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SWEEP Report #3

An Economic Assessment of the Distribution of Benefits Arising from Adoption of Conservation Tillage Practices in Crop Production in Southwestern Ontario

Researchers:
 
Edward J. Dickson and Glenn Fox, Department of Agricultural Economics and Business, University of Guelph, Guelph, Ont.

Executive Summary

Evaluation Summary (Tech. Transfer Report Summaries)

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Associated SWEEP/LSP Research

 

 

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Completed: March, 1988

Key Words:

economics, cost-benefit analysis, policy, on-farm costs, off-farm costs, conservation tillage, soil erosion

Executive Summary

The purpose of this study is to compare the on-farm and off-farm costs of soil erosion and assess the distribution of benefits arising from adoption of conservation tillage practices in selected watersheds in southwestern Ontario. The three watersheds studied are the Big Creek watershed in Essex County, the Newbiggen Creek watershed in Middlesex County, and the Stratford/Avon watershed in Perth County. The conventional tillage practice in all three watersheds is fall moldboard ploughing.

Simulation models are used to estimate changes in gross erosion, sediment delivery to streams, and farm net returns that accompany adoption of conservation tillage systems. A budgeting approach is used to estimate the off-farm costs of sedimentation from cropland and the off-farm benefits of adoption of conservation tillage practices. These benefits range from $9.93 to $71.70 per hectare and outweigh the on-farm cost of adoption in most cases.

In the past, the principal rationale for soil conservation policy in Ontario has been to preserve soil productivity. Recent emphasis on both soil and water quality with respect to soil erosion indicates that policy makers have begun to realize the magnitude of the off-farm impacts. The results of this study imply that this shift in emphasis should continue.

Evaluation Summary

(From Technology Transfer Report Summaries - A. Hayes, L. Cruickshank, Co-Chairs)

The intent of this study was to determine the relative cost-benefits of soil erosion control by conservation tillage. There are measurable costs and benefits on and off the farm. It was the thesis of the authors that off-farm benefits far exceed on-farm benefits and, as such, public policy should reflect this.

The researchers chose three representative watersheds in southwestern Ontario for their study. The on-farm portion of the study involved gathering sufficient cropping and economic information to predict the relative cost and benefits of conventional and conservation cropping/tillage systems using the Soil Conservation Economic (SOILEC) model. The Guelph model for evaluating the effects of Agricultural Management Systems on Erosion and Sedimentation (GAMES) was used to predict sediment loadings to surface waters from several cropping and tillage system scenarios. External data from OMAF statistics and University of Guelph research publications were used where local data was unavailable. Models were run to determine relative costs, net returns and benefit/cost ratios. Off-farm cost were expressed in terms of loss to fisheries, water treatment costs and other damages such as contaminants in sediment.

The authors concluded that: conservation tillage is the most cost-effective tillage system in most of the watershed areas; yield losses from conservation tillage exceeded labour and energy savings; off-farm benefits outweigh on-farm benefits; public policy should be directed to compensate on-farm economic losses with financial assistance; and, financial assistance programs should be targeted to areas where off-farm benefit/cost ratios exceed on-farm benefit/cost ratios.

Comments:

The rationale for this work and the research work itself was sound and well integrated.

There are several concerns:

  1. The authors' position inadvertently dismisses present efforts to develop cost-effective conservation technologies. Their assumption that reduced tillage = reduced yields = reduced profits is invalid. Release of this information has already caused misconceptions in the countryside.

  2. There appears to be a degree of bias in the literature reviewed which implied that the research results were inevitable.

  3. The operational definition for No-till reflects research done at Elora but not on-farm research results from the Tillage 2000 program. "No-till" in Ontario does allow for minimal within row tillage and residue management. The yield and cost/benefit analysis is considerably better for this more representative form of `No-till'.

  4. There continues to be controversy regarding on-farm economics of conservation practices. There is no evidence of specific cost items included in this document to ascertain the validity of the model used.

  5. Economics is an important motivator for change but does not entirely explain the behaviour of farmers.

This work should not be considered as the definitive work on economic analysis of conservation tillage.

The most significant finding was the verification that planting or drilling into high crop residue cover without proper residue management results in lower yields and returns when compared to conventional practices.

Associated SWEEP/LSP Research:

  • SWEEP Report #7 - Sources of Motivation in the Adoption of Conservation Tillage

  • SWEEP Report #8 - Social Structure and the Choice of Cropping Technology: Influence of Personal Networks on the Decision to Adopt Conservation Tillage

  • SWEEP Report #9 - Conservation Practices in Southwestern Ontario: Barriers to Adoption

  • SWEEP Report #10 - An Economic Evaluation of Tillage 2000 Demonstration Plot Data (1986-1988)

  • SWEEP Report #11 - An Economic Evaluation of Tillage 2000 Demonstration Plot Data (1986-1989)

  • SWEEP Report #SUP-1 - Tillage 2000: 1985-1990

Future Research: ( ) indicates reviewers suggestion for priority, A - high, C - low.

(B) There is a need for more research into integrated approaches to modelling resource, farm management and economic data for the purposes of extension and program planning.

 

 

 

 

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Created: 05-28-1996
Last Revised: Thursday, May 19, 2011 12:51:10 PM