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Commodity Programs and the Internalization of Erosion Costs: Do They Affect Crop Rotation Decisions?

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  • Gregory L. Poe
  • Richard M. Klemme
  • Shawn J. McComb
  • John E. Ambrosious

Abstract

This paper investigates the impact of commodity programs and the internalization of erosion costs on crop rotation decisions. Not surprisingly, commodity programs are found to shift decisions toward more erosive rotations. Internalization of on-site and off-site erosion costs calculated under real interest rates of 2 and 4 percent and planning horizons of 20 and 40 years affect rotation decisions under historical market conditions. Under conditions of commodity program participation, internalization of erosion costs affect rotation decisions only when lengthy time horizons (40 years) are considered. The impact of cross-compliance restrictions on rotation decisions is also examined.

Suggested Citation

  • Gregory L. Poe & Richard M. Klemme & Shawn J. McComb & John E. Ambrosious, 1991. "Commodity Programs and the Internalization of Erosion Costs: Do They Affect Crop Rotation Decisions?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 13(2), pages 223-235.
  • Handle: RePEc:oup:revage:v:13:y:1991:i:2:p:223-235.
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    File URL: http://hdl.handle.net/10.2307/1349639
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    Cited by:

    1. Gebremedhin, Berhanu & Schwab, Gerald, 1998. "The Economic Importance Of Crop Rotation Systems: Evidence From The Literature," Staff Paper Series 11690, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Poe, Gregory L., 1994. "Extra-Market Considerations in Farmland and Agricultural Policy," EB Series 186286, Cornell University, Department of Applied Economics and Management.
    3. Gebremedhin, Berhanu & Schwab, Gerald & Harwood, Richard R. & Christenson, Donald & Bricker, Calvin, 1998. "A Stochastic Dominance Analysis Of Alternative Sugar Beet- And Navy Bean- Based Crop Rotations In Michigan," Staff Paper Series 11509, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Poe, Gregory, 1997. ""Maximizing the Environmental Benefits per Dollar Expended" An Economic Interpretation and Review of Agricultural Environmental Benefits and Costs," EB Series 186405, Cornell University, Department of Applied Economics and Management.

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