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From Farmer Management Decisions to Watershed Environmental Quality: A Spatial Economic Model of Land Management Choices

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  • Zhang, Wendong
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    Abstract

    Non-point source sediment and nutrient runoff from upstream agricultural production is known to impair downstream ecosystem functions and services. Despite adoption of agricultural best management practices (BMPs) by some farmers, there are still many cropland parcels with a high need for additional conservation treatment to reduce soil erosions and runoffs. Despite the well documented environmental benefits of BMPs, significant uncertainty still remains regarding the effectiveness of policies that promote these practices. The realization of environmental benefits through improved BMPs is most constrained by our limited understanding of how farmers respond to policies and the differences in responses across different types of farmers. Previous studies of agricultural management decisions are either not spatial or omiting farmer characteristics. We will improve on these approaches by combining a model of farmer behavior with a spatial model of land management across all parcels in the watershed. In this research we develop a spatially explicit behavioral model of farmers’ BMP choices that accounts for both farmers’ socioeconomic characteristics and spatial variations of land parcels. We apply this model to the Maumee River Watershed and to three BMPs – crop rotations, conservation tillage and Conservation Reserve Program enrollment. With this model, we can simulate BMP outcomes for each parcel across the entire watershed under baseline and alternative policy scenarios. The spatial behavioral model is expected to outperform a historical trend model and allows us to evaluate a broader range of potential policies in terms of their simulated impacts on farmer behavior, BMP decisions, and downstream ecosystem conditions.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 150729.

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    Date of creation: 2013
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    Handle: RePEc:ags:aaea13:150729

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    Keywords: Environmental Economics and Policy; Farm Management; Land Economics/Use;

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    1. JunJie Wu & Richard M. Adams & Catherine L. Kling & Katsuya Tanaka, 2004. "From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 26-41.
    2. Christopher Timmins & Wolfram Schlenker, 2009. "Reduced-Form Versus Structural Modeling in Environmental and Resource Economics," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 351-380, 09.
    3. Stavins, Robert N & Jaffe, Adam B, 1990. "Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands," American Economic Review, American Economic Association, vol. 80(3), pages 337-52, June.
    4. David J. Lewis & Andrew J. Plantinga & JunJie Wu, 2009. "Targeting Incentives to Reduce Habitat Fragmentation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1080-1096.
    5. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, 06.
    6. Newburn, David A. & Berck, Peter & Merenlender, Adina, 2004. "Spatial Targeting Strategies For Land Conservation," 2004 Annual meeting, August 1-4, Denver, CO 20206, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. MacEwan, Duncan & Howitt, Richard E., 2011. "Estimating Crop Rotations as Dynamic Cycles using Field Data," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103635, Agricultural and Applied Economics Association.
    8. Wu, JunJie & Boggess, William G., 1999. "The Optimal Allocation of Conservation Funds," Journal of Environmental Economics and Management, Elsevier, vol. 38(3), pages 302-321, November.
    9. Allen M. Featherstone & Barry K. Goodwin, 1993. "Factors Influencing a Farmer's Decision to Invest in Long-Term Conservation Improvements," Land Economics, University of Wisconsin Press, vol. 69(1), pages 67-81.
    10. Elena G. Irwin, 2010. "New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 65-91.
    11. Hendricks, Nathan P. & Sumner, Daniel A., 2011. "Spatially Explicit Estimates of Crop Rotation Responses," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103876, Agricultural and Applied Economics Association.
    12. Brian W. Gould & William E. Saupe & Richard M. Klemme, 1989. "Conservation Tillage: The Role of Farm and Operator Characteristics and the Perception of Soil Erosion," Land Economics, University of Wisconsin Press, vol. 65(2), pages 167-185.
    13. Norris, Patricia E. & Batie, Sandra S., 1987. "Virginia Farmers' Soil Conservation Decisions: An Application Of Tobit Analysis," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(01), July.
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