Economic Concepts Related to Appraisal II. Outline What is meant by economics Sustainable...
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Economic Concepts Related to Appraisal II. Outline What is meant by economics Sustainable agriculture What are the basic issues related to appraisal Example
Outline What is meant by economics Sustainable agriculture What
are the basic issues related to appraisal Example of soil
erosion
Slide 3
Economics of Sustainability Economics It is not the study of
money, it is the study of scarce resources Microeconomics is the
study of the firm or individual Macros economics is the study at
the societal level
Slide 4
Economics of Sustainability Some of the costs and/or benefits
are pecuniary while others are non-pecuniary In addition, some of
the costs and/or benefits do not fall to the ones who create them
(externalities) When studying economics we are trying to see how an
individual or society allocates its scarce resources to achieve its
goals
Slide 5
Sustainable Agriculture: What Does it Mean The appropriate use
of crop and livestock systems and agricultural inputs supporting
those activities which maintain economic and social viability while
preserving the high productivity and quality of Iowas land. not a
concretely defined set of management strategies and technology, but
an approach which targets the enhancement of natural processes
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Economics of Sustainable Agriculture 1.Profit 2.Ability to
generate an income 3.Risk 4.Labor use including timeliness,
quality, and trade- offs 5.Energy use
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Economics of Sustainable Agriculture 6.Environmental Quality
7.Impact on rural communities 8.Impact of food supply including
safety and cost 9.Structure of agriculture 10.Efficient and
effective use of resources
Slide 8
Appraisal Issues 1.Valuing benefits and costs 1.Externalities
2.Non-market goods and services 3.Common property 4.Resource
depletion 2.Resource Distribution 3.Time 4.Changes in technology
5.Changes in preferences
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Erosion Class None or Slight More than 7 inches of A or A plus
E Horizon Moderately Eroded 3-7 inches Severely Eroded Less than 3
inches Overwash 8-18 inches of recently deposited material above A
Horizon
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WATER EROSION WINNESHIEK COUNTY (LOOKING RIGHT AT HARVEST)
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WATER EROSION CHICKASAW COUNTY
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WATER EROSION WINNESHIEK COUNTY (LOOKING CENTER)
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WATER EROSION BUTLER COUNTY
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WIND EROSION BUTLER COUNTY
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BREMER COUNTY 1999
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BREMER COUNTY 1999
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PESTICIDES, NUTRIENTS AND SEDIMENT WHERE DO THEY GO?
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ROOT RIVER AFTER 2 RAIN THE MISSISSIPPI RIVER
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SOURCE: NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION POINT
WHERE THE WATERS OF THE MISSISSIPPI RIVER MEET THE WATERS OF THE
GULF OF MEXICO
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AGRICULTURE AND HYPOXIA HYPOXIA = LOW OXYGEN < 2 PPM OXYGEN
WILL NOT SUPPORT FISH AND OTHER AQUATIC LIFE NUTRIENT ENRICHMENT
FROM FERTILIZERS AND EROSION (SEDIMENTS) ARE MAJOR CAUSES OF
HYPOXIA THE CORN BELT IS A PRIMARY SOURCE FOR NUTRIENT
ENRICHMENT
Slide 22
HYPOXIC ZONE IN THE GULF OF MEXICO DECEMBER, 2007 SOURCE:
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION
Slide 23
Erosion Cost Categories Individual farmer Fertility loss
Reshaping of field landscape Loss of organic matter Society Water
quality, recreation, navigation, drinking water, etc. Land owner
Decrease in value of the land
Slide 24
External Costs Cost of erosion estimates range from $19 to
$6.20 per ton In the Corn Belt there was 3.9 T/acre water erosion
and.2 T/acre wind erosion Range from $77.90 to $25.42 per cropland
acre in the Corn Belt Tegtmeier/Duffy estimates from $14.09 to
$45.68 for all external costs USDA average for soil $25.42 versus
total $29.89
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Erosion Do farmers take erosion into account when making their
decisions? Do land buyers/renters consider erosion level when
acquiring land?