Results from the Farm Behaviour Component of the Integrated Economic-Hydrologic Model for the Watershed Evaluation of Beneficial Management Practices Program

This report summarizes preliminary results from the Farm Behavior component of the South Tobacco Creek Integrated Modeling Project (STC Project) which is being undertaken as part of the Watershed Evaluation of BMPs (WEBs) Program. WEBS is a partnership between Agriculture and Agri-Food Canada (AAFC) and Ducks Unlimited Canada (DUC) established to evaluate the economic and environmental performance of BMPs for water quality at the watershed scale. Water draining from South Tobacco Creek eventually enters to Lake Winnipeg which is degraded from the cumulative effects of nutrient loading, particularly phosphorous. Many jurisdictions across the world, including Canada, use payments programs to encourage land owners to change land management practices in order to reduce non-point source pollution. BMP incentive programs in Canada, such as Greencover, rely on fixed payment schemes which pay producers a set amount for BMPs, regardless of costs or benefits. In order to improve the performance of payment programs many jurisdictions have instituted auction type mechanisms. The purpose of the Farm Behavior component of the STC project is to examine the performance of various types of payment programs for BMPs relative to reducing phosphorous loads from STC. Theoretical and empirical evidence from conservation auctions suggest that the performance of auctions depends on several factors which affect the bidding behavior of producers during the auction, and therefore the cost-effectiveness of auctions over other types of payment programs. In particular, some producers actually benefit from BMPs, however under certain auction rules these producers would be paid the same amount as high cost producers; alternatively, producers with low costs of adopting BMPs may not always provide the greatest benefits in terms of pollution abatement depending on their location in the watershed, and physical features of their land. We assessed the relative performance of different payment programs by developing producer response functions for adoption of Beneficial Management Practices (BMPs). Producer adoption responses under different incentive schemes were tested using experiments with student subjects and limited trials with producers. We examined four BMPs: construction of holding ponds, riparian management, forage conversion, and conservation till. The results of the adoption response experiments conducted under WEBS were used to draw preliminary observations on BMP policy design and form the basis for recommendations for further research. The farm behavior project focuses on addressing the following two questions: 1. Does BMP adoption at a given farm make the individual farm household better or worse off from an economic perspective? 2. How much will it cost the government to get farms to adopt BMPs under different payment programs? Since producer heterogeneity is key to understanding the performance of conservation auctions, we examined the costs and benefits of BMPs at the individual farm level and developed on-farm costs for each BMP for each producer in the watershed. The basic components of the model are described below, however the details including underlying assumptions regarding baseline farm behavior, are outlined within the body of the report. We used the on-farm cost model to generate aggregate cost functions for BMPs for the watershed and to parameterize the policy experiments related to conservation auctions. Preliminary estimates of environmental benefits of individual BMP adoption were provided by Dr. Wanhong Yang using results from a SWAT model developed under a separate component of the South Tobacco Creek WEBS project. Based on this information, we were able to evaluate the performance of various auction formats in terms of cost effectiveness, distribution of payments amongst producers, and environmental benefit. The results from the Farm behavior component of the South Tobacco Creek project are preliminary, and are currently being refined. Therefore it is difficult to draw generalized conclusions at this point. Further experiments are being conducted to complete the data collection during FY 08-09 through Interim WEBS funding. Nonetheless main findings to date are summarized below: 1. The four BMPs assessed differ in terms of their cost as well as their ability to deliver environmental benefits. Unfortunately, there is no BMP that dominates across farms at all abatement levels. Farms have heterogeneous costs in terms of BMPs, and some farms are cost effective at supplying abatement using one BMP, but not another. 2. This suggests that if water quality benefits (e.g. phosphorous reduction) can be quantified through modeling by BMP and by farm, then water quality should be the contracting unit for the auction rather than the BMP. This would allow producers to select the most cost effective BMP for supplying water quality benefits, and then decision makers could allocate contracts based on ranking the costs of abatement. 3. At the next stage of the research we will test for synergies between farms – ie., whether the joint production function for water quality between farms differs from the sum of individual production functions. This will have implications for how the payment scheme should be designed. 4. Incorporating „fairness‟ types of allocation rules for conservation dollars, such as maximum participation in conservation programs is inefficient in terms of cost and environmental benefits. If fairness, or using conservation payments as a form of extension to learn about on farm costs of BMPs is the goal of the auction, then fixed payment programs which are open to everyone may be more desirable. 5. The performance of the auction depends on the shape of the cost function for BMPs and/or pollution abatement, as well as whether uniform (pay everyone the highest bid) or discriminatory pricing (pay everyone their own bid) rules are applied. In future research we will be investigating to what extent we can generalize results about the performance of uniform versus discriminatory pricing rules in this context. In conclusion, this research has allowed us to investigate individually the performance of incentive payments for individual BMPs. The results of the analysis provide us with a baseline of information by which we can begin to assess more complex conservation program issues, such as how to optimally select multiple BMPs within the watershed, and whether/how to spatially target BMPs.watersheds, South Tobacco Creek, water quality, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q12,Q52,D44,

SMAPVEX12: the latest dirt on soil moisture monitoring with remote sensing

Non-Peer Reviewe

Economic Impacts of Climate Change and Weather Extremes on Canadian Prairie Mixed Farms

Canadian Prairie agriculture, in general, is expected to benefit under climate change with increasing mean temperatures projected for the immediate future. However, a number of knowledge gaps still exist. Foremost among these is the measurement of the effects of extreme climate events in a given year as well as their long-term impact on the supply of agricultural products, and also the financial situation of farms. In addition, the economic impacts of climate change on livestock operations are relatively under-studied. In particular, knowledge of the impacts on Prairie beef cattle remains more guesswork than research-based evidence. This dissertation assesses the impact of changes in the normal climate as well as the impact of climate extremes by including projected inter-annual climate variability. The economic impact of these changes on crops, beef cattle activities and the viability of farms in mixed operation settings is measured. Correspondingly, this work presents alternative adaptation measures and their likely use in managing mixed farm operations for future extreme weather events. For the analysis, two study sites are selected: (1) the Oldman River Basin of Alberta, called Pincher Creek, and (2) the Swift Current Creek Basin of Saskatchewan, called Swift Current. This study is a part of a larger project entitled “Vulnerability and Adaptation to Climate Extremes in the Americas” and the study sites are intended to represent the project catchment areas in the provinces of Alberta and Saskatchewan. I develop what I call a MF-CCE model (Mixed Farm model for the economic impact assessment of Climate Change and Extremes). The MF-CCE is a whole farm simulation model that integrates models of beef cattle production, crop production and climate changes into farm level economic decisions. Simulations are conducted over a 30-year period in each climate scenario: the first of these is a baseline climate scenario from 1971-2000, and I also simulate future climate change impacts for the 2041-2070 era. The modelled farms produce enough crops, hay and pasture to support the beef cattle feed demand. Pasture demand and supply are linked by specific pasture requirements and productivity. Beef herd feed grain demand and on-farm supply are linked by a linear programming optimization algorithm. Crop mix for the market is selected through the development of a multi-year linear programming problem that maximizes the present value of gross margins. Crop and hay productivity are estimated through the Food and Agriculture Organization’s (FAO’s) AquaCrop (version 3) modeling framework, while annual pasture productivity is estimated using the Forage Calculator for Native Rangeland obtained from the Saskatchewan Research Council (SRC). The AquaCrop is a water-driven crop simulation model, termed a crop water productivity (WP) model which simulates the yield response of herbaceous crops to water availability and use. The model is believed to be superior in simulating crop yield in the conditions where water is a key limiting factor in crop production (FAO, 2011). Summarizing the results of the simulation, prairie crop production is expected to benefit under the simulated climate change scenario. Increases in crop productivity generate about 60% higher profits in the Pincher Creek site and about 57% more for the Swift Current site. Due to increases in grain and hay productivity, more area is made available to produce grain for the market. This effectively doubles the crop net return at the Pincher Creek site and triples the crop return at the Swift Current site. A consideration of future pasture response to the climate change scenario is important in estimating climate change consequences for live beef production as well as on the economic return of a mixed farm. If the pasture productivity decreases, as assumed under the regular pasture yield scenario in the study, appropriate adaptation is necessary for the farm to benefit from future climate change. Under this scenario, beef production activities in the future are projected to gain by 50% in Pincher Creek and 40% in Swift Current compared to the baseline scenario. If pasture productivity under the future scenario increases in a manner similar to crop yield increases, existing pastureland will be enough to maintain beef herds into the future. In turn, this strategy will mitigate the cost of beef herd adaptation during climate extremes, and instead gains from beef cattle production would be 35% higher in Swift Current and 6% higher in Pincher Creek relative to gains under regular pasture yield conditions. At the farm level, with beef cattle and crop production combined, substantial gains are projected for both of the study sites. Farm net profit is estimated to increase by more than 35% at the Pincher Creek site and more than 140% at the Swift Current site under the future scenario. Income risk will also be lower in this scenario, as highlighted by a lower coefficient of variation of net farm profit. Farm financial indicators tracked in this study – farm cash flow, family cash flow, and farm net worth – all indicate that the farm’s financial position will be much better in the future climate scenario. At the Pincher Creek site, a few problematic liquidity events are forecasted under the future climate scenario, but in light of significant improvements in other economic indicators, overall, this effect is negligible. The appropriate choice of adaptation strategies for managing beef herds during extreme climate events plays an important role in determining the profitability of not only beef cattle activities, but also the financial position at the whole farm level. However, the choice of adaptations is contextual: the preference of adaptation strategy differs across activities, farms and period of study. For beef cattle activities, maintaining the beef herd without any compromise on herd size and implementing a regular feeding plan is preferred to other adaptation alternatives. At the whole farm level for the Pincher Creek site, culling the herd is preferred under the baseline scenario, while the purchasing feed option is preferred under the future climate scenario. At the Swift Current site, culling the herd is the preferred strategy under both scenarios. Commodity prices and the cost of farm inputs profoundly affect the economic position of the farm under the future climate change scenario. If commodity prices and cost of production remain the same as under the baseline scenario, future farm net profit is estimated to be 50% higher for the Pincher Creek site and about 25% higher for the Swift Current site, compared to profits under projected future prices. This result implies that the pure effect of climate change could be much higher if costs and prices do not change. Results of this dissertation indicate that average Prairie mixed farms, as represented by these study farms, remain economically viable under both the baseline and future scenarios. The results also suggest that the overall gain to these farms under a future climate change scenario would be positive. The potential severity of extreme climate events in the future, at least for the future scenario period simulated in this study, would not be significant enough to threaten the future economic viability of Prairie agriculture. However, the research also highlights the importance of policies that support farmers when they endure losses in years of extreme climate events. Further research on evaluating different Best Management Practices (BMPs) in dealing with droughts, for example, would be helpful in taking advantage of future climate change. Policy development to enhance the longer-term adaptive capacity of Prairie farmers, such as development of early warning systems for climate extremes, or the development of drought tolerant cultivars of crops and forages, would be most helpful in coping with climate extremes in the future

Enabling Policy Environments for Co-operative Development: A Comparative Experience

This research project will identify effective tax policy models and strategies of policy advancement for the co-operative sector. The project will draw on a comparative analysis of tax models from Spain (Mondragon Co-op) and Italy (Emilia Romagna region) and will include a scan of tax policy and legislation regarding co-operatives in Manitoba, Saskatchewan, and northern Ontario. The objective of this research is to analyze different tax policies that have played a key role in the development of the co-operative sector and in creating sector controlled, self-sustaining co-operative development and financing tools by exploring the possibilities of parlaying the research results from the international models into appropriate models in Canada, with specific consideration to the Manitoba context. This research will build on existing literature regarding tax models and policies, supports and barriers, and the various factors that contributed to the sustainability of co-operative development in various parts of the world. A review of the tax legislation in key tax systems (namely Spanish, Italian, and Canadian at the federal/provincial levels) will also be necessary

Proceedings of the 2012 Canadian Organic Science Conference

The Canadian Organic Science Conference and Organic Science Cluster Strategic Meetings featured leading scientists presenting and discussing current advances in the field of organic and sustainable agricultural practices in Canada and beyond. Information is of interest to both organic and conventional researchers, with research presented in a diverse range of fields, including: soil fertility, quality and health; horticultural and specialty crops; cereal-based cropping systems; livestock productivity, health and welfare; greenhouse production and season extension; food, sustainability and organic systems; social science and organic agriculture; and extension of organic research

Northern adapted flax variety development project

Non-Peer ReviewedIn 2010, the Northern Adapted Flax Variety Development Project (NAFVD) was launched. This project represents collaboration between the Saskatchewan Flax Development Commission, Viterra, the Alberta Innovates Technology Futures and the British Columbia Grain Producers Association. The breeding objective of the project is to develop new flax varieties better adapted to the northern region of Western Canada. The agronomic objective of this project is to determine best management practices for northern flax production

Seed-placed P and S fertilizers: effect on canola plant stand and yield

Non-Peer Reviewe

Modelling soil dynamics and the effect of nitrogen levels on potato yield function

Non-Peer ReviewedCrop yield is maximized when optimal levels of nutrients, water, and other inputs are available to the crop and the influence of disease and weeds has been minimized. While each crop has differing responses to nutrient availability, modelling soil dynamics and the effect of nitrogen levels on potato yield is very important. The objective of this study was to model several environmental components of potato yield function including soil characteristics and organic matter content, soil nitrogen, temperature component, moisture component, solum and nitrogen mineralization, nitrogen fertilizer, and nitrogen sufficiency. The interaction of these components with moisture availability and nitrogen sufficiency was shown to impact potato yield

EFFECTS OF UTILIZING CROP RESIDUES IN WINTER FEEDING SYSTEMS ON BEEF COW PERFORMANCE, REPRODUCTIVE EFFICIENCY AND ECONOMICS

Over 2 years (Year 1, 2009-2010; Year 2, 2010-2011), two separate experiments were conducted to evaluate the effects of winter feeding system (n=3) on beef cow performance, reproductive performance, economics and forage degradability. The three systems (treatments) were grazing pea crop residue (PEA) cv. ‘Performance 40-10’ (Year 1, TDN = 50.2%, CP = 7.3%; Year 2, TDN = 56.9%, CP = 8.9%) in field paddocks, grazing oat crop residue (OAT) cv. ‘Baler’ (Year 1, TDN = 59.1%, CP = 2.9%; Year 2, TDN = 66.9%, CP = 5.3%) in field paddocks, and feeding mixed grass-legume hay in drylot pens (DL) (Year 1, TDN = 61.4%; CP = 8.8%; Year 2, TDN = 52.3%, CP = 12.3%). In the first experiment, 90 dry, pregnant Black Angus cows (Year 1, 629 kg ± 74 kg; Year 2, 665 ± 69 kg) stratified by body weight (BW) and days pregnant were randomly allocated to 1 of the 3 systems. Cows were allocated feed in the field or pen on a 3 d basis and supplemented oat grain daily at 0.4-0.6% BW depending on environmental conditions. Dry matter intake (DMI) was estimated for each system using the herbage weight disappearance method. Cow BW, body condition score (BCS), and rib and rump fat were measured at start and end of trial and cow BW was corrected for conceptus gain based on calving data. When data from the first 20 d were pooled over 2 years, initial cow BW was greater (P < 0.01) for the DL and OAT cows compared to the PEA cows and final cow BW was different (P < 0.01) between all 3 winter feeding systems. The change in BW was also greater (P < 0.01) for DL cows compared to cows on the OAT and PEA treatments. Analysis of the first 20 d of Year 1 study period and the total Year 2 study period, showed a significant (P < 0.01) year by treatment interaction for final BW and BW change. The differences (P < 0.01) in initial BW, final BW and BW change between the first 20 d of Year 1 study period and the total Year 2 study period (20 d) suggest feed quality, animal preference and weather conditions may cause difficulties when grazing residues in winter grazing systems. Analysis of the entire trial period in Year 1 (62 d) indicates differences (P 0.05) was found for cow rib and rump fat in Year 2 and no difference (P > 0.05) was found for BCS in either Year 1 or Year 2 for cows managed in all 3 systems. Differences (P 0.05) cows managed in the DL and PEA or OAT and PEA systems. Costs per cow per day were $1.22,$1.01 and $2.77 for PEA, OAT and DL systems in Year 1, respectively. In Year 2, cow costs per day were$1.59, $1.44 and$1.84 for PEA, OAT and DL systems, respectively. In experiment 2, three ruminally cannulated, dry Holstein cows were fed a silage based total mixed ration (TMR) of 22 kg barley silage, 7 kg chopped alfalfa hay and 1 kg energy supplement (DAC-485). In-situ degradability was studied to determine the extent of degradation of pea, oat and grass-legume hay collected at start (SOT) and end of test (EOT) in experiment one. Rate of degradation (Kd) of DM was greater (P 0.05) were observed between either OAT SOT and OAT EOT or PEA SOT and PEA EOT for S, D, U, ED or RU suggesting that weathering did not have an effect on the degradability of the forages. The results of these experiments show that it is possible to maintain cow BW through the winter months in Western Canada by grazing oat crop residues, which have the potential to reduce winter feeding costs