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Evaluating The Cost Effectiveness Of Land Retirement Programs

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  • Khanna, Madhu
  • Yang, Wanhong
  • Farnsworth, Richard L.
  • Onal, Hayri

Abstract

This paper extends an integrated framework that combines economic, environmental and GIS modeling to evaluate the cost effectiveness of land retirement programs. The modeling framework is applied to the Lower Sangamon Watershed in Cass County of Illinois to examine the economic costs and environmental benefits of three land retirement scenarios: land actually enrolled in the Illinois CREP, land selected by a land rental cap mechanism and land identified by a least cost model. We find that land retirement in the watershed successfully achieved the program goal of 20% sediment abatement. However, in achieving the same level of sediment abatement, the costs of actual land retirement are 1.3 times and 2.1 times of those in a land rental cap mechanism and a least cost model respectively. The model results also reveal that cost effective land retirement parcels are more sloping, close to river, with higher upland sediment inflow, more on-site erosion and lower quasi-rents. The results indicate that governments may improve the cost effectiveness of land retirement program through targeting. And there is a need to modify current Illinois CREP eligibility criteria to include sloping cropland adjacent to the river in the program. Furthermore our results suggest that in the program implementation land retirement contracts could be selected based on several measurable parameters such as distance from the river and slope.

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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19740.

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Date of creation: 2002
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Handle: RePEc:ags:aaea02:19740

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Keywords: Land Economics/Use;

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  1. David Zilberman, 1996. "The Economics of a Public Fund for Environmental Amenities: A Study of CRP Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 961-971.
  2. Marc O. Ribaudo, 1986. "Consideration of Offsite Impacts in Targeting Soil Conservation Programs," Land Economics, University of Wisconsin Press, vol. 62(4), pages 402-411.
  3. Anastasia Lintner & Alfons Weersink, 1999. "Endogenous Transport Coefficients: Implications for Improving Water Quality from Multi-Contaminants in an Agricultural Watershed," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(2), pages 269-296, September.
  4. Babcock, Bruce A. & Lakshminarayan, P. G. & Wu, J. & Zilberman, David, 1997. "Targeting Tools for the Purchase of Environmental Amenities," Staff General Research Papers 5220, Iowa State University, Department of Economics.
  5. Shakya, Bibhakar S. & Hitzhusen, Frederick J., 1997. "A Benefit-Cost Analysis of the Conservation Reserve Program in Ohio: Are Trees Part of a Sustainable Future in the Midwest?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 27(2).
  6. Babcock, Bruce A. & Lakshminarayan, P. G. & Wu, JunJie & Zilberman, David, 1996. "Economics of a Public Fund for Environmental Amenities (The)," Staff General Research Papers 1065, Iowa State University, Department of Economics.
  7. Marc O. Ribaudo, 1989. "Targeting the Conservation Reserve Program to Maximize Water Quality Benefits," Land Economics, University of Wisconsin Press, vol. 65(4), pages 320-332.
  8. Carpentier, Chantal Line & Bosch, Darrell J. & Batie, Sandra S., 1998. "Using Spatial Information To Reduce Costs Of Controlling Agricultural Nonpoint Source Pollution," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April.
  9. Feather, Peter & Hellerstein, Daniel & Hansen, LeRoy T., 1999. "Economic Valuation of Environmental Benefits and the Targeting of Conservation Programs: The Case of the CRP," Agricultural Economics Reports 34027, United States Department of Agriculture, Economic Research Service.
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