Agricultural land and landscapes
The agricultural land provision of private and public goods is studied by inter-disciplinary approaches on the supply from a resource economics perspective and on efficient policy measures from a welfare economic perspective. The socially optimal production of landscape public goods is derived theoretically by introducing the concept of quantitative hectares where measures of area and biodiversity etc. are integrated. Agri-Environmental Payments based on state Indicators (IAEPs) expressing the presence of public goods at the object level (field, landscape element) are developed and tested as an attempt to efficiently promote optimal supply in policy practice. A model of meta-criteria and criteria is developed, resulting in a coherent and complete set of seven composite indicators for Swedish conditions. Estimating the indicators in two study areas indicates large heterogeneity in the supply of public goods, and consequently that IAEPs would differ significantly across objects and accordingly from the present. The public good IAEPs turn out as giving a more efficient resource allocation, better dynamic incentives and lower transaction costs than the corresponding Swedish payments, but conflict with WTO-demands on cost-based payments and give large distributional effects. A concept and measure of agricultural land resources is introduced, defining their size by their capacity to yield products in physical or economic terms. The physical resource measure "barley-equivalents" is developed and calculated by combining production functions with statistics from the 420 agricultural districts of Sweden. A further development is the concept of standard-hectares, making acreage comparisons possible amongst different grades of land. The economic measure of the resources is land rent, here calculated as the residual of revenues minus costs in crop production. Swedish arable resources measured by land rents are fairly heterogeneous, showing distinct regional patterns. The rent of Swedish arable land was nearly normally distributed around a mean of US$ 100 per ha (1983). The arable land resource situation is also illustrated by a new diagram that plots land rent against cumulative acreage. The model of Swedish arable resources is furthermore used to estimate the possible impacts of sub-soil compaction, urban exploitation, tropospheric ozone and other major resource influencing factors.
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