs of a disease include the direct (yield and quality) costs and costs of the control measures. The costs of Karnal bunt of wheat in Mexico were found to include many control costs that have often been overlooked. The optimal amount of resources to invest in controlling a disease depends on the likely annual costs of the disease and of control measures. Before implementing disease control policies, both the costs and the benefits of the policies need to be considered, taking the risks of each option into account, to ensure that the policy itself does not impose greater costs than the uncontrolled disease.     

Evaluating alternative “countermeasures” against food contamination resulting from nuclear accidents

Nuclear accidents such as Chernobyl have far reaching impacts on ecological systems. Likewise they have major implications for agricultural systems, since crops and livestock can become contaminated and rendered unfit for human consumption. A range of “countermeasures” exists, however, which can mitigate these impacts and allow food products to be saved. The CESER project has been concerned with the development of a system to assess the environmental side‐effects of such countermeasures. Estimates of the economic costs of these environmental side‐effects have been made for a number of case study sites in the UK, using environmental models and an original contingent valuation study. Estimates of farm level (private) costs are also included.     

Estimating the costs and benefits of soil conservation in Europe

Economics is about problems of choice. In erosion control, both public authorities and private land users are faced with such problems. What is the impact of erosion, both on-site and off-site, and to what extent can this impact be quantified? If we conceptualize this impact in terms of sustainability, how can we compare one type of effect against another? The former question can be answered only by natural scientists, the latter by economists and other social scientists. Weighing different aspects of sustainability requires value judgments, and economists are sometimes accused of having a jaundiced view of reality, wrongly supposing that decisions are based on rationality and denying the importance of emotion.However, let us assume that there is some mileage to be gained out of attempting to estimate the cost of erosion in an economic sense—which consists of converting the various effects into a common denominator: euros. If we can predict the impact of erosion control measures on erosion rates, we can know the benefit of these measures. The cost also needs to be calculated, not in terms of money but in terms of resources expended (which could have been used for other purposes) and in terms of possible negative impacts of erosion control (for instance, increased use of herbicides in reduced-tillage systems).There are important other considerations which economists may study. Firstly, there is the comparison of present versus future costs and benefits: how much can we sacrifice today for higher sustainability tomorrow?Secondly, there is the issue of private versus public costs and benefits: how do the goals of private land users differ from (those of?) the public good, how can this help us to predict land users’ behaviour, and what incentives would be appropriate to make them behave in such a way as to maximize the public good? Thirdly, how do we deal with uncertainty and risk?These problems loomed large in a study to support an extended impact assessment for the EU Soil Thematic Strategy, in 2005. Whereas much research has been done on erosion and its impact, much of this is on a small scale. The extent of the problem on a national, let alone a continental or a global scale, is still poorly known. The paper discusses how these problems were faced, which is not the same as saying they were resolved.     

Coastal areas and climate change: A decision support tool for implementing adaptation measures

Climate change will be one of the main global challenges in the future. In this context cities play a key role. If, on the one hand, cities cause climate change, on the other hand, they are the places where climate change impacts are most evident, as it deeply affects the quality of life of its inhabitants. Climate change impacts are particularly relevant for coastal areas. These are characterized by a higher concentration of buildings and people in comparison to inland areas. In particular, one of the forecasted effects of climate change in these areas is the increase in coastal flooding due to rising sea levels and storm surges. The implementation of strategies and actions for the adaptation of urban areas to the impacts of coastal flooding is essential to ensure the liveability of coastal communities. Urban planning plays a key role in cities’ adaptation. However, even though the interest in this topic has been increasing, operative support and tools for planning urban adaptation in cities are in short supply, especially in coastal cities. In light of this, it has become necessary to focus on the definition of new tools responding to the needs of urban planning.Based on these observations, this paper, starting from the existing literature on coastal vulnerability indices, has developed a new index: the Coastal Resilience Index (CoRI). Thanks to the CoRI and to the use of technological innovations applied to urban planning (in particular, Geographic Information Systems), a decision support tool has been developed to identify adaptation measures aiming to reduce the impacts of coastal flooding, caused by rising sea levels and storm surges.     

Parking Behavior: Park ‘n’ Ride (PnR) to encourage multimodalism in Brisbane

‘Park ‘n’ Ride’ facilities (PnR) initially emerged to accommodate motorists that would otherwise exhaust the local supply of parking around train stations and other rapid high occupancy vehicle nodes but increasing became a planning strategy to provide commuters from auto-dependent suburbs with access to rapid high occupancy vehicle to reduce their environmental impacts and inner-city road and parking capacity requirements. Theoretically, PnR should influence modal choice by making the transfer between car and rapid transit more convenient yet this base assumption rarely matches the empirical reality. Our synthesis of the PnR literature suggests that motorists deciding whether to park-and-ride have considerations beyond minimising their travel duration and expenses, and we develop a new integrative model of PnR, multi-modalism, and modal choice to illustrate how reliability and competing transport planning strategies such as inter-city mobility, transit-oriented development, and active transport interact and inform modal choice. Upon laying these theoretical foundations, we empirically examine the extent to which developing or modifying PnR influences modal choice in our case study context, Brisbane, Australia. Our research findings suggest that it is new rather than modified PnR that influence modal choice and that new park and riders are typically drawn from nearby locations rather than peripheral and therefore auto-dependent areas. This influence is particularly evident in suburbs closer to the inner city, and is problematic given that these are not the intended users of PnR. Our synthesis and examination of multi-modalism and modal choice has important implications for researchers, planners, and policy makers attempting to influence modal choice and improve the efficiency of urban mobility.     

Farm-scale ecological and economic impacts of agricultural change in the uplands

Recent decades have witnessed substantial losses of biodiversity in Europe, partly driven by the ecological changes associated with intensification of agricultural production. These changes have particularly affected avian (bird) diversity in marginal areas such as the uplands of the UK. Future trends for upland birds will likely be impacted by changes in agricultural support regimes, such as those currently envisaged in on-going reforms of the Common Agricultural Policy. We developed integrated ecological-economic models, using seven different indicators of biodiversity based on avian species richness and individual bird densities. The models represent six different types of farms which are typical for the UK uplands, and were used to assess the outcomes of different agricultural futures. Our results show that the impacts of these future agricultural scenarios on farm incomes, land use and biodiversity are very diverse across policy scenarios and farm types. Moreover, each policy scenario produces un-equal distributions of farm income changes and gains and losses in alternative biodiversity indicators. This shows that generalisations of the effects of policy and pricing changes on farm incomes, land uses and biodiversity can be misleading. Our results also suggest that a focus on umbrella species or biodiversity indicators (such as total species richness) can miss important compositional effects.     

EU Reform of the Sugar Beet Regime: Implications for UK Agriculture

The purpose of this article is to discuss possible scenarios for UK sugar beet production after the reform of the sugar regime. The analysis is built on an evaluation undertaken by the University of Cambridge and The Royal Agricultural College of the impact that reforming the EU sugar regime may have on UK agriculture. The analysis focuses on the implications of reductions in quota and the support price and on the possible reactions by British Sugar, as the final outcome in terms of production will depend on the interaction between British Sugar and sugar beet farmers. The analysis indicates that British Sugar strategies such as reallocating the available quota to the more efficient producers or paying higher beet prices might mitigate the impacts of the reform. The key factor in limiting the overall impact on production is the extent that the industry can restructure and reduce its cost base. For example, following a 40 per cent reduction in the sugar beet price we estimate that if farmers could reduce their average costs by 20 per cent, about 52 per cent of UK beet production would still be viable, compared to less than 20 per cent if costs were not altered.