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Commodity Programs and the Internalization of Erosion Costs: Do They Affect Crop Rotation Decisions?
Author(s) -
Poe Gregory L.,
Klemme Richard M.,
McComb Shawn J.,
Ambrosious John E.
Publication year - 1991
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.2307/1349639
Subject(s) - affect (linguistics) , commodity , crop rotation , internalization , business , economics , rotation (mathematics) , natural resource economics , agricultural economics , crop , finance , forestry , geography , psychology , computer science , genetics , communication , artificial intelligence , biology , cell
This paper investigates the impact of commodity programs and the internalization of erosion costs on crop rotation decisions. Not surprisingly, commodity programs are found to shift decisions toward more erosive rotations. Internalization of on‐site and off‐site erosion costs calculated under real interest rates of 2 and 4 percent and planning horizons of 20 and 40 years affect rotation decisions under historical market conditions. Under conditions of commodity program participation, internalization of erosion costs affect rotation decisions only when lengthy time horizons (40 years) are considered. The impact of cross‐compliance restrictions on rotation decisions is also examined.