John G. Lee

Import Restrictions in the Presence of a Health Risk: An Illustration Using FMD

We present a simple model linking infection risk from imports to a tariff. The risk causes the exporter of the infected product to face a higher tariff than would otherwise be the case. A numerical example is developed for U.S. beef imports from nations with Foot-and-Mouth Disease (FMD). The additional tariffs are sensitive to the specification of risk and the expected magnitude of loss due to an FMD outbreak. For a low risk of importing FMD, the tariffs levied against the exporter of FMD-infected beef are not prohibitive but become so as the risk or expected output loss rises. Copyright 1998, Oxford University Press.

Forest Tenure Systems and Sustainable Forest Management: The Case of Ghana

Abstract Adoption and implementation of sustainable forestry practices are essential for sustaining forest resources, yet development of effective policies and strategies to achieve them are problematic. Part of the difficulty stems from a limited understanding of the interaction between obtrusive forest policies and indigenous tenure systems and how this affects sustainable forest management. This study uses a market framework to analyze the relationships between individual components of forest tenure and sustainable forestry practices. Data from 21 rural communities in the forest belt of Ghana are used to evaluate theoretical propositions. Logistic regression models are used to predict willingness to engage in the preservation of indigenous, economically valuable trees, conservation of natural forests, and establishment of forest plantations. The number of farmers engaged in sustainable forestry practices is small. While most tenure variables behaved as expected, security of tenure and exclusiveness are less important to the practice of sustainable forestry. Farmers, in their role as potential producers, perceive preservation of indigenous, economically valuable trees and conservation of forests as having a net cost to them, especially if compensation is not paid for damage to crops resulting from logging operations of concessionaires. Current statutes in Ghana provide few incentives for farmers to engage in sustainable practices. The study also provides recommendations for forest tenure systems to function effectively.

Multiattribute Assessment of Alternative Cropping Systems

Multiattribute rankings of seventy-two alternative midwestern cropping systems involving corn, soybeans, and alfalfa hay are analyzed from profitability and environmental quality perspectives. Environmental consequences are simulated using EPIC and GLEAMS, and profitability is based on budget analysis. Results are analyzed using an algorithm based on multiattribute decision theory. A corn-soybean rotation using low input levels and minimum tillage on high-productivity soil, and continuous corn using low input levels and minimum tillage on low-productivity soil are in the preferred set regardless of whether profits or preserving the environment is the first priority for the decision maker.

Multifunctionality and Agricultural Trade Negotiations

Differing views of multifunctionality - attributing nonmarket benefits to agricultural production - continue to be an obstacle in World Trade Organization (WTO) negotiations. Some nations see multifunctionality as justifying subsidies to agricultural production; others see it as disguised protection. This paper shows that while multifunctionality never justifies trade interventions, it can justify production subsidies or taxes. Recognizing that the subsidies or taxes can be economically efficient policies, nations must precisely define and value the externalities in order to design policies and defend those interventions in the WTO. Trade rules are developed that accommodate domestic policy intervention while preventing disguised protection.

ECONOMIC AND WATER QUALITY IMPACTS OF REDUCING NITROGEN AND PESTICIDE USE IN AGRICULTURE

A multiyear regional risk programming model was used in evaluating the impacts of different environmental policies on cropping systems, input use, nonpoint source pollution, farm income and risk. A direct expected utility maximizing problem (DEMP) objective with a Von Neuman Morgenstern utility function was used in deriving optimal cropping systems. A biophysical simulation model provided input for the optimization. Three types of policies-taxing, regulating the aggregate, and regulating the per acre level-were studied for two farm inputs-nitrogen and atazine. It was observed that policies had varied and multiple cross-effects on pollutant loads, farm income, and risk. This information is crucial in developing successful policies toward improving water quality. If an appropriate input policy is chosen, both targeted and nontargeted pollutant loads can be managed. The three policies varied in their effects on pollutant loads and involved tradeoffs in water quality and economic attributes.

Measuring Welfare Effects of an FMD Outbreak in the United States

Questions have been raised regarding the economic costs of food-and-mouth disease (FMD) outbreak in the United States. This analysis examines how welfare changes are measured and argues that they must be decomposed by groups. Producers with animals quarantined and slaughtered because of FMD measure their welfare change using lost sales. Producers not quarantined measure their welfare change using producer surplus. The change in national sales revenue is accurate when the supply elasticity is low. Welfare changes for consumers also must be decomposed because the change in aggregate consumer surplus hides important shifts in welfare among groups of consumers.

Multiple criteria dynamic spatial optimization to manage water quality on a watershed scale

This article develops a dynamic spatial optimization algorithm for watershed modeling that reduces dimensionality and incorporates multiple objectives. Spatial optimization methods, which include spatially linear and nonlinear formulations, are applied to an experimental watershed and tested against a full enumeration frontier. The integrated algorithm includes biophysical simulation and economic decision-making within a geographic information system. It was observed that it is possible to achieve economic and water quality objectives in a watershed by spatially optimizing site-specific practices. It was observed that a spatially diversified watershed plan could achieve multiple goals in a watershed. The algorithm can be used to develop efficient policies towards environmental management of watersheds to address water quality issues by identifying optimal tradeoffs across objectives.

Economic Impacts of Regionalization of a Highly Pathogenic Avian Influenza Outbreak in the United States

This analysis examines the economic impact of an outbreak of highly pathogenic avian influenza (HPAI) and the consequences of regionalization. The results suggest that an outbreak would have serious economic effects. Depending on the regionalization scenario, returns to capital and management in the poultry meat and egg sectors would fall between

Incorporating Stochastic Variables in Crop Response Models: Implications for Fertilization Decisions

602 million and

U.S. Trade Policy on Lamb Meat: Who Gets Fleeced?

853 million dollars over 16 quarters. Consumers of poultry meat lose