Empirical Assessment of Baseline Conservation Tillage Adoption Rates and Soil Carbon Sequestration in the Upper Mississippi River Basin

The study proposes a methodology for developing a carbon sequestration baseline attributable to the current use of conservation tillage. An integral component of the methodology is the explicit acknowledgment that there is an uncertainty in the baseline because of the uncertainty associated with the use of econometrically estimated models. The results of applying the method to a major crop production area, the Upper Mississippi River Basin in the central United States, are reported for two major crops in the region, corn and soybeans. The approach to estimation of the baseline should be readily transferable to other geographic areas and conservation practices.Environmental Economics and Policy,

AGRICULTURAL HOUSEHOLD MODEL WITH WAGE UNCERTAINTY: AN APPLICATION TO SUBSIDIARY POST-SOVIET AGRICULTURE

The labor supply decision under wage uncertainty is studied in the context of an agricultural household model. The recent sharp growth of post-Soviet subsidiary subsistence agriculture is consistent with the model predictions of an increase in farm labor supply in response to the fall and uncertainty in real wage.Consumer/Household Economics, Labor and Human Capital,

TECHNICAL EFFICIENCY OF GRAIN PRODUCTION IN UKRAINE

A stochastic grain production frontier model is estimated on a representative sample of Ukrainian state farms. Technical inefficiency effects are modeled as a function of workforce composition, other farm-specific variables, and time. Technical inefficiency increased over time. Investment in farm infrastructure is associated with higher levels of technical efficiency.Productivity Analysis,

Land-Use Implications of the Changes in Energy Prices

Land Economics/Use, Resource /Energy Economics and Policy,

Empirical Assessment of Baseline Conservation Tillage Adoption Rates and Soil Carbon Sequestration in the Upper Mississippi River Basin

The study proposes a methodology for developing a carbon sequestration baseline attributable to the current use of conservation tillage. An integral component of the methodology is the explicit acknowledgment that there is an uncertainty in the baseline because of the uncertainty associated with the use of econometrically estimated models. The results of applying the method to a major crop production area, the Upper Mississippi River Basin in the central United States, are reported for two major crops in the region, corn and soybeans. The approach to estimation of the baseline should be readily transferable to other geographic areas and conservation practices.Environmental Economics and Policy,

Institutions and the Value of Nonpoint Source Measurement Technology: Carbon Sequestration in Agricultural Soils

The development of technologies for accurate field-scale carbon assessment allows the implementation of more efficient policies than can be implemented in their absence. We estimate the value of accurate measurement technology by estimating the gains from implementing a more efficient policy, one that targets carbon reductions at the field scale but requires accurate field-scale measurement technology, relative to a practice-based policy that can be implemented in the absence of such technology. We find large cost savings due to improved targeting of conservation tillage subsidies for the state of Iowa. The cost savings depend significantly on the choice of baseline carbon, while the ability of the government to cost discriminate has little impact on the value of accurate measurement technology.carbon sequestration, green payment policy, value of measurement technology.

TARGETING AND THE ECONOMICS OF CUMULATIVE WATERSHED EFFECTS

This study empirically investigates environmental benefits at the watershed level from conservation practices, which are typically non-linear. A conservation tillage adoption model is linked to the Soil and Water Assessment Tool model to examine the effectiveness of various conservation policies aimed at improving water quality in an Iowa watershed.Environmental Economics and Policy,

Is the use of no-till continuous or rotational? Quantifying tillage dynamics from timeordered spatially aggregated data

Understanding and documenting historical agricultural land use and farming practices is important for assessment of environmental benefits of no-till (NT). To address the need for quantitative estimates of time patterns of tillage practices, this study proposes modeling the time patterns using the Markov chains framework and estimating the probabilities of transition from one tillage-crop combination to another tillage-crop combination from time-ordered spatially aggregated data. We developed a first-order, four-state Markov chain model of tillage-crop dynamics in corn (Zea mays L.)–soybean (Glycine max L.) production systems and estimated the transition probabilities for the state of Iowa using the 1992 to 1997 data collected by the Conservation Technology Information Center. The transition probabilities strongly suggest that the majority of NT acreage is not in continuous but rather in rotational NT, i.e., NT crop production in rotation with conventional or other tillage systems. We find that the probability of two-year continuous NT is 8%, and that 70% of Iowa cropland has never used NT over two consecutive years. When three-year tillage history is considered on corn acreage, 3% is in continuous NT, 62% has never used NT, and the rest of the acreage is in rotational NT. When three-year tillage history is considered on soybean acreage, 4% is in continuous NT, 56% has never used NT, and the rest of the acreage is in rotational NT. The methodology presented is applicable to corn–soybean production systems in other regions and is generalizable to other cropping systems. Regional estimates of the use of rotational and continuous NT are likely to benefit simulation modeling for the assessment of the environmental effects of alternative tillage practices

Estimation of a Binary Choice Model with Grouped Choice Data

We propose an econometric technique for estimating the parameters of a binary choice model when only aggregated data are available on the choices made. The method performs favorably in applications to both simulated and real world choice data

THE SUBSIDY FOR ADOPTING CONSERVATION TILLAGE: ESTIMATION FROM OBSERVED BEHAVIOR

Due to payoff uncertainties combined with risk aversion and/or real options, farmers may demand a premium in order to adopt conservation tillage practices, over and above the compensation for the expected profit losses (if any). We propose a method of directly estimating the financial incentives for adopting conservation tillage and distinguishing between the expected payoff and the premium of adoption based on observed behavior. We find that the premium may play a significant role in farmers' adoption decisions. Even for non-adopters, conservation tillage provides a higher payoff than does conventional tillage on average, as agronomists have argued. However, non-adopters do not use conservation tillage because the expected profit gain alone does not fully compensate them for the uncertainties. To induce additional adoption, subsidies could be used. We find that in Iowa on average, the mean subsidy needed is $2.40 per acre per year for corn and$3.50 per acre per year for soybeans.Land Economics/Use,