Agriculture and the environment.

The distinctive nature of environmental quality problems in agriculture -- an industry based on the extraction of highly variable natural resources under stochastic conditions -- has important implications for policy design. First, we examine the source of environmental quality problems and the strength of incentives for resource stewardship that may incidentally induce farmers to protect environmental quality. In turn, we examine environmental policy design under two features that are pervasive in agriculture: (1) heterogeneity caused by resource variability and (2) uncertainty. Next, we examine the effects of interactions between agricultural, environmental, and resource policies. Finally, we review important areas for further research.

[1]  M. Mangel,et al.  INFORMATION IN AGRICULTURAL PEST CONTROL , 1986 .

[2]  Robert N. Stavins,et al.  What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading , 1998 .

[3]  D. Bigman.  Safety‐First Criteria and Their Measures of Risk , 1996 .

[4]  E. Lichtenberg,et al.  Insurance, Moral Hazard, and Chemical Use in Agriculture , 1993 .

[5]  David Zilberman,et al.  The Welfare Economics of Price Supports in U.S. Agriculture , 1986 .

[6]  M. Wetzstein,et al.  Regulating agricultural contamination of groundwater through strict liability and negligence legislation , 1992 .

[7]  Glenn Fox,et al.  Damage Control and Increasing Returns , 1995 .

[8]  D. Zilberman,et al.  The Economics of Reentry Regulation of Pesticides , 1993 .

[9]  I. Ehrlich,et al.  Market Insurance, Self-Insurance, and Self-Protection , 1972, Journal of Political Economy.

[10]  E. Lichtenberg.  The Economics of Cosmetic Pesticide Use , 1997 .

[11]  E. Maskin,et al.  On Imperfect Information and Optimal Pollution Control , 1980 .

[12]  Jack Meyer,et al.  Two Moment Decision Models And Expected Utility Maximization: Some Implications For Applied Research , 1988 .

[13]  Bruce A. Babcock,et al.  Value of Weather Information in Market Equilibrium (The) , 1990 .

[14]  D. Hoag,et al.  Farm Production Decisions Under Cross and Conservation Compliance , 1991 .

[15]  L. Calvin,et al.  Distributional Welfare Implications of an Irrigation Water Subsidy , 1986 .

[16]  David Zilberman,et al.  The Effects of Pricing Policies on Water Conservation and Drainage , 1990 .

[17]  G. Norton,et al.  Economics of Decision Making in Pest Management , 1984 .

[18]  Erik Lichtenberg,et al.  Agriculture and Nitrate Concentrations in Maryland Community Water System Wells , 1997 .

[19]  Bengt Holmstrom,et al.  Moral Hazard in Teams , 1982 .

[20]  David Zilberman,et al.  Examination of Environmental Policies Using Production and Pollution Microparameter Distributions , 1978 .

[21]  Robert A. Young,et al.  Assessing Strategies for Control of Irrigation-Induced Salinity in the Upper Colorado River Basin , 1990 .

[22]  R. Just,et al.  Stochastic specification of production functions and economic implications , 1978 .

[23]  Gary D. Lynne,et al.  Attitudes and Farmer Conservation Behavior , 1988 .

[24]  J. Herriges,et al.  The Regulation of Non-Point Sources of Pollution Under Imperfect and Asymmetric Information , 1992 .

[25]  B. Babcock,et al.  Value of Reducing Temporal Input Nonuniformities (The) , 1992 .

[26]  S. Batie,et al.  Virginia Farmers' Soil Conservation Decisions: An Application of Tobit Analysis , 1987, Journal of Agricultural and Applied Economics.

[27]  Craig D. Osteen,et al.  Pesticide regulatory decisions: Production efficiency, equity, and interdependence , 1987 .

[28]  J. Antle.  Testing The Stochastic Structure Of Production: A Flexible Moment-Based Approach , 1983 .

[29]  Gregory M. Perry,et al.  The On-Farm Costs of Reducing Groundwater Pollution , 1991 .

[30]  B. Babcock,et al.  Producer Welfare Consequences of Regulating Chemical Residues on Agricultural Crops: Maleic Hydrazide and Tobacco , 1991 .

[31]  Kenneth E. McConnell,et al.  An Economic Model of Soil Conservation , 1983 .

[32]  L. Danielson,et al.  An Hedonic Study Of The Effects Of Erosion Control And Drainage On Farmland Values , 1989 .

[33]  David Letson,et al.  Point/Nonpoint Source Trading of Pollution Abatement: Choosing the Right Trading Ratio , 1993 .

[34]  D. Zilberman,et al.  Pesticides and Worker Safety , 1992 .

[35]  P. Pingali,et al.  Pesticides and Philippine Rice Farmer Health: A Medical and Economic Analysis , 1994 .

[36]  A. Schmitz,et al.  Preserving Waterfowl Habitat on the Canadian Prairies: Economic Incentives versus Moral Suasion , 1992 .

[37]  A. Plantinga,et al.  The Effect of Agricultural Policies on Land Use and Environmental Quality , 1996 .

[38]  David Zilberman,et al.  A “Putty-Clay” Approach to Aggregation of Production/Pollution Possibilities: An Application in Dairy Waste Control , 1978 .

[39]  D. Zilberman,et al.  Efficient Regulation of Environmental Health Risks , 1988 .

[40]  Rodney B.W. Smith,et al.  Transaction Costs and Agricultural Nonpoint-Source Water Pollution Control Policies , 1995 .

[41]  Gershon Feder,et al.  The impact of uncertainty in a class of objective functions , 1977 .

[42]  L. Booth.  On the theory of the competitive firm under uncertainty , 1978 .

[43]  Public welfare in relation to alternative pesticide policies , 1976 .

[44]  R. Boardman.  Pesticides in World Agriculture , 1986, International Political Economy Series.

[45]  E. Lichtenberg,et al.  RISK-REDUCING AND RISK-INCREASING EFFECTS OF PESTICIDES , 1994 .

[46]  S. A. Starbird.  THE EFFECT OF QUALITY ASSURANCE POLICIES FOR PROCESSING TOMATOES ON THE DEMAND FOR PESTICIDES , 1994 .

[47]  David Zilberman,et al.  The Effects of Well Depth and Land Quality on the Choice of Irrigation Technology , 1986 .

[48]  R. Just,et al.  The Distributional Effects Of Land Controls In Agriculture , 1984 .

[49]  E. Rasmusen.  Moral Hazard in Risk-Averse Teams , 1987 .

[50]  R. Zimmerman,et al.  Farmers' willingness to pay for groundwater protection , 1999 .

[51]  D. Zilberman,et al.  Regulating environmental health risks under uncertainty: Groundwater contamination in California☆ , 1989 .

[52]  Howard D. Leathers,et al.  Interactions between Agricultural and Resource Policy: The Importance of Attitudes toward Risk , 1991 .

[53]  J. W. Dunn,et al.  The Relative Efficiency of Agricultural Source Water Pollution Control Policies , 1986 .

[54]  Jack Meyer,et al.  Deterministic transformations of random variables and the comparative statics of risk , 1989 .

[55]  B. Goodwin,et al.  Crop Insurance, Moral Hazard, and Agricultural Chemical Use , 1996 .

[56]  Two-goal regional environmental policy: The case of the Santa Ana river basin☆ , 1977 .

[57]  D. Bromley,et al.  Environment and Economy: Property Rights and Public Policy , 1991 .

[58]  Jean-Jacques Laffont,et al.  A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm , 1984 .

[59]  Paul V. Preckel,et al.  The Conditional Beta Distribution as a Stochastic Production Function , 1989 .

[60]  Stanley R. Johnson,et al.  Uncertainty and Split Nitrogen Application in Corn Production , 1990 .

[61]  M. Weitzman.  Prices vs. Quantities , 1974 .

[62]  O. R. Burt.  Farm Level Economics of Soil Conservation in the Palouse Area of the Northwest , 1981 .

[63]  Robert N. Stavins,et al.  Correlated Uncertainty and Policy Instrument Choice , 1996 .

[64]  Quirino Paris,et al.  The von Liebig Hypothesis , 1992 .

[65]  R. Zimmerman,et al.  Adverse Health Experiences, Environmental Attitudes, and Pesticide Usage Behavior of Farm Operators , 1999, Risk analysis : an official publication of the Society for Risk Analysis.

[66]  D. Zilberman,et al.  Regulation of Marine Contamination under Environmental Uncertainty: Shellfish Contamination in California , 1987, Marine Resource Economics.

[67]  R. Just,et al.  INTERACTION BETWEEN ENVIRONMENTAL AND AGRICULTURAL POLICIES: OPPORTUNITIES FOR COORDINATION AND LIMITATIONS FOR EVALUATIONt Interactions Between Agricultural and Environmental Policies: A Conceptual Framework , 1990 .

[68]  J. Shogren,et al.  The cost of agricultural production risk , 1995 .

[69]  D. Bromley,et al.  Agricultural pollution: the economics of coordination , 1979 .

[70]  David Zilberman,et al.  The Econometrics of Damage Control: Why Specification Matters , 1986 .

[71]  Brian H. Hurd,et al.  Yield Response and Production Risk: An Analysis of Integrated Pest Management in Cotton , 1994 .

[72]  David Zilberman,et al.  Optimal combination of pollution prevention and abatement policies: The case of agricultural drainage , 1995 .

[73]  L. Hiebert.  Self Insurance, Self Protection and the Theory of the Competitive Firm , 1983 .

[74]  P. Hazell,et al.  Crop Insurance for Agricultural Development: Issues and Experience , 1987 .

[75]  David Zilberman,et al.  Internalization in a stochastic pollution model , 1977 .

[76]  J. Jacobs,et al.  An Economic Analysis of Agricultural Land Use Practices to Control Water Quality , 1974 .

[77]  Bharat Ramaswami,et al.  Supply Response to Agricultural Insurance: Risk Reduction and Moral Hazard Effects , 1993 .

[78]  Bruce A. Babcock,et al.  Evaluation of Soil Test Information in Agricultural Decision Making, An , 1996 .

[79]  David Letson,et al.  Point/nonpoint source pollution reduction trading: an interpretive survey , 1992 .

[80]  M. Ribaudo,et al.  Targeting the Conservation Reserve Program to Maximize Water Quality Benefits , 1989 .

[81]  U. Chakravorty,et al.  Fertilizer and crop yield variability: a review. , 1989 .

[82]  R. Innes,et al.  Agricultural Insurance and Soil Depletion in a Simple Dynamic Model , 1994 .

[83]  Katherine H. Reichelderfer,et al.  Government Decision Making and Program Performance: The Case of the Conservation Reserve Program , 1988 .

[84]  E. Douglas Beach,et al.  A Hedonic Analysis of Herbicides: Do User Safety and Water Quality Matter? , 1993 .

[85]  Mark W. Rosegrant,et al.  THE EFFECT OF FERTILISER ON RISK: A HETEROSCEDASTIC PRODUCTION FUNCTION WITH MEASURABLE STOCHASTIC INPUTS , 1985 .

[86]  J. Fernandez-Cornejo,et al.  Quality-Adjusted Price and Quantity Indices for Pesticides , 1995 .

[87]  Rodney B.W. Smith.  The Conservation Reserve Program as a Least-Cost Land Retirement Mechanism , 1995 .

[88]  Ramón López,et al.  Dual economic growth in poor tropical areas , 1991 .

[89]  Q. Paris,et al.  A New Analytical Framework for the Fertilization Problem , 1981 .

[90]  D. Cole,et al.  Pesticide Use and Farm Worker Health in Ecuadorian Potato Production , 1994 .

[91]  Kathleen Segerson,et al.  Uncertainty And Incentives For Nonpoint Pollution Control , 1988 .

[92]  Ariel Dinar,et al.  Agricultural water marketing, allocative efficiency, and drainage reduction , 1991 .

[93]  Martin Walker,et al.  Achieving environmental standards with stochastic discharges , 1983 .

[94]  L. Shabman,et al.  The Effects of Agricultural and Tax Policy Reform on the Economic Return to Wetland Drainage in the Mississippi Delta Region , 1993 .

[95]  R. Chambers.  Insurability and Moral Hazard in Agricultural Insurance Markets , 1989 .

[96]  Peter S. Menell.  The Limitations of Legal Institutions for Addressing Environmental Risks , 1991 .

[97]  James E. Wilen,et al.  Water Markets and Water Quality , 1993 .

[98]  R. Weaver,et al.  Damage Control Productivity: Why Econometrics Matters , 1997 .

[99]  D. A. King,et al.  Influence of Soil Conservation on Farm Land Values , 1988 .

[100]  Steven T. Buccola,et al.  Joint Risk Preference-Technology Estimation with a Primal System , 1991 .

[101]  Kathleen Segerson,et al.  The Impact of Policies and Land Characteristics on Potential Groundwater Pollution in Wisconsin , 1995 .

[102]  David L. Sunding,et al.  Explaining Irrigation Technology Choices: A Microparameter Approach , 1996 .

[103]  P. Pingali,et al.  Pesticides, Productivity, and Farmer Health: A Philippine Case Study , 1994 .

[104]  J. LaFrance.  DO INCREASED COMMODITY PRICES LEAD TO MORE OR LESS SOIL DEGRADATION , 1992 .

[105]  Rulon D. Pope,et al.  Production Uncertainty and Factor Demands for the Competitive Firm , 1979 .

[106]  Q. Paris,et al.  Testing a von Liebig Crop Response Function against Polynomial Specifications , 1985 .

[107]  John Quiggin,et al.  Comparative statics for rank-dependent expected utility theory , 1990 .

[108]  M. Ribaudo,et al.  Land Retirement as a Tool for Reducing Agricultural Nonpoint Source Pollution , 1994 .

[109]  P. C. Huszar.  Economics of Reducing Off-Site Costs of Wind Erosion , 1989 .

[110]  U. Regev,et al.  Fungicide use under risk in Swiss wheat production , 1996 .

[111]  D. Ervin,et al.  Agricultural Land Markets and Soil Erosion: Policy Relevance and Conceptual Issues , 1985 .

[112]  D. Bromley,et al.  Agricultural Runoff as a Nonpoint Externality: A Theoretical Development , 1982 .

[113]  C. Thraen,et al.  Environmental concern and the adoption of farm technologies , 1986 .

[114]  Daniel F. Spulber.  Optimal environmental regulation under asymmetric information , 1988 .

[115]  J. Quiggin,et al.  Non-point-source pollution regulation as a multi-task principal-agent problem , 1996 .

[116]  Daniel W. Bromley,et al.  Soil Management Decisions: How Should They Be Compared and What Variables Influence Them? , 1986 .

[117]  James J. Opaluch,et al.  Nonpoint Agricultural Pollution: Pesticide Contamination of Groundwater Supplies , 1985 .

[118]  David Zilberman,et al.  The Economics of a Public Fund for Environmental Amenities: A Study of Crp Contracts , 1996 .

[119]  K. Knapp,et al.  Estimation of von Liebig Response Functions , 1989 .

[120]  Bruce R. Beattie,et al.  A Comparison of Alternative Crop Response Models , 1990 .

[121]  David Letson,et al.  Feasibility of point‐nonpoint source trading for managing agricultural pollutant loadings to coastal waters , 1994 .

[122]  Internalizing Agricultural Nitrogen Pollution Externalities: A Case Study , 1975 .

[123]  A. Blackmer,et al.  Comparison of Models for Describing; Corn Yield Response to Nitrogen Fertilizer , 1990 .

[124]  L. Joe Moffitt,et al.  Damage Control Econometrics: Functional Specification and Pesticide Productivity , 1992 .

[125]  B. Babcock,et al.  Contract Design for the Purchase of Environmental Goods from Agriculture , 1996 .

[126]  Gedeon Dagan,et al.  Optimization of a Spatially Variable Resource: An Illustration for Irrigated Crops , 1985 .

[127]  K. Segerson.  Liability for groundwater contamination from pesticides , 1990 .

[128]  Daniel J. Bernardo,et al.  Farm-Level Economic Analysis Incorporating Stochastic Environmental Risk Assessment , 1995 .

[129]  Adam B. Jaffe,et al.  Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands , 1990 .

[130]  D. Zilberman,et al.  Impact of Damage Control and Quality of Output: Estimating Pest Control Effectiveness , 1992 .

[131]  G. Helfand,et al.  Second‐Best Tax Policies to Reduce Nonpoint Source Pollution , 1996 .

[132]  J. Shortle,et al.  Intertemporal Soil Resource Use: Is It Socially Excessive? , 1987 .

[133]  W. H. Furtan,et al.  Economics of agricultural crop insurance: theory and evidence. , 1994 .

[134]  B. Babcock,et al.  Input Demand Under Yield and Revenue Insurance , 1996 .

[135]  R. Innes,et al.  Risk, Risk Aversion, and On-Farm Soil Depletion , 1993 .

[136]  R. Chambers,et al.  A Nonparametric Approach to the Von Liebig‐Paris Technology , 1994 .

[137]  Erik Lichtenberg,et al.  ALTERNATIVE APPROACHES TO PESTICIDE REGULATION , 1992 .

[138]  Earl O. Heady,et al.  Controlling Nonpoint Sediment Sources with Cropland Management: A National Economic Assessment , 1977 .

[139]  M. Cropper,et al.  Environmental Economics: A Survey , 1992 .

[140]  B. Hubbell,et al.  Effects of Insecticide Attributes on Within‐Season Insecticide Product and Rate Choices: The Case of U.S. Apple Growers , 1998 .

[141]  Erik Lichtenberg,et al.  Simple Econometrics of Pesticide Productivity , 1994 .

[142]  Erik Lichtenberg,et al.  Land Quality, Irrigation Development, and Cropping Patterns in the Northern High Plains , 1989 .

[143]  A. J. Oskam,et al.  Additional EU policy instruments for plant protection products : a report within the second phase of the programme: Possibilities for future EC environmental policy on plant protection products , 1998 .

[144]  V. Stern,et al.  The integration of chemical and biological control of arthropod pests. , 1962, Annual review of entomology.

[145]  K. Heong,et al.  An analysis of insecticide use in rice: Case studies in the Philippines and Vietnam , 1994 .

[146]  Bruce A. Babcock,et al.  Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information , 1995 .

[147]  D. Zilberman,et al.  The California Irrigation Management Information System (CIMIS): Intended and Unanticipated Impacts of Public Investment , 1998 .

[148]  S. Barrett.  Optimal soil conservation and the reform of agricultural pricing policies , 1991 .

[149]  D. Zilberman,et al.  Marginal Analysis of Welfare Costs of Environmental Policies: The Case of Pesticide Regulation , 1988 .

[150]  L. Moffitt.  Incorporating Environmental Considerations in Pest Control Advice for , 1988 .

[151]  R. Chambers.  On the Design of Agricultural Policy Mechanisms , 1989 .

[152]  Richard A. Smith,et al.  Water-Quality Trends in the Nation's Rivers , 1987, Science.

[153]  R. Farnsworth,et al.  COTTON PRODUCTION UNDER RISK: AN ANALYSIS OF INPUT EFFECTS ON YIELD VARIABILITY AND FACTOR DEMAND , 1981 .

[154]  J. Miranowski,et al.  Implicit Prices of Soil Characteristics for Farmland in Iowa , 1984 .

[155]  Eli Feinerman,et al.  The economics of irrigation with nonuniform infiltration , 1983 .

[156]  Gloria E. Helfand,et al.  Regulating Nonpoint Source Pollution Under Heterogeneous Conditions , 1995 .

[157]  David L. Sunding,et al.  Measuring the Marginal Cost of Nonuniform Environmental Regulations , 1996 .

[158]  David J. Pannell,et al.  Pests and pesticides, risk and risk aversion , 1991 .

[159]  R. Adams,et al.  The Importance of Site-Specific Information in the Design of Policies to Control Pollution , 1997 .

[160]  Testing producer perceptions of jointly beneficial best management practices for improved water quality , 1997 .

[161]  R. Barrows,et al.  The Impact of Soil Conservation Investments on Land Prices , 1985 .

[162]  A. Dinar,et al.  Water and Land as Quantity-Rationed Inputs in California Agriculture: Empirical Tests and Water Policy Implications , 1995 .

[163]  ARE FUNGICIDES, NITROGEN AND PLANT GROWTH REGULATORS RISK-REDUCING? EMPIRICAL EVIDENCE FROM SWISS WHEAT PRODUCTION , 1997 .

[164]  S. Grepperud.  Soil conservation and governmental policies in tropical areas: Does aid worsen the incentives for arresting erosion? , 1995 .

[165]  Gershon Feder.  Pesticides, Information, and Pest Management under Uncertainty , 1979 .

[166]  Klaus K. Frohberg,et al.  The Welfare Effects of Erosion Controls, Banning Pesticides, and Limiting Fertilizer Application in the Corn Belt , 1978 .

[167]  H. Mapp,et al.  Economic and Environmental Impacts of Limiting Nitrogen Use to Protect Water Quality: A Stochastic Regional Analysis , 1994 .

[168]  Dale G. Bottrell,et al.  Protecting crops and the environment: striving for durability. , 1995 .

[169]  L. Moffitt.  RISK‐EFFICIENT THRESHOLDS FOR PEST CONTROL DECISIONS , 1986 .

[170]  C. Kling,et al.  Uncoordinated Agricultural and Environmental Policy Making: An Application to Irrigated Agriculture in the West , 1996 .

[171]  John B. Braden,et al.  Optimal Spatial Management of Agricultural Pollution , 1989 .

[172]  Q. Paris,et al.  A von Liebig Model for Water and Nitrogen Crop Response , 1987 .

[173]  Brian W. Gould,et al.  Conservation Tillage: The Role of Farm and Operator Characteristics and the Perception of Soil Erosion , 1989 .

[174]  D. Zilberman,et al.  The Economics of Pesticide Use and Regulation , 1991, Science.

[175]  Joyotee Smith,et al.  Production Risk and Optimal Fertilizer Rates: A Random Coefficient Model , 1985 .

[176]  David Zilberman,et al.  Incentives, precision technology and environmental protection , 1997 .

[177]  David E. Ervin,et al.  Factors Affecting the Use of Soil Conservation Practices: Hypotheses, Evidence, and Policy Implications , 1982 .

[178]  Kong Luen Heong,et al.  The role of biodiversity in the dynamics and management of insect pests of tropical irrigated rice—a review , 1994 .