CROP DENSITY AND IRRIGATION WITH SALINE WATER

The economic implications of plant density for irrigation water use under saline conditions are investigated, utilizing the involved physical and biological relationships. The analysis considers a single crop and is applied to cotton data. The results suggest that treating plant density as an endogenous control variable has substantial impact on profits and the optimal quantities and qualities of the applied irrigation water.Crop Production/Industries,

REGIONAL PLANNING OF WASTEWATER REUSE FOR IRRIGATION AND RIVER REHABILITATION

With some agri-environmental restrictions, municipal wastewater can be utilized for agricultural irrigation and river rehabilitation. This paper develops a single-year planning model for a region in Israel which consists of a city and three potential wastewater consumers. The model incorporates, in one endogenous system, the economic, physical and biological relationships in the water-soil-plant environment system and its objective is to maximize the regional social welfare composed of the sum of agricultural and environmental net benefits. The model determines the optimal crop mix and the optimal allocation of the limited water and land resources among all potential users. Then, different allocation approaches from the concept of transferable utility games are applied to determine a reasonable and fair allocation of the additional net benefits which will be accepted by the players. The results support the collaboration among the economic entities and indicate economic and environmental advantages which can serve the decision-makers.Wastewater reuse, Allocation, Optimization Model, Transferable utility games, Resource /Energy Economics and Policy,

Stimulating Organic Farming Via Public Services and an Auction-Based Subsidy

In order to stimulate organic farming governments generally use a mix of temporary hectare payments and provision of public services for stimulating the development of the organic sector. In this paper a conceptual model is developed for determining a socially optimal hectare payment for any given level of public services. Farm heterogeneity, due to the variability of soil quality and management skills, is explicitly taken into account. Using an n-th price auction mechanism farmers indicate what their reservation subsidy is for a given level of public input provision. The outcome of this problem is utilized in the government's optimization problem. We found that the level of per hectare socially optimal subsidy increases significantly with the elasticity of the social welfare function and decreases significantly with the degree of farmers' heterogeneity in suitability of growing organic crops (OC) as well as with the level of complementary governmental services. The total area planted for OC is also quite sensitive to these parameters. The effects of the deadweight loss parameter and the degree of risk aversion on per hectare subsidy and on total organic acreage are relatively small.auctions, organic farming, policy mix, Agricultural and Food Policy, Q28, Q12,

Agri-Environmental Instruments for an Integrated Rural Policy: An Economic Analysis

The new Rural Development Regulation of the EU reflects the shift of attention within rural areas from agricultural production towards rural development and embraces both, farmers and non-farm residents. While agricultural production is required to comply with environmental standards, rural areas also have to fulfil the growing demand for landscape, outdoor recreation and wildlife conservation. This paper develops a model of a rural area where farmers and non-farm residents live together. A central government uses a combination of two-policy instruments--direct compensation payments and public services -- aimed at encouraging farmers to adopt environmentally beneficial practices and at the same time to increase the provision of country-side amenities and the sustained vitality of the rural area. The optimal mix of the policy instruments is evaluated under various governmental objectives. The analysis suggests that a combination of direct payments to farmers with the supply of local public services is a promising tool for rural policy development initiatives in the EU.Rural development policy, farmers and non-farmers, integrated rural policy, landscape and recreation, Community/Rural/Urban Development,

The Value of Information on Crop Response Function to Soil Salinity in a Farm-Level Optimization Model

The study investigates the value of additional information on the response function to soil salinity of a given crop (potatoes), with regard to a stochastic long-run optimization model for utilization of saline water to a single farm framework. The analysis provides a conceptual and methodological framework for investigating the expected value of sample information (DVSI), as well as an efficient tool for empirical application. Although a few approximations have been used, the results provide an estimate of EVSI and indicate the need for additional information

REGULATION OF NITROGEN POLLUTION: TAXES VERSUS QUOTAS

This paper investigates the effects of first-best policies to regulate nitrogen application. Some nitrogen fertilizer is applied ex ante before a random rainfall, but sidedressed nitrogen may be applied ex post. First-best policy is a tax or a quota on ex ante application, because sidedressed nitrogen is not leached. Since a risk-averse farmer uses more nitrogen ex ante than a risk-neutral farmer, a higher tax must be imposed on the former. Action equivalent first-best taxes and quotas are also welfare equivalent. An empirical model for wheat in Israel was used to demonstrate the analytical findings.Environmental Economics and Policy,

Uncertain Land Availability and Perceived Biases in Investment Decisions: The Case of Dutch Dairy Farms

Uncertainty about the possibility of acquiring land can be rather large in the EU for sectors like dairy farming. Farm-level investment decisions are commonly made ex-ante when the farmer is not certain about the possibility of purchasing land. This possibility is realized only in a future period. In this paper, we have developed and applied a simple two-period model in which a profit-maximizing farmer, facing uncertainty about the possibility of acquiring land, had to choose the optimal mix of capital (buildings) investment and land endowment. We have shown that commonly "observed" biases towards non-optimal investment decisions are not necessarily justified. Rather, these perceived biases may be the result of evaluating investment decisions without reference to the uncertainty associated with the possibility of acquiring land.investment, land, uncertainty, Land Economics/Use,

UNCERTAINTY AND THE MANAGEMENT OF SALINITY WITH IRRIGATION WATER

The impact of uncertain salt balances in irrigate fields is assessed with a hydroeconomic model that incorporates the effects of salinity. Uncertainty in two parameters that jointly determine root zone salinity is investigated and the conclusions prove to depend upon the way in which these parameters enter the mass-balance equation for soil salinity. It is shown that water has a risk reducing marginal effect on output when growers are risk averse and, under certain conditions, when they are risk neutral. The effects of prices, water quality, and crop salt sensitivity on the conclusions are analyzed and an empirical example is employed to illustrate the magnitude of the impacts.Crop Production/Industries,

ON A POLITICAL SOLUTION TO THE NIMBY CONFLICT

Political Economy,

Distributional Welfare Impacts of Public Spending: The Case of Urban versus National Parks

This study examines the optimal allocation of funds between national and urban parks. Since travel costs to national parks are significantly higher than to urban parks, poor households tend to visit the latter more frequently, whereas rich households favor the former. Therefore, allocating public funds to improving the quality of national parks at the expense of urban parks disproportionately benefits high income households. By developing a theoretical model and implementing it using Israeli data, findings indicate all households, except for the richest decile, prefer that the park authority divert a larger proportion of its budget from national to urban parks.budget allocation, income distribution, national parks, urban parks, Public Economics,