Spotlight on Economics: A Changing Paradigm for Conservation Decisions
By Cheryl Wachenheim, Professor
NDSU Department of Agribusiness and Applied Economics
I was ready for the farmer’s quizzical look when I asked why he had pulled out the shelterbelts on his farm. I was ready because others before him also expressed surprise that it was not self-evident to me.
They told me that branches from the trees require a machinery operator to stop and remove them; that current spacing between shelterbelts does not accommodate the increased size of farm machinery and equipment; that their presence can make aerial spraying difficult; that shelterbelts require maintenance, including weed control; that shelterbelts can result in wet areas in adjacent fields because they trap snow and shade the soil; and that the trees and other vegetation take water resources from adjacent fields.
Some of these factors are more important to some farmers than others I have been interviewing in the Prairie Pothole region. Those factors mentioned by an individual farmer and the weight assigned to them is influenced by the characteristics of their land, crop rotation used, labor and machinery availability, growing season days and agricultural practices, among others.
The frequency of mention of the noted factors surprised me. As an economist, I expected one dominant reason that farmers removed shelterbelts was because they take increasingly valuable land out of production. While some farmers mentioned this lost revenue, many did not or did not assign to it the level of importance that I expected.
However, reflecting on their responses, it became clear that the farmers interviewed are, in fact, using economic criteria in their decision rather than what initially appeared to be convenience factors. They just did not use the specific economic criterion I expected.
Farmers take seriously additional purchased input costs, such as fuel, labor and crop protection products, associated with maintaining a shelterbelt. As input costs rise, even those formerly considered a necessary cost of doing business require careful consideration. The farmers also reminded me that anything that slows down planting or harvesting is a cost of production because a decrease in the number of available growing degree days can reduce net income.
Also not on my radar was that it is no longer economically viable for some producers to own and maintain the machinery and equipment required to accommodate shelterbelts and their maintenance.
Discussion has not been limited to the cost of shelterbelts. Those who continue to maintain or even plan additional shelterbelts focus on the advantages they provide. Offered were their importance in reducing soil erosion and, hence, maintaining and preserving the productivity of the surrounding land, and reducing the impact of soil erosion on water movement. Other shelterbelt advantages include providing habitat for wildlife and the intangible notion of providing aesthetic value for good will. Some farmers also noted that technology has allowed for the reduction in costs once associated with maintaining shelterbelts and other land areas that are farmed around.
We have long recognized the growing challenges associated with maintaining irregularly shaped or less conveniently located nonfarmed parcels as farm equipment size has grown substantially. Farmers reported that technology increasingly offers them the opportunity to define the cost of using specific inputs on non- or less-productive acres. It also allows for the application of inputs to nonproductive acres with more accuracy and less inconvenience. In other words, precision technology has improved a farmer’s ability to farm around obstacles.
From these recent farmer interviews, I am reminded that farm economics is not just about the number of acres in production and the net revenue expected from each acre. I more fully appreciate that factors affecting farmer decision making about conservation cannot simply be considered those attributed to their preference for convenience. Rather, they generally include important economic considerations.
This has become increasingly true as the technology employed becomes increasingly sophisticated, which allows farmers to better estimate the cost and benefit of individual practices. In fact, technology has changed the very nature of what is included in the decision-making process regarding conservation and influences how a producer estimates the net benefit of conservation practices such as shelterbelts.
If the longer-term net benefit does not warrant continuation of the practice, a farmer dropping the practice is good management, which one would expect to be no different from managers of resources in any number of occupations.
How policy should adjust to the changing nature of farming, including consideration of conservation practices that may no longer be economically viable under current policy, is a normative question and one for society to consider and make collectively.
An advantage of being an economist at a land-grant university is that my job does not include making normative recommendations about conservation or any other agricultural practice.
Rather, my role is to provide context that helps us continue to evaluate the incentives facing our producers under evolving markets, technologies and policies. In this case, it is to point out that economic considerations for farmers considering shelterbelts and other conservation practices have evolved.
Farmers have demonstrated it is time to step back from our long-held understanding about conservation decision making and evaluate farmer decisions as they are made.
NDSU Agriculture Communication – June 3, 2013
|Source:||Cheryl Wachenheim, (701) 231-7452, email@example.com|
|Editor:||Rich Mattern, (701) 231-6136, firstname.lastname@example.org|