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Economic Analysis Approaches To Potato-Based Integrated Crop Systems: Issues And Method

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  • Labarta, Ricardo A.
  • Swinton, Scott M.
  • Black, J. Roy
  • Snapp, Siglinde
  • Leep, Richard

Abstract

In response to stagnating yields and mounting pest problems, Michigan potato growers are investigating ways to bring manure and cover crops back into potato production systems. The alternative systems bring benefits and costs for monetary net returns, the variability of net returns, and environmental impacts. This paper reviews the likely yield and biological system effects of alternative potato production systems that incorporate manure and cover crops. After briefly considering research designs for gathering experimental versus farm field data, it reviews four economic analysis methods for evaluating alternative systems. All methods are illustrated with examples. First, for evaluating comparative average profitability, it reviews a) enterprise budgets, b) partial budgets, and c) break-even analysis. Second, for integrating environmental impacts into profitability analysis by using monetary measures of environmental effects, it introduces "green" budgets. Third, for evaluating efficiency trade-offs between profitability and environmental impacts, it covers trade-off frontiers. Finally, for comparing the variability of returns across systems (including for risk-averse decision makers), it introduces analysis of variance and stochastic dominance. These methods provide a basic set of tools for the economic analysis of changes in potato-based crop systems that should be adequate for most static comparisons of annual crop management practices.

Suggested Citation

  • Labarta, Ricardo A. & Swinton, Scott M. & Black, J. Roy & Snapp, Siglinde & Leep, Richard, 2002. "Economic Analysis Approaches To Potato-Based Integrated Crop Systems: Issues And Method," Staff Paper Series 11677, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:11677
    DOI: 10.22004/ag.econ.11677
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    Cited by:

    1. Adusumilli, Naveen & Fromme, Daniel, 2016. "Evaluating Benefits and Costs of Cover Crops in Cotton Production System in Northwest Louisiana," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230024, Southern Agricultural Economics Association.
    2. Zhen Cai & Ranjith P. Udawatta & Clark J. Gantzer & Shibu Jose & Larry Godsey & Lauren Cartwright, 2019. "Economic Impacts of Cover Crops for a Missouri Wheat–Corn–Soybean Rotation," Agriculture, MDPI, vol. 9(4), pages 1-13, April.
    3. Swinton, Scott M., 2004. "Assessing Economic Impacts Of Natural Resource Management Using Economic Surplus," Staff Paper Series 11668, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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