Optimal Conjunctive Use of Surface and Groundwater with Recharge and Return Flows: Dynamic and Spatial Patterns

This paper derives the efficiency price patterns for a comprehensive spatial and dynamic model of conjunctive water use incorporating conveyance losses, canal return flows, and groundwater recharge. The first-best shadow price of surface water is composed of a charge for water that flows into the farm and differential credits for water that flows to other uses. The shadow prices can be used as the basis of water pricing schemes or for exchange rates to facilitate water trading. We show that farmers near the headworks use irrigation water in the optimal program, and only farmers more distant from the headworks extract groundwater. We also illustrate the possibility of reswitching in the sequence of resource use. It may be efficient for some farms to switch from one source to another and then switch back again, e.g. groundwater to surface water to groundwater.water management, conjunctive use, irrigation, return flows, conveyance loss, consumptive use, sequence of resource use

Confuser Cost

The terms “royalty”, “marginal user cost”, and “scarcity rent” are often used interchangeably in resource economics, resulting in considerable confusion. We suggest distinct and meaningful definitions for the terms “royalty”, “marginal user cost”, and “scarcity rent” and discuss the relationships among them. Using the example of extraction fees for leasees, we show how failing to understand the distinct meaning of these terms may lead to policy errors. By constructing a model containing both capital and resources as state variables, we verify that user cost in capital theory is a different concept than marginal user cost in resource economics and suggest a taxonomy to avoid misinterpretation.renewable resources, marginal user cost, royalty, scarcity rent, shadow price, Hotelling rent, user cost of capital

Coastal Groundwater Management with Nearshore Resource Interactions

This paper develops a regional hydrologic-ecologic-economic model of groundwater use and a nearshore ecosystem. Particularly, we model coastal groundwater management and its effects on discharge, nearshore water quality, and marine biota (e.g., indigenous marine algae). We show that incorporating the external effects on nearshore resources increases the optimal steady-state head level. Numerical simulations are illustrated using data from the Kuki’o region on the island of Hawaii. Two different approaches for incorporating the nearshore resource are examined. We find that including algae’s market value directly in the objective function calls for lower, albeit slightly lower, water extraction rate in all periods. If a minimum constraint is placed on the stock of the keystone species, greater conservation may be indicated. The constraint also results in non-monotonic paths of water extraction, head level, and water price in the optimal solution.groundwater management, submarine groundwater discharge, stock externality, nearshore resources, safe minimum standard, marine algae, dynamic optimization model

Impatience and Intergenerational Equity in a Model of Sustainable Growth

We argue that intergenerational neutrality has been prematurely excluded from the dialogue on sustainable growth. By incorporating Burton’s distinction between intragenerational and intergenerational discounting into a model suitable for analyzing sustainability issues, we are able to accommodate some of the underlying concerns. We show that in an economy with a renewable resource, eschewing intergenerational discounting leads to the implication of a sustained growth path, without the necessity of a sustainability constraint. We find that green net national product remains constant along the optimal approach path to golden rule consumption. This avoids the paradox that maximizing sustainable income leads to unsustained consumption and income.Sustainable development, intergenerational equity, intra-generational discounting, renewable resources, green net national product

PRICING RESOURCE EXTRACTION WITH STOCK EXTERNALITIES

Resource /Energy Economics and Policy,

Renewable Resource Management with Stock Externalities: Coastal Aquifers and Submarine Groundwater Discharge

This paper develops a hydrologic-ecologic-economic model of groundwater use. Particularly, we model coastal groundwater management and its effects on submarine groundwater discharge, nearshore marine water quality, and marine biota. We show that incorporating the external effects on nearshore resources increases the optimal sustainable steady-state head level. Numerical simulations are illustrated using data from the Kuki’o region on the island of Hawaii. Two different approaches for incorporating the nearshore resource are examined. Including algae’s market value in the objective function results in only slightly lower rates of extraction. When a minimum constraint is placed on the stock of the keystone species, however, greater conservation may be indicated. The constraint also results in non-monotonic paths of water extraction, head level, and water price in the optimal solution.groundwater management, marine ecology, dynamic optimization, safe minimum standard, sustainability science

การศึกษารายได้เกษตรกรจากการปลูกข้าวโพดเลี้ยงสัตว์ และวงจรอุบาทว์ของการปลูกข้าวโพดเลี้ยงสัตว์ในที่ชัน

With continuous supports by the Thai government and private sector over the past three decades, maize has become one of the major cash crops grown in many parts of Thailand. This paper employs data gathered from maize farmers in various areas of Wiangsa District in Nan province, to investigate a profit margin out of a price per kilogram of maize retained by farmers, taking into account the differences in farmers’ socioeconomic contexts, and their sources of money spent on maize cultivation. The result obtained allows us to calibrate the farmers’ accumulated income over the year 2004 to 2010. Linear regression and Logitmodel are used to find factors determining level of maize income and a tendency of farmers to rely on informal credit as a source of money used for cultivation, respectively. These analyses highlight the importance of highland/lowland factors, that is: the highland farmers tend to have lower level of maize income and are more dependent on informal credit than the lowland ones. A qualitative analysis of farmers’ access to certain agricultural policies, together with the results from regression and calibration analyses enable us to get a big picture of the situation faced by highland maize farmers. Such situation is well-captured by a “vicious cycle of highland maize farming” whereby the more farmers produce, the worse their situations become

A study of farmer’s decision and incentive scheme to reduce highland maize farming in Thailand

During the past 15 years, there has been a considerable increase in highland maize farming in Nan, a province in northern Thailand. The increase in farming area causes an excessive forest encroachment and environmental problems, e.g. soil degradation, landslide, and pesticide contamination. This research explores the mechanism and factors which drive a sustainable transformation from highland maize farming to reforestation. We survey 107 farmers in Nammeed and Sopsai watersheds in where the reverses of growing trend of deforestation in Thailand have been observed. Comparative statistical analysis and regression are used to analyse factors affecting farmer’s decisions and compare differences between the two sites. We find that the fundamental mechanism driving a sustainable transformation from highland maize farming to reforestation comprises 3 pillars. These are 1) realization of adequate economic, health or environmental benefits derived from the alternatives; 2) a sense of belonging and attachment towards the forest and 3) effective enforcements of communal rules and regulations. While natural transformation in Nammeed area highlights the roles of flatland as key driver of the change, subsidy schemes can supplement the transformation during transitional period as seen in Sopsai area

A Study of Farmer’s Decision and Incentive Scheme to Reduce Highland Maize Farming: the Case of Nan Province

During the past 10 years, there has been a considerable increase in highland maize farming in Nan. The increase in farming area causes an excessive forest encroachment and environmental problems, e.g., soil degradation, landslide, and pesticide contamination. One of the main reasons for this is the rapid expansion of maize farming area owing to the drastic increase in maize price, together with the government’s ineffective enforcement in forest conservation. Attempts made both at the national and local levels in the past to reduce highland maize farming have not shown much success. Maize farmers do not find it easy to leave their accustomed cultivation practice on highland in search of a more eco-friendly alternatives. Several reasons can be used to explain this sluggishness. For most highland farmers, once engaged in maize farming, they got locked into cycle of informal debt due to maize’s high production cost. Without sufficient and concrete incentives to induce change in farming behavior, it seems highly unlikely that the farmers would be able to reduce highland maize farming. The government policy to directly intervene or guarantee maize price, although intended to help relieve farmers’ endless problem of poverty, has indirectly fueled the maize farmers to expand their farming land and get locked into the vicious cycle of highland maize farming even deeper. Nonetheless, there are some areas that not only managed to resist the alluring market force of maize, but also found way to rehabilitate and conserve forests using local participation as the most vital mechanism. The Nam-Meed watershed has beautifully succeeded in the reforestation and reduced highland maize farming. The engagement of farmers in specifying and enforcing forest rule and regulations, coupled with appropriate role and timely supports by the officials of Nam-Meed Watershed Management Unit are believed to create profound impacts on the farmers’ attitudes toward conservation. In a rather different context, the Sop- Sai watershed has also managed to trigger a transformation from highland maize farming to reforestation. Since 2009, the area has received assistance in form of large-scale incentive scheme from “Pidthong Lungpra” foundation whose aims were to alleviate poverty problem, improving farmers’ livelihood and reduce deforestation in watershed area. This incentive mechanism has started to show significant results in changing farmers’ highland farming behavior, as they deserted maize farming to grow perennial economic trees. This research interviewed and surveyed data from 6 villages in Nan: 3 villages in Nam- Meed upper-watershed and 3 villages in Sop-Sai upper-watershed, so as to understand the fundamental mechanism and common factors which drove a sustainable natural transformation from maize farming to reforestation. The objectives of this research are to 1) demonstrate the possibility of a win-win solution in which farmers have higher incomes while forest is also restored; 2) analyze the effectiveness of various subsidy schemes; 3) explore important factors influencing farmers’ decision in reducing their highland maize farming; and 4) suggest plausible policy recommendations which lead to a reduction in highland maize farming. We found that the fundamental mechanism driving a sustainable transformation from highland maize farming to reforestation comprises 3 pillars; these are 1) adequate returns from the alternative practices; 2) a genuine love and attachment towards the forest and 3) effective enforcements of communal rules and regulations. These pillars essentially reinforce one another and are crucial factors for achieving the win-win solution in the long-run. According to surveyed data, alternative practices which can be used as a substitution for maize farming in highland can be either crop rotation in flatland, tree plantation in highland (economic forest), or reforestation in highland. With proper supports, these alternatives potentially generate higher income than maize farming in highland. In other words, farmers naturally quit growing maize in highland in search of higher income from a more forest-friendly alternative. To opt for any of the three alternatives or their mixture depends largely on the areas’ geographical and social conditions. While investigation of the natural transformation in Nam-Meed area highlighted the availability, allocation, and utilization of flatland as key driver of the change, such requirement does not always hold in the area where a rapid transformation was called for, like in Sop-Sai watershed. Subsidy schemes were used to supplement returns from new alternatives and to overcome limitations (e.g. geographical limitation) during transitional period. Using survey data from the area, we found that farmers of diverse socioeconomic backgrounds valued subsidy schemes differently. In order to successfully incentivize farmers’ behavior, the effective subsidy must take into account farmers’ socioeconomic characteristics and the area’s limitations. Our findings do not support a “one size fits all” subsidy approach. The first and foremost policy recommendation for the government is to send clear and strong signal of her commitment to solve the issue of deforestation in highland. Coherent directions of both agricultural policy and natural resource management are urgently needed. While the agricultural policy can aim to support alternatives that are contingent on ecological richness, the policy from a natural resource management standpoint cannot completely detach forests from local or indigenous people. Local community which conserves forests should be allowed not only with a balanced use of the forest, but also a communal right to regulate such use. In addition, collaborations from private sector in sending clear market signals are considered vital in supplementing government’s efforts. Price mechanism as well as maize standards are examples of channels for appropriate signals

Agricultural Business Model and Sustainable Development in Highland: A Case of Nan, Thailand

Over the past decade, forestsin the Northern Thailand have reducedrapidly. Farmers’ well-being and highland environment have also suffered vastly, owing to an expansion of maize farming. To induce farmers to adopt a more environmental friendly alternative, it is essential that policy makers must understand potential business models that could lend good support to highland agricultural system and bring forth sustainability. This paper studies constraints and advantages of existing highland business models in Nan. We consider impacts of engaging in various business models on farmers’ livelihood and environments. Data were gathered from 146 household-surveys in 7 areas of Nan and in-depth interviews with local stakeholders, government and development agencies. We show that different agricultural systems and business models fare different impacts on economic, social and environment. Contact farming reduces price uncertainty for farmers, but creates significant negative impacts on social and environment. Farmers’ aggregation help strengthen farmers’ capacity and open up market opportunity, but it does not guarantee a lift in bargaining power. Cultivating highquality product may add value to final product and benefit environment, yet farmers need to be linked to high-end market and pass quality guarantee system. Product processing helps diversifying market risk, but whether or not the value added will be returned to farmers is questionable. Developing business model for an area depends on several factors including readiness of community and requirements of each model. We assert the “four essential principles” that need to be embedded and nurtured in upland agricultural business. These are: 1) give high returns per unit area 2) reduce risk 3) strengthen farmers and community and 4) set explicit conditions to improve environment. We offer various means that business and farmers may choose to adopt so as to deliver results according to each principle