Doctoral Dissertations

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Alternative methodological approaches to natural resource policy analysis: an illustration of an institutional approach to land use policy analysis
Luzar, E. Jane (Virginia Polytechnic Institute and State University, 1986)
Policy economists are increasingly called upon to participate in the institutional design of natural resource policies, predict interpret impacts of alternative the direction of future policy policies, and formulations. However, many of the forces influential in the current reformulation of these policies extend beyond the exchange oriented scope of the traditional mainstream methodological perspective of contemporary economics. In particular, the inability of mainstream economics to analytically incorporate concepts of institutional change, as well as the analytical limitations imposed by its predictive epistemological basis suggest the need for an alternative analytical framework for use in policy analysis. This study explores the potential contribution of an alternative, institutional approach to policy analysis. Certain properties of the institutional approach identified in this study, including its nonpredictive epistemological orientation, focus on institutions as the unit of observation, reliance on behavioral analysis, and ability to incorporate a wider array of disciplinary perspectives are evaluated with respect to their contribution to policy analysis. The primary analytical technique of institutional economics, development of a pattern model, is analyzed in some detail and compared with traditional mainstream analytics. An illustration of an institutional approach to policy analysis is developed to examine policy considerations raised by the farmland retention issue. A pattern model is constructed to provide the framework for the institutional analysis. Primary components of the model, the policy environment and the actors within that environment, structure the qualitative and quantitative analysis. The pattern model is designed to increase policy economists' understanding of issues fundamental to the development of natural resource policies, e.g., Why is a particular policy chosen from the menu of possible policy options?, What motivates individuals to participate in a policy?, What is the process underlying policy formulation?, and, What is the institutional evolution of a policy? The conclusions to the study are two-part: first, conclusions and policy recommendations are offered for the specific case of the farmland retention issue. Second, for the more general case of natural resource policy analysis, an evaluation of the potential analytical contributions of an institutional approach or a blend of approaches is offered.
An analysis of seasonal home development and its fiscal impacts on local government
Karmokolias, Yannis (Virginia Polytechnic Institute and State University, 1975)
This study is designed to meet the following interrelated objectives: (1) To determine the socioeconomic characteristics of vacation home owners, (2) to determine the characteristics of vacation properties, (3) to ascertain the patterns of use of vacation homes, (4) to establish which governmental services are used by vacation home owners and (5) to measure the net fiscal impact of vacation home development on the local government. The County of Franklin, Virginia was used as a case study area, Information on owner and vacation home characteristics, use of the homes, and use of services was primarily obtained through a questionnaire survey, while information on county revenues and expenditures was obtained from county records. The net fiscal impact was measured as the difference between estimated revenues associated with vacation home owners accruing to the county government and estimated county expenditures incurred in order to provide vacation home owners with governmental services. The number of vacation homes in Franklin County has grown rapidly in recent years, primarily because of the creation of a large man-made lake, part of which lies within the county. Accordingly, sizeable population shifts have been occurring in the county on a seasonal basis which have been affecting the social, economic and ecological structure of the area. Most vacation home owners in Franklin County are middle aged, in white collar occupations, have attained a high level of education and are comparatively wealthy. Vacation homes are recently constructed, relatively large, of contemporary design structures equipped with most modern conveniences and located very near the lakeshore. They are used an average of slightly more than two months per year, mostly during the summer, for relaxation and for water oriented recreational activities. Seasonal residents, due to their intermittent pattern of residency in Franklin County, use only part of the total county services available to permanent residents. Many seasonal residents are dissatisfied with the quality of services they receive. In view of the vulnerability of seasonal homes and the rather high incidence of break-ins inflicted upon them, vacation home owners are particularly concerned with the quality of police protection. Furthermore, they complain, among other things, of inadequate fire protection facilities and of the lack of land and water use planning. Estimated county revenues exceeded estimated county expenditures for services associated with vacation home owners during fiscal year 1972. However, the growing demand by vacation home owners for more and better services will probably result in substantial county expenditures in the future. Total expenditures associated with seasonal residents will probably approach, if not exceed, county revenues generated by seasonal residents.
An analysis of sources of growth in French agriculture 1960-1984
Bouchet, Frederic C. (Virginia Polytechnic Institute and State University, 1987)
Agricultural production in France has increased considerably since the late fifties, turning France into a net exporter in world markets. This has generated a heated policy debate between France and the United States, centering around different views of the sources of growth in French agricultural production between 1960 and 1984. To shed some light on this debate, these sources of growth were analyzed. A sectoral model of the French agricultural sector is developed. It is based on the assumption of profit maximization. Duality theory is used to derive short- and long-run output supply and input demand equations. All variables controlled by the decision-maker are endogenized. These include output supplies (cereals, other crop products, milk, other animal products), use of variable inputs (feeds, fertilizer-energy, hired labor), and optimal quantities of the quasi-fixed factors (family labor, capital). The data used in estimation comes from published sources, except for series concerning French agricultural research expenditures, preferential credit rates, and agricultural labor. These were collected from unpublished sources specifically for the study. In general, signs of estimated coefficients conform to theoretical expectations. Technological change is estimated to have played the major role in inducing production growth. Technology-led increases are attributed mostly to French research expenditures in the case of cereals, and, in the case of milk, both to French research expenditures and to transfers of technology. Credit policies have also played a role, being responsible for an estimated 8.6 and 10.4 percent of the growth in cereals and milk production. These results have important policy implications. First, if rapid technological gains have brought France into a situation of comparative advantage, we should expect to see French policy-makers shift toward a freer market stance in trade negotiations. Second, because of massive technology transfers and shrinking export markets, the problem of protection of national research is likely to become a part of trade policy debates. Third, even if international negotiations succeeded at reducing price supports, such steps could be quickly outweighed by continual outward shifts of the supply curves if efforts to develop agricultural technology are pursued.
An analysis of the effects of institutional, biological and economic forces on the Virginia oyster fishery
March, Richard Alan (Virginia Polytechnic Institute and State University, 1986)
The Virginia oyster industry changed markedly in the period between 1950 and the present. This change has been the result of a variety of forces which can be conveniently classified as economic, biological and institutional. In general, biological forces initiated a series of changes in the fishery which have had economic impacts and impacts on the institutional structure of the fishery. The biological forces have had a much more severe impact on the seed-planting, or private grounds, sector than on the public grounds sector. The dependence of the seed planting sector on public seed beds and the different regulatory regimes applicable to the public and private grounds makes it difficult to draw firm conclusions on the relative merits of alternative tenure structures. The magnitudes of economic, biological and public policy forces as contributing factors to the decline of the oyster fishery are estimated and it is concluded that the biological forces have played the dominant role in the decline of the Virginia oyster fishery. It is suggested that attention be focused on the physical and management inputs to the production of oysters and on methods for bringing forth an appropriate resource mix. It is argued that either a predominantly private grounds fishery, a predominantly public grounds ‘' fishery, with appropriate institutional modifications to allow efficient harvest technologies to be used without threatening the viability of the resource base, or a mixed tenure system could be used and with appropriate management could result in substantial revitalization of the Virginia oyster industry. However, because of the biological changes which have occurred, management, whether public or private, takes on a much more important role in determining the future of the Virginia oyster fishery.
An analysis of the relationship between sectoral activity, diversification, and structural change in the economy
Basu, Rathin (Virginia Tech, 1990-04-03)
The purpose of this study is to analyse the changes, if any, that take place in regional economic structures in the process of diversification, and the roles of sectors in such changes. Input-Output and Structural Path Analysis are used to develop indices that may be used for carrying out the analysis of these issues. A method is also developed for examining the role of linkages with respect to the fundamental structure of production outlined by Simpson and Tsukui. Using these indices and methods, the economic relationships between sectors and the economic structures of six planning districts in Virginia, in addition to the economies of the state of Virginia and the U.S. are analysed and compared. On the basis of these analyses, it is concluded that: (a) The feature of bloc independence found at the level of first order transactions in an economy is diluted at the level of higher order transactions in the metals bloc. However it persists strongly at higher levels of transactions in the nonmetals bloc. (b) The sectors of the metals, nonmetals and services blocs show a proportionate development of linkages irrespective of the degree of diversification of the economy. (c) Contrary to Hirschman's suggestion that complexity of linkages increases with diversification, the results suggest that diversification leads to less complexity in the linkage relationships. (d) The linkages of the agricultural sectors in Virginia are biased towards the services sectors. In the case of the agricultural sectors at the national level, the linkages are biased primarily towards the manufacturing sectors. The implications of these findings for development policy are discussed.
A case study of investment in agricultural sustainability: adoption and policy issues for nitrogen pollution control in the Chesapeake Bay drainage
Norris, Patricia E. (Virginia Polytechnic Institute and State University, 1988)
Nutrient loadings to the Chesapeake Bay are a source of concern for water quality agencies. In particular, excess nitrogen loadings from agricultural production activities threaten water quality in the Bay. Questions have been raised about how effectively traditional BMPs can control nitrogen loss from crop production. This study examines agricultural nitrogen pollution control from an input management perspective. Using an economic and physical model, seven production systems and nitrogen management strategies are compared in terms of input use, profitability, and nitrogen loss potential. Results suggest that several of the production systems will reduce residual nitrogen without reducing profits. However, it is recognized that factors in addition to profitability will influence producers' nitrogen management decisions. Therefore, using the results of a farmer survey, adoption models are estimated to examine the impact of production system characteristics and producer characteristics on the decision to use an alternative production system and nitrogen management strategy. Finally, a sensitivity analysis is conducted to examine the impact of alternative policy tools on adoption incentives. Both financial incentives and education and information programs are found to be important tools for influencing producers' decisions. Producers' interest in the alternative systems and desire for information on the systems suggest that agricultural research will contribute by assuring that producers have access to adequate information on the alternative systems.
Commodity price stabilization and trade liberalization: the case of corn and livestock in the Phillippines
Perez, Nicostrato D. (Virginia Tech, 1995)
This study was conducted to analyze the impacts of different trade and pricing policies on the grains and livestock sector in the Philippines. Four trade policy alternatives were evaluated: (a) base 1990 trade policies; (b) full trade liberalization in the grains and livestock sector: (c) a uniform 20 percent import tariff system for both grains and livestock commodities; and (d) price stabilization of rice and corn. Two price stabilization instruments, buffer-stock and variable import levy, two target prices, and two price band band widths were evaluated. The economic surplus measure of costs and benefits was used as the basis for economic efficiency comparisons among the different trade and pricing policies. The study simulated the operations of grains and livestock markets in the Philippines. Supply and risk response parameters were estimated with profit function approach using time-series data on prices, production, and input usage. Food demand elasticities were adopted from previous works in the Philippines. A separate set of demand functions were estimated for corn as livestock feed with the use of pseudo-data generated by varying the prices of the different feed ingredients in a process model of least-cost feed rations of hog and poultry. The ten-year period simulations were iterated 250 times, using world prices of wheat, rice, and corn drawn from their historical price distributions along the trend projected by the World Bank. Results of the study revealed that most economic gains can be attained by shifting to full trade liberalization of grains and livestock markets. With full trade liberalization, the economy gains by importing lower priced corn and producing higher-valued livestock products for domestic consumption and exports. The effect of a uniform 20 percent tariff is similar to that of full trade liberalization, but with lesser economic benefits. On the other hand, due to positive supply response to stabilized prices, there are small economic gains that could be achieved by the operation of a stabilization scheme for rice and corn over trade liberalization. These benefits, however, are offset by the heavy financial exposure required from the government. The variable import levy that defends rice and com prices at average expected world prices gives the best results among the different price-stabilization schemes.
A comparative study of rural Virginia farm and non farm household labor supply
Mwachofi, Ari K. (Virginia Tech, 1995-07-05)
This study compares rural Virginia two-adult farm and non-farm household labor supply on two levels: (1) labor market participation and (2) variations in labor supply to the market and to the home. The study develops three models: a selection model, a wage rate model, and a labor supply model. Estimation is performed with data collected from rural Virginia by the Virginia Agricultural Statistical Service in 1989 and by North American Research in 1990. The estimates of the selection equations indicate significant differences in the effects of human capital and unearned income on labor market and wage employment participation of rural Virginia farm and non-farm households.
A comparison of optimum grain hedging strategies using commodity options and futures contracts: an application of portfolio theory
Johnson, Larry A. (Virginia Polytechnic Institute and State University, 1986)
Commodity options add a new dimension to grain farmers’ marketing alternatives. Producers of pain can now effectively ensure themselves a floor price without the risk of production shortfalls resulting in losses due to overhedged positions. The purpose of this study was to determine optimum hedge levels using both commodity options and futures contracts and then compare the hedging tools given various location, crop mix, and levels of financial leverage. The study used portfolio theory where hedging strategies were simulated over time and minimum-variance hedge levels determined. Crop diversification and financial leverage were addressed using Quadratic Programming techniques. Selected strategies were tested over a new data set. Commodity options are superior to futures contracts as a hedging tool for early season hedges. This was particularly true for crops with highly variable yields. The results also indicate that commodity options are a viable alternative for reducing long-run income variation and that crop diversification reduced income variation but did not reduce the overall need to hedge. The study presented here is unique in a number of ways. Initially, very little if any published work is available on hedging pain with commodity options contracts. Secondly, the study addresses hedging strategies under the realm of production uncertainty. Finally, the study demonstrates there are E-V efficient alternatives to strict cash sales.
Composition of traders in live cattle futures contracts: behavior and implications to price discovery
Rowsell, John (Virginia Tech, 1991)
The concepts of risk transfer and price discovery are well developed roles for futures markets. The interaction between traders in futures markets in the transferring and acceptance of price risk contributes to the discovery of price. Interaction of traders in the risk transfer and price discovery processes is examined in this dissertation. Data employed were for live cattle futures at the Chicago Mercantile Exchange developed from the confidential daily records of reporting trader positions maintained by the Commodity Futures Trading Commission. The analysis was for the period February 1983 through September 1987. The nearby futures contract price, volume, and open interest series supplement the daily trader position data base.
A computable general equilibrium analysis of regional impacts of macro-shocks in the 1980S
Kraybill, David S. (Virginia Polytechnic Institute and State University, 1988)
The purpose of this study is assess the domestic regional impacts of changes in federal fiscal policies and the nation's trade deficit. An attempt is made to fill a gap in the literature of regional economics by providing an explanation of how economic changes at national and international levels are transmitted to regions, and by providing general-equilibrium estimates of the effects of these changes. The level of regional economic activity is assumed to be linked to the federal budget through federal purchases of goods and services, through intergovernmental transfers, and through net transfers to households. Domestic regions are linked to the balance of trade through shifts in exports and imports and through shifts in net income transfers from abroad. An interregional computable general equilibrium (CGE) model is constructed and calibrated for Virginia and the rest of the United States (ROUS). Scenarios approximating federal fiscal policies and the trade deficit during the period 1981-85 are introduced, and the model is solved to obtain a new equilibrium. As a result of these shocks, it is concluded: (a) that the magnitude of sectoral effects differed in Virginia versus ROUS, (b) that in contrast to non-rural sectors, rural sectors in Virginia experienced slower growth in value added, (c) that investment in Virginia and in ROUS increased in response to the net inflow of savings from abroad, but the increase was mitigated by the rise in federal spending, and (d) that a tariff increase on the output of the apparel and textile industry would increase output in that industry in Virginia but would decrease it in other industries if the economy were fully employed.
Demand for selected classes of convenience food in the United States
Hull, David B. (Virginia Polytechnic Institute and State University, 1982)
The focus of this research was the problem of identifying the economic and demographic factors that determine household expenditure for convenience food in the United States. A major objective was to measure, for various classes of convenience food, the response of expenditures to changes in demand determinants so that food expenditure profiles can be simulated for households with different characteristics and constraints. Another major objective was to determine the effect of the meal preparer's value of time on household use of convenience food. The work of others on similar models of food demand has been extended to include analysis of the effects of the sex and employment status (market-orientation) of the meal preparer, the value of the meal preparer's time, household size, income and age-sex composition. Other factors in the models include region, race, urban setting and season. The functions were specified from a theoretical model developed from the theory of the household production function. Foods used by households as reported in the 1977-78 Nationwide Food Consumption Survey were divided into classes of nonconvenience, basic convenience, complex convenience and manufactured convenience food. Nonconvenience foods are raw, unprocessed foods or ingredient foods. Basic convenience foods are single ingredient foods with limited culinary expertise embodied, usually providing a type of preservation convenience. Complex convenience foods are multiple ingredients, highly prepared foods. Manufactured convenience foods include products which have no home prepared counterpart. For the three convenience classes, nonincome-earning female meal preparers all had positive elasticities of the value of time. Except for the basic convenience food model, the income-earning female meal preparers had positive value of time elasticities. The nonmarketoriented female meal preparers had negative elasticities of value of time in the nonconvenience class. The income elasticity for all food classes ranged from 0. 03in the nonconvenience food expenditure model to 0.08 in the complex convenience food model. The significance of statistical tests on the range of income elasticities verifies that the food categories investigated are neither inferior nor luxury goods, and that demand models for all food at home that ignore the effects of the value of time would overestimate the elasticity of expenditure with respect to income.
Demand for water resources information: a conceptual framework and empirical investigation
Osborn, Carl T. (Virginia Polytechnic Institute and State University, 1986)
This study develops and presents a conceptual framework which builds upon and extends the economics of information literature. Combining observations which emerge from a review of literature concerning organizational decision processes, this framework considers the nature of the demand and value for water resource information by individuals who participate in the decision making process found within public water management organizations. Based upon this conceptual framework the paper reports the results of an empirical model relating decision participant use of the Water Resource Council' s Second National Water Assessment and hypothetical expenditures on "national assessment type information" to personal and agency characteristics in two water basin management situations; instream versus offstream water use competition in the Missouri River basin, and low freshwater inflows to Chesapeake Bay. In addition, results of a contingent ranking investigation designed to estimate marginal water information values are presented and the potential use of the contingent ranking method by agencies in water data collection discussed. Results of the investigations indicate that previous use of specific water information products and the level of expenditures made on certain types of water information are influenced by personal and organizational characteristics. Consequently, there can exist no "correct" information system and thus no "correct" data collection plan in the absence of knowledge concerning information value. Moreover, results indicate that contingent ranking procedures involving items of information may be successfully conducted in a mail survey format and that the information value estimates derived through this technique can be employed to promote greater efficiency in water data investment.
Demand, supply and price of hardwood lumber: an econometric study
Luppold, William G. (Virginia Polytechnic Institute and State University, 1981)
Historically, the quantity of hardwood lumber supplied and demanded has fluctuated from year to year while the price of hardwood lumber has trended with the wholesale price index. During the 1970's, production and usage of hardwood lumber trended downward while price increased by over 100 percent. The series of events which occurred during the 1970's, caused industrial users of hardwood lumber to express concern over current and future availability and price of higher grade lumber. Currently, little economic information is available which can explain the behavior of the hardwood lumber market. Furthermore, the lack of such information inhibits the optimal allocation of capital, labor and other resources employed by producers and users of hardwood lumber. The general objective of this study was to provide economic information concerning the production, usage and price of hardwood lumber. Three specific objectives were undertaken in this study: (1) To identify factors affecting hardwood lumber production usage and price, and to measure the impacts of changes in these factors; (2) To identify factors affecting wood furniture manufacturers' demands for hardwood lumber of various species, and to measure the impacts of changes in these factors; and (3) To predict future production, usage and price of hardwood lumber under four different scenarios. Major implications resulting from fulfillment of the first objective were that wage rates and price of output of lumber demanders are the most influential factors in the production and usage of hardwood lumber. Exports of domestically produced lumber were found to influence hardwood lumber price, however, the long-run affects of a change in exports is smaller than the short-run affects. The price of hardwood stumpage was also found to affect the production, usage and price of hardwood lumber; but, the magnitude which stumpage price affects the hardwood lumber market is small when compared to the affects of wage rates and output prices. A major implication of the analysis of wood furniture manufacturers lumber demands was that these manufacturers have a very inelastic demand for lumber as a whole but, their demands for lumber of individual species are much more price elastic. Demand for open grained lumber such as oak and hickory appeared to be more price elastic than the demand for closed grained lumber such as cherry and mahogany. One exception to this rule was the demand for maple lumber which appears to be more price elastic than the demand for any other lumber. Projections revealed little change in production and usage hardwood lumber relative to traditional levels, if the moderate inflation which existed during the mid 1960's and early 1970's is experienced over the next 25 years. Projections also indicate that lumber production and usage will decrease by 50 percent, if the high rate of inflation experienced in 1980 continues over the next 25 years.
A dynamic analysis of the crop productivity impacts of soil erosion: an application to the Piedmont area of Virginia
Segarra, Eduardo (Virginia Polytechnic Institute and State University, 1986)
This study was born out of the desire to analyze the complex soil management problem faced by individual economic agents as well as society. The focus of this study, however, was on the theoretical formulation and estimation of partial equilibrium dynamic economic models directed toward optimizing the private use of the soil resource. In particular, four empirical representative farm models were formulated. Solutions to the four representative farm models showed that sizable reductions in topsoil loss, which contributes to non-point source pollution, and aggravates the crop productivity impacts of soil erosion, can be accomplished by adopting alternative support practices. Because of the change in support practices, reductions in the present value of net returns are expected, but this decrease in return was found to be minimal when compared to reductions in topsoil loss. Policy implications as well as several policy recommendations stemming from those results, with respect to soil conservation, are outlined and analyzed.
An ecologic-economic perspective for coastal zone management
Conopask, Jeff Virgil (Virginia Tech, 1975-08-31)
The issue of land resource management has recently taken on meaning not previously associated with the term. Federal, state and local governments as well as highly organized public and private groups have identified land resource management as a critical issue of this decade. Many existing private and public institutions are being challenged and new institutional arrangements are being forged to deal with land resource management issues. One of the most commonly recognized critical land management areas is the narrow band of land and water known as the coastal zone. Although regional studies have dealt with one or more of these problem areas in the past, the intensive multiple use of this particular geographic area has focused attention on it from a multiple disciplinary vantage point. This study attempted to demonstrate the usefulness of economic-ecological analysis in seeking solutions to the allocation of coastal zone resources to alternative uses.
An econometric study on the market structures of the world demand for high protein meals, with special emphasis upon the United States soybean economy
Huang, Chung-liang (Virginia Polytechnic Institute and State University, 1976)
This study obtains parameter estimates relating to the United States and foreign demand for high protein meals during the period 1955-1972. The world economy of high protein meals was formulated in a theoretical framework which provided a basis for the statistical estimation. The core of the analysis is a simultaneous equation model composed of eight linear stochastic behavioral relations and four linear identities. The three-stage least squares procedure was employed to estimate the unknown structural parameters of the statistical model. The statistical analyses of this study contribute to the quantification of demand interrelationships between soybean meal and other high protein meals, and to the demand relationships between the United States and foreign markets. Elasticity measures were computed from the estimated structural coefficients. The results of the present study suggest that domestic, as well as foreign demand, for soybean meal during the 1955-72 period were price inelastic. In addition, this study suggests that demand for soybean meal has become more elastic in the recent years. A technical complementary relationship was found between corn and other high protein meals in the United States. Soybean and other high protein meals appeared to be very close substitutes as livestock feeds both in the United States and foreign markets. Furthermore, the study indicates that both export and import demands for protein meals were price inelastic. Particularly, the United States demand for imports of other high protein meals which was estimated to be highly price elastic. Derived reduced forms were computed from three-stage least squares structural parameters. The unrestricted least squares reduced forms were estimated using ordinary least squares procedure. Effects of a specific change in the predetermined variables on all the jointly determined variables were examined using the three-stage least squares reduced form. The price of corn and animal units was found to have a great impact on the consumption of high protein meals. Economic forecasting was evaluated and performed on the basis of the reduced form equations, using both derived reduced form equations and ordinary least squares estimated reduced form equations. When compared with actual values, within the sample period, ordinary least squares estimated reduced form equations tend to be superior than reduced form equations computed from three-stage least squares structural coefficients. Nevertheless, comparison of the two methods in forecasting test using observations for 1973 and parameters estimated from observations for the period 1955-72 was inconclusive. Finally, this study suggests that a structural change might have occurred in recent years.
An economic analysis of low-input agriculture as a groundwater protection strategy
Diebel, Penelope L. (Virginia Tech, 1990-10-15)
The unique characteristics of agricultural contamination of groundwater requires an innovative solution, such as the voluntary use of low-input agriculture (LIA) practices. This study was conducted to identify potential barriers to LIA adoption, analyze the effectiveness of agriculture and natural resource policies designed to remove the barriers to LIA adoption, and to determine the effectiveness of LIA practices in reducing the amount of chemicals released into the environment. A survey of Richmond County, Virginia farming operations and attitudes identified current practices, potential LIA practices for the Northern Neck region of Virginia, and perceived barriers to LIA adoption. A 15 year nonlinear mathematical programming model was used to determine optimal farming practices, among 34 low-input and conventional practices, under various agronomic and policy scenarios. Two non-point simulation models, CREAMS and GLEAMS, were used to estimate the nitrogen and chemical loadings of runoff, groundwater, and sediment; and the soil erosion from each of these scenarios. The model shows that yields, labor requirements, and variable costs, individually have a weak influence on the adoption of low-chemical and organic production activities. The price of the organic nitrogen source, poultry litter, was strongly related to the use of LIA practices. The most cost effective policy for reducing Aatrex (atrazine) contributions to groundwater was a one-third reduction in surface application of Aatrex. However, there were many tradeoffs between chemical, nitrogen, and soil contributions to runoff, percolation, and sediment. The only policies which reduced all of these factors were land retirement policies. The tax level required to promote the use of a LIA practice was too high to be politically feasible, and the use of green-manure crops would require a 100 percent annual subsidy of those crops. A proposed base flexibility program caused more intensive use of conventional chemicals because of the limited number of eligible crops. Low-input agriculture has promised reductions in chemical contamination of groundwater and runoff. This study’s results showed that although that is indeed the case, there are tradeoffs between reduced chemical contamination and nitrogen and soil losses which should be considered when examining the cost effectiveness of using LIA practices as a groundwater protection strategy.
An economic analysis of nitrogen fertilization regimes in Virginia
Maiga, Alpha S. (Virginia Tech, 1992-09-15)
The loss of nitrogen from agricultural land to ground and surface waters is currently a major concern in the Commonwealth of Virginia. Farmers use nutrients on plants to maximize profit from the selling of a crop. For them losses of nutrients through inappropriate nutrient application are undesirable. Thus more effective nutrient management is beneficial for both the farmers and the remainder of society. Achieving environmental quality goals while taking into account farmers' income risk is essential when making fertilization recommendations. This study on Richmond county, uses the EPIC model and stochastic dominance analysis to compare four different fertilization regimes at the field and farm level; and then uses a sensitivity analysis to examine how the ranking of different regimes are affected by changes in crop prices. Results suggest that regime 4 which is the EPIC automatic fertilization regime has a better performance than the other regimes. However potential costs not accounted by EPIC involved at the farm level when using regime 4 may negatively affect its adoption by farmers. Thus further studies need to be done to understand and assess the performance of regime 4. The results do not show any significant difference between farm and soil type levels of analysis. The sensitivity analysis mainly affects the less risk averse decision makers, and change only the ranking of the three fertilizer regimes specified by the researcher as opposed to the automatic fertilizer option of EPIC.
An economic analysis of the impact of alternative government peanut programs on program costs and the farm production sector of the Virginia-North Carolina peanut industry
Little, Thomas William (Virginia Polytechnic Institute and State University, 1973)
Developing estimates of the impact which three alternatives to the 1971 Peanut Program would have on peanut production, on the distribution of benefits of alternative government farm programs, on the income of the area's peanut farms, on the income of producers classed by farm size and tenure groups, and on losses incurred by the government in conducting peanut price support activities were major objectives in this analysis. During the decade 1961-71, the annual cost of the peanut price support program increased from $12.1 to $97 million. This increase plus the prospect for substantial increases in the annual cost of the program has created pressure for program modification or change, and concern about the economic impact of program modifications. In this study an acreage reduction program, a voluntary certificate plan, and a two-price plan were analyzed. The analysis was conducted employing intraregional programming models containing separable programming algorithms to regulate structural adjustments and the movement of resources among 12 farm size and tenure groups identified in each model. The objectives were achieved. Results of this analysis support the hypothesis that differences in peanut program alternatives being evaluated would influence peanut production, program costs, and the income of peanut farmers in the Virginia-North Carolina area. They indicate that the volume of peanuts coming to market under alternative peanut programs could range from 50 percent with a voluntary certificate plan to 137 percent with a two-price plan. The estimated volume of peanuts which would be produced under provisions of the 1971 Peanut Program was 700 million pounds. Results also show that the selection of a peanut program could reduce labor requirements of area farms by 6 percent or increase the needed labor force by 4 percent. They further indicate that program selection could cause a variation in gross receipts of $22 million and a variation in receipts from peanuts of $43 million. Production, employment, and farm income could be increased with the implementation of the two-price plan without increasing government costs if government losses per pound of peanuts acquired by CCC under the target price provision did not exceed $.03 per pound, and production estimates made for the domestic crop did not change significantly. Estimates of government costs indicate that support of the price of peanuts for the domestic edible market at the 1971 price of $.14 per pound, plus a target price of $.10 per pound for peanuts for crushing and the world market, would not result in government costs greater than the estimated cost of the 1971 Peanut Program as long as the price of peanuts for crushing and the world market was greater than $.07 per pound. In periods of strong demand results indicate that the cost of this program option would be nominal, and in periods of depression in the domestic crushing and world markets the cost of the program would be significant, Estimates of government costs for each crushing and world market price evaluated ranged from $9 to $161 millions. Results indicate that without a domestic price support for peanuts produced for crushing and the world market, wide fluctuations in returns would develop under the two-price plan, fluctuations which could reduce returns to levels substantially below these experienced under the 1971 Peanut Program. Results also show that program selection would not appreciably alter the distribution of program benefits, that each alternative analyzed would result in lower returns to the fixed factors of landlords, that program selection would influence agribusinesses supplying production items to area peanut farmers, and that peanut shellers and processors would be affected by program selection. Statistics providing more detailed information on the impact which the two-price plan would have are provided in the text, and a similar set of values are incorporated to show the impact which a voluntary certificate plan and an acreage reduction program would have on production, farm income, and government costs.

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