Green Technologies for a More Sustainable Agriculture

For U.S. agriculture to continue along a sustainable path of economic development, further production increases must be generated by technologies that are both profitable and more environmentally benign. In this context, we assess the role of these green or sustainable technologies in steering agriculture along a more sustainable path. However, the lack of markets for the environmental attributes associated with green technologies can limit their development. In addition, simply making a technology available does not mean it will be adopted. Experience with green technologies such as conservation tillage, integrated pest management, enhanced nutrient management, and precision agriculture demonstrates that even when technologies are profitable, barriers to adopting new practices can limit their effectiveness.sustainable agriculture, natural capital, nonrenewable resources, renewable resources, environmental services, green technology, integrated pest management, conservation tillage, enhanced nutrient management, precision agriculture, Environmental Economics and Policy, Farm Management,

FARM MACHINERY INVESTMENT AND THE TAX REFORM ACT OF 1986

The Tax Reform Act of 1986 significantly changed incentives for investing. This analysis specifically examines how changes in marginal tax rates, depreciation schedules, and the investment tax credit altered the cost of capital and net investment in agriculture. A stochastic coefficients econometric methodology is used to estimate an investment function which is then used to simulate the effects of tax reform. Estimates indicated that relative to prior law, the Tax Reform Act will reduce the capital stock of farm machinery and equipment by nearly $4 billion.Agricultural Finance, Farm Management,

AGRICULTURE IN AN ECOSYSTEMS FRAMEWORK

By broadening the definition of an ecosystem to include economic activities, can we better characterize the interactions and relationships among agricultural activities and important indicators of ecological system health? This paper addresses research approaches for assessing the role of agriculture in an ecosystems context. Environmental regulation and resource management policies have heightened the interest in understanding interactions among agricultural activities and the natural resource base, including the impacts of agriculture on environmental quality and the impacts on agriculture of ecosystem restoration efforts. What are the most meaningful indicators of environmental quality? Which agricultural practices and policies should be considered, along with which nonagricultural resource uses? Finally, does the evolving thinking about ecosystems permit us to link agricultural practices and policies more directly and meaningfully to conceptions of sustainability, of both natural and socioeconomic systems? This paper presents a brief synopsis of ecosystem management, drawing from several recent governmental initiatives. It then provides an overview of the economics of ecosystem management from the perspective of the role of agriculture; discusses two specific cases, the Pacific Northwest and South Florida; and concludes with a discussion of promising economic approaches, data needs, and caveats to those engaged in policy analysis involving ecosystem restoration.Environmental Economics and Policy,

Measuring Implicit Rental Rates for Farm Capital

Developing implicit rental rates for capital inputs is an Important step in understanding the Impact of tax law changes on agricultural investments This article develops a methodology for estimating implicit rental rates and presents annual estimates of rental rates for seven categories of farm equipment and structures from 1955 to 1979 This article also compares these rental rates With those estimated under a no-tax alternative The author developed a method for estimating marginal Federal Income tax rates for farm sole proprietorship

Ethanol in Agriculture and the Environment

The use of ethanol, or grain alcohol, a potential alternative highoctane fuel source, could help the United States reach three major policy goals: improved environmental quality, enhanced energy security, and stabilized farm income (see box, "Ethanol as a Fuel"). Recent events have refocused public attention to ethanol's role in these policy goals. Last year, the 1990 Amendments to the Clean Air Act became law, requiring States to meet pollution standards. Ethanol, splash-blended with gasoline (splashblended means it is mixed at the wholesaler), increases the amount of oxygen in gasoline, which reduces carbon monoxide emissions. The blend also reduces emissions of toxic chemicals that are known to cause cancer. Also last year, Iraq's invasion of Kuwait disrupted world oil markets. Ethanol, produced from domestically grown grains, could displace some imported crude oil and refined oil products. Finally, current U.S. budgetary concerns have led policy-makers to reduce Federal support to the agricultural sector. Ethanol creates an additional market for corn, reducing farm commodity program payments. However, splash-blended ethanol has limitations. It increases some volatile organic compounds that are limited under the 1990 Amendments to the Clean Air Act. Also, the quantity of ethanol produced is unlikely to be sufficient to contribute significantly to national energy supplies in the near term. And to produce ethanol requires government tax exemptions to make it competitive with gasoline

The Effects of Interest Rates on Agricultural Machinery Investment

Changes in real interest rates may affect the rate of adjustment of machinery to optimal levels This finding results from the development and application of a theoretically consistent analytical framework for examining agricultural investment 10 machinery Results from duality theory on restricted variable profit functions are incorporated into a longrun dynamic optimization framework where input use is affected by external adjustment cost

AN ANALYTICAL FRAMEWORK FOR EXAMINING INVESTMENT IN AGRICULTURE

A theoretically consistent analytical framework for examining agricultural investment is developed. Results from duality theory on restricted variable profit functions are incorporated into a longrun dynamic optimization framework where input use is affected by external adjustment costs. The complete system allows the calculation of optimal input use, short-, intermediate-, and longrun input demand elasticities, output, profit, and the timepath of input adjustments to optimal levels

U.S. Farm Programs and Agricultural Resources

"What is the effect of U.S. agricultural support programs on land, input use, and production in agriculture?" U.S. agricultural support programs have a greater effect on land and other farm inputs than on commodity production. Commodity programs have Increased land values and encouraged the substitution of other Inputs such as farm chemicals for land. Agricultural support programs raise total farm income, but in their absence, commodity production would decline, prices would rise, and the mix of crops would change as program crop producers shift to other crops