Cost–Benefit Analysis of Soil Degradation and Restoration - Principles of Sustainable Soil Management in Agroecosystems - page 249

regions are used as the medium-level soil erosion off-site costs, and the Corn Belt
values alone are used for the low-level soil erosion off-site costs. It is important to
note that this value does not include the costs of biological impacts of soil erosion
and the damage from wind erosion, thus making it a conservative estimate of soil
erosion economic impacts (Shakya 1992).
Estimations of the on-farm costs are based on the amount of soil lost per acre per
year (Colacicco et al. 1989). These values have also been established for the three
regions. They are similarly averaged across the three regions and adjusted to 2011
values ( Table 10.5 ). On-farm benefits not only affect the economic analysis but farm-
ers directly incur these benefits in the financial analysis as well ( B on ).
The average soil loss for Ohio cropland was estimated to be 5.6 metric tons per
hectare per year (USDA-NRCS 2009). The amount of soil saved under CRP can be
considered as a societal benefit. CRP land in Ohio has been shown to reduce erosion
to about 0.45 metric ton per hectare per year (USDA-NRCS 2009). So while there
is still some soil loss on CRP land, it is far less than that of cropland. This makes
CRP more sustainable and results in lower off-site costs. Using the same methods
and formula created by Shakya (1992), off-site and on-site costs and benefits of soil
erosion were determined (Table 10.5).
Since environmental benefits from CRP land extend beyond soil loss, additional
benefits were also considered. Erosion from agricultural sites can have a large impact
on Ohio lakes and streams and in turn can influence visitation at water-recreation
sites (Hitzhusen 2007). CRP in Ohio has been shown to provide habitat for a large
number of grassland bird species, including pheasants, which have been marginal-
ized by agricultural production (Swanson et al. 1999). Feather et al. (1999) used data
on recreation and land use characteristics from multiple surveys collected by the
USDA's Economic Research Service. These data were then used to generate recre-
ation models that estimate the benefits of CRP land.
This study included Ohio in the Northeastern region. Since many other Corn
Belt states (Indiana, Illinois, and Wisconsin) were included in this region, averaging
across regions was not necessary. This study reports environmental benefits for three
aspects of CRP land—freshwater-based recreation, pheasant hunting, and wildlife
viewing—and uses trip and travel cost data to determine the consumer surplus due to
CRP. Consumer surplus measures the benefits consumers derive from the consump-
tion of goods and services; it is the difference between what consumers are willing
to pay for a good or service and what they actually pay. The values reported in this
study, totaling $182.95 per hectare, have been adjusted for inflation and are added to
the total economic benefits of CRP reported in this study ( Table 10.6 ).
In total, the economic values calculated indicate that the total economic benefit
of CRP lands in Ohio is $88.90 per acre per year (Table 10.6). This represents a
low-bound value for the economic benefits of Ohio CRP land, as it does not include
all economic benefits such as nutrient load reductions to streams and lakes, carbon
sequestration, biological improvements, and potential use of energy crops grown on
CRP lands for biofuel production. Additional analysis is underway on potential on-site
benefits of biofuel production on CRP lands. These on-site and off-site benefits will
then be compared to farmers' land opportunity and other costs minus CRP govern-
ment payments to get at net benefits to both farmers and society.