Show me the money: why economics is essential for sustainable agriculture

Agricultural Research, July, 2007 by Laura McGinnis

Farmers who want the best for their fields and families often have to balance ecological and financial concerns. So how do they choose the best equipment and management techniques to suit their needs? How do they know a new path will lead to profitability and sustainability--and not to regret?

ARS research across the country is helping to identify the best combinations of tools, crops, and management to balance the interests of stewardship and profitability.

Go With the Flow

U.S. policymakers have implemented several incentive programs to encourage farmers and ranchers to adopt conservation practices. Watershed models that simulate the effects of such practices are an important element of USDA efforts such as the Conservation Effects Assessment Project (CEAP). A multiagency program, CEAP is assessing how U.S. conservation programs benefit water, soil, air, and wildlife.

Jerry Whittaker, a hydrologist in ARS's Forage Seed and Cereal Research Unit at Corvallis, Oregon, is helping to develop a modeling system for use in CEAP and other ARS conservation research.

"The system determines the optimal trade-offs among conservation practices, producer profits, and water quality," Whittaker says. "An economic model chooses different management decisions, such as the amount of chemicals to apply. That information is fed into another model, which evaluates the effects of different economic decisions."

Whittaker is also speeding up economic analysis with a massive, custom-made parallel computer called a "Beowulf cluster." This is a very large, very fast, problem-solving computer--or rather, a cluster of inexpensive computers linked via an Ethernet, a sort of desktop "supercomputer."

Whittaker joined 24 processors into a cluster capable of solving complex problems as rapidly as a commercial parallel computer--but for only a fraction of the cost. He then wrote software for the computer to apply to economic, statistical, and hydrological ARS research. The results from Whittaker's models will be used to inform landowners, government agencies, environmental organizations, and legislators about the benefits of various conservation programs.

How well does it work? In one study, Whittaker calibrated the ARS hydrology model to match the observed water flow out of a watershed. The objective was to choose the best levels of 155 parameters in the model to match the observed flow.

"Usually a scientist has to calibrate a model by changing parameters one at a time and judging the results," Whittaker says. This task would ordinarily take about 9 months. The cluster completed it in 4 days by optimizing all 155 parameters simultaneously--an impossible feat for a human.

Technology like this enables faster analysis of the effects of conservation practices. This, in turn, enables managers to quickly decide whether to continue, increase, or modify their efforts for maximum benefit.

High-Tech Farm Tools

"Assessing risk in economic terms means reducing variability," says Jason Bergtold. An economist at the ARS National Soil Dynamics Laboratory in Auburn, Alabama, he has helped develop several decision aids to help agricultural professionals make informed management decisions.

Bergtold and colleagues are developing two user-friendly tools that will allow farmers to analyze the profitability of various management techniques: the Conservation Systems Learning Tool predicts how profitable various crops will be under different management systems; the Crop Profitability Calculator evaluates how factors such as management practices and conservation incentive payments influence the profitability of crop enterprises. It is being expanded to include more tools to analyze risk based on additional data.

To identify the best way to transfer technology to farmers, Bergtold also investigates which factors affect whether or not conservation practices are "picked up, kept up, or stepped up," he says. He and his colleagues have nearly completed a study of how factors such as demographics, farm characteristics, management practices, and personal beliefs influence southeastern farmers who could qualify for economic support by adopting various conservation practices. Understanding what leads farmers to embrace conservation could benefit program developers, researchers, and policymakers, he says.

Less Fertilizer and Tillage, More Profit

On a smaller scale, economic analysis can also reveal surprising truths about making agriculture profitable.

Because corn leaves a lot of crop residue, many growers till fields intensively when preparing for the next crop. To find out how tillage affects greenhouse gas emissions, soil scientist Ardell Halvorson, of the ARS Soil Plant Nutrient Research Unit in Fort Collins, Colorado, and Arvin Mosier, formerly with ARS, measured trace gas flux over a 3-year period in three cropping systems: conventionally tilled corn, no-till continuous corn, and a no-till corn-soybean rotation.

They worked with other ARS colleagues to gather and analyze the data. The team found that with adequate fertilizer, the no-till system sequestered more soil carbon than the conventionally tilled system and reduced greenhouse gas emissions.