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Compromise Solution for Economic-Environmental Decisions in Agriculture

Author

Listed:
  • Lakshminarayan, P. G.
  • Atwood, J. D.
  • Johnson, Stanley R.
  • Sposito, V. A.

Abstract

Least-cost production versus the environmental on- and off-site erosion damage of agriculture is evaluated in a policy context for a major Corn Belt watershed. Compromise programming, previously utilized in firm-level multi-criteria decision-making problems, is applied to a regional agricultural production model with environmental policy goal trade-offs. The crop sector model allocates land, water, labor, capital and commodity-program base acres to crop production. Production options include four conservation practices, three tillage methods and several crop rotations. Crop yield and fertilizer levels are dependent upon erosion. Cropping options selected allow for both wind and water erosion. The vector of objectives include three minimization functions: current production cost, future value of productivity loss and sediment damage. Vector optimization technique was used to generate the payoff matrix containing efficient but simultaneously unobtainable solutions. Given the ideal but infeasible solution vector we generated efficient solutions in the compromise subset corresponding to the L1, L2 and L∞ metrics. Trade-off relations were developed using the non-inferior set estimation technique.

Suggested Citation

  • Lakshminarayan, P. G. & Atwood, J. D. & Johnson, Stanley R. & Sposito, V. A., 1991. "Compromise Solution for Economic-Environmental Decisions in Agriculture," Staff General Research Papers Archive 375, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:375
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    References listed on IDEAS

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    1. Carlos Romero & Francisco Amador & Antonio Barco, 1987. "Multiple Objectives in Agricultural Planning: A Compromise Programming Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(1), pages 78-86.
    2. Putman, John W. & Dyke, Paul T., 1987. "The Erosion-Productivity Impact Calculator as Formulated for the Resource Conservation Act Appraisal," Staff Reports 277924, United States Department of Agriculture, Economic Research Service.
    3. David J. Walker, 1982. "A Damage Function to Evaluate Erosion Control Economics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(4), pages 690-698.
    4. John B. Braden & Gary V. Johnson & Aziz Bouzaher & David Miltz, 1989. "Optimal Spatial Management of Agricultural Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 404-413.
    5. Burton C. English & W. Terry Disney & Stanley Schraufnagel, 1989. "Resource Conservation Act Analysis: A Documentation of the Endogenous and Exogenous Livestock Sectors of the Agricultural Resource Interregional Modeling System," Center for Agricultural and Rural Development (CARD) Publications 89-tr12, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Kenneth E. McConnell, 1983. "An Economic Model of Soil Conservation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 83-89.
    7. Ribaudo, Marc O., 1986. "Reducing Soil Erosion: Offsite Benefits," Agricultural Economic Reports 308013, United States Department of Agriculture, Economic Research Service.
    8. James C. Wade & Earl O. Heady, 1977. "Controlling Nonpoint Sediment Sources with Cropland Management: A National Economic Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(1), pages 13-24.
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    Cited by:

    1. Bouzaher, Aziz & Shogren, Jason F. & Holtkamp, Derald & Gassman, Philip & Archer, David & Lakshminarayan, P. & Carriquiry, Alicia & Reese, Randall & Furtan, William H. & Izaurralde, R. Cèsar & Kiniry,, 1994. "Agricultural Policies and Soil Degradation in Western Canada: An Agro-Ecological Economic Assessment (Report 3: The Integration of the Environmental and Economic Components)," Technical Reports 243854, Agriculture and Agri-Food Canada.
    2. Bouzaher, Aziz & Shogren, Jason F. & Holtkamp, Derald & Gassman, Philip & Archer, David & Lakshminarayan, P. & Carriquiry, Alicia & Reese, Randall & Kakani, Dharmaraju & Furtan, William H. & Izaurrald, 1995. "Agricultural Policies and Soil Degradation in Western Canada: An Agro-Ecological Economic Assessment (Report 5: Project Summary)," Technical Reports 243858, Agriculture and Agri-Food Canada.

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