Cost–Benefit Analysis of Soil Degradation and Restoration - Principles of Sustainable Soil Management in Agroecosystems - page 251

Reservoir makes economic sense when the more inclusive accounting stance of BCA
is applied. The series of studies in case 3 on the extra market downstream economic
impacts of soil erosion from agriculture and surface mining in Ohio consistently
demonstrate nontrivial economic impacts with important implications for soil con-
servation policy. Finally, the BCA by Shakya and Hitzhusen (1997) and Kiger and
Hitzhusen (2012) on the downstream benefits and potential on-site energy benefits
of the USDA CRP in Case 4 has important implications for building an economic
rationale for continuing to protect the highly erodible and environmentally sensitive
cropland and pasture land enrolled in CRP.
Although a strong case can be made for the importance of BCA in reducing soil
degradation and enhancing soil restoration, it is best viewed as a necessary but not
sufficient condition for more efficient and enlightened public policy on soil conser-
vation and restoration. The physical and biological technologies for improved soil
conservation and restoration are obviously important but not a detailed part of the
scope of this chapter. A very large literature exists on the application of linear pro-
gramming and other constrained optimization models to soil erosion, but these are
not part of the benefit-cost paradigm since they only look at net returns to farmers
from various soil loss constraints. Changing definition and enforcement of prop-
erty rights or entitlements to land use and the application of insights from institu-
tional economics and public choice theory are also critical (see Satish et al. 1992;
Southgate et al. 1984). Many implications for improved soil conservation policy and
more sustainable agriculture in the US context were discussed in case 4 and flow
from this broader perspective.
Clearly, more empirical evidence is needed regarding on-site and downstream costs
(particularly groundwater contamination) and returns of alternative tillage and rota-
tion systems if socially optimal systems are to be identified. However, the evidence to
date suggests that, on average, downstream costs of soil erosion are not trivial and that
they exceed the average on-site costs of soil erosion. This implies that some form of
tax, subsidy, technical assistance, or regulatory intervention may be appropriate and
necessary. The evidence also suggests that downstream costs per unit of soil loss can
vary dramatically from site to site. This points to the extreme importance of target-
ing control measures (even if chemical input taxes or penalties are based on average
downstream impacts) and to the need for revision of property rights or institutions to
assure both efficiency and fairness in remediation.
More comprehensive economic assessment, particularly of the downstream costs
and benefits of alternative farming systems, is likely to favor those systems that are
less erosive and chemically intensive. This in turn leads to the need to reassess the
entitlements and property rights related to alternative farming systems and their
downstream impacts. Evidence to date suggests shifts in favor of the impacted down-
stream users, and these trends will probably continue. Thus, sustainable agriculture
is an idea that is currently ecologically, and in many cases, economically attractive.
In addition, its future economic attractiveness is likely to increase.
Finally, for a more holistic and global context regarding applying the foregoing
concepts in sustainable agricultural development in developing countries, see the
debate series by that title published in the journal Choices (First Quarter 1997). An
ecologist colleague at OSU, Craig Davis, joined me (at Dr. Harry Ayers request)