Robert A. Schipper

Quantifying economic and biophysical sustainability trade-offs in land use exploration at the regional level: a case study for the Northern Atlantic Zone of Costa Rica

A generic methodology is presented for exploration of sustainable land use options at the regional level by quantifying trade-offs between socio-economic and biophysical sustainability objectives. The methodology is called SOLUS (Sustainable Options for Land USe), and was developed over a ten year period of investigation in the Northern Atlantic Zone of Costa Rica. SOLUS includes a linear programming model, technical coefficient generators for livestock and cropping activities and a geographic information system. The linear programming model maximizes regional economic surplus subject to a flexible number of resource and sustainability constraints. Economic sustainability indicators are economic surplus and labor employment, and biophysical ones include soil N, P and K balances, pesticide use and its environmental impact, nutrient losses and a proxy for trace gas emissions. The capabilities of the methodology are illustrated for the Northern Atlantic Zone of Costa Rica. Though ample scope exists for reducing environmental effects and introducing sustainable production systems separately, pursuing both objectives simultaneously, considerably reduces economic surplus and agricultural employment. Agricultural area can be decreased and forested area increased without severely affecting the regional economic surplus.

Forest Conservation in Costa Rica when Nonuse Benefits are Uncertain but Rising

Stochastic dynamic programming is used to investigate optimal holding of primary tropical forest in humid Costa Rica when future nonuse benefits of forest conservation are uncertain and increasing. The quasi-option value of maintaining primary forests is included as a component of investment in natural capital. Although the impact of uncertainty on conservation incentives is substantial, our results indicate that a rising trend in future benefits and compensation by the international community for beneficial spillovers are more important factors in determining optimal holdings of forest stocks. Without compensatory payments, however, further deforestation may be warranted.

Farmers' welfare, food production and the environment: a model-based assessment of the effects of new technologies in the northern Philippines.

Policy objectives of attaining food self-sufficiency and improving the well-being of subsistence farmers while protecting the environment have stimulated the development of many improved agricultural production technologies. With a choice of technologies, farm household decisions are governed not only by productivity and profitability considerations but also by factors such as available resources and their quality, family consumption preferences and attitudes towards risks, and prevailing policies. It is therefore necessary to analyse the adoption of such technologies from a whole-farm perspective. In this paper, a farm household model is used to assess possible technology adoption behaviour of farmers in Ilocos Norte Province, Philippines. Four alternative technologies were evaluated: hybrid rice production (HYR), balanced fertilization strategy (BFS), site-specific nutrient management (SSNM) and integrated pest management (IPM). Possible impacts of price policies and infrastructure improvements on technology adoption were assessed. The results show that all four alternative technologies considered are attractive to farmers, although simulations show differential adoption rates for poor, average and better-off households. IPM and HYR appear the most attractive amongst all technologies considered. In all technology simulations, relative profitability and risks, labour and capital requirements and availabilities are decisive factors in the adoption of alternative technologies. Adoption of alternative technologies would result in higher discretionary income, higher rice production and lower biocide use and nitrogen loss. Amongst policy simulations considered, availability of low-cost credit shows the largest improvements in farmer welfare for poor and average households, but its effect on simulated adoption of alternative technologies was variable. We argue that the methodology and results presented can contribute to ex ante assessments of policies targeted at stimulating technology adoption by farmers.

Integrated biophysical and socio-economic analysis of regional land use

A methodology is presented with which regional land use options can be explored in order to provide policy support. This methodology is called SOLUS (Sustainable Options for Land USe) and integrates a linear programming model called REALM (Regional Economic and Agricultural Land-use Model) with Technical Coefficient Generators for crops (called LUCTOR) and for livestock activities (called PASTOR) used to quantify the technical coefficients of land use systems, and with a geographic information system (GIS). SOLUS is implemented for a case study in the northern Atlantic Zone of Costa Rica, with the objectives of i) analyzing regional land use practices while taking into account economic and environmental objectives and restrictions, and ii) evaluating economic and agrarian policies that influence the agricultural sector. Salient characteristics of the SOLUS methodology are the geographic explicit delineation of land and labor resources, the incorporation of endogenous prices of outputs and labor, and the variation of output prices according to quality of roads and distance to markets. The latter two aspects are related to the size of the region, while endogenous prices and wages are necessary because the supply originating in the region is capable of influencing prices and wages. Seven policy scenarios are studied that address policy and sustainability issues relevant to the region: technological change, zero soil nutrient depletion, limiting biocide use, taxing biocides, forest conservation, lowering interest rates and increasing real wages. It is shown that the SOLUS methodology is a suitable tool for the analysis of policy options in order to support policy decisions, as well as to analyze future land use options in view of their effects on income and the environment.

A toolbox for land use analysis

This chapter provides an overview of the various methodologies for land use analysis presented in this book. It starts with a discussion of objectives, structure, terminology, levels of analysis, and aggregation issues. The methodologies are classified in five groups, (i) projective, (ii) explorative, (iii) predictive, (iv) generative and (v) design-oriented. Whereas the first three involve land use analysis on (sub-)regional to national scales, the fourth quantifies actual and alternative land use systems, and the fifth provides completely new farm or field management designs. The terminology used in all methodologies closely follows the one originally suggested by the FAO. The land use methodologies cover a series of spatial scales — or levels of analysis — and aggregation issues, involving the land use system, farm, sub-region, region and nation. For all methodologies, the implementation domain is explicitly specified, as well as their mutual complementarity and role in agricultural policy support. Together, the methodologies form a coherent toolbox to support policy design by analyzing (i) current land use, (ii) likely changes in future land use and their drivers, (iii) technical options for future land use, and (iv) policies intended to induce land use changes in the (near) future. Sustainability issues addressed are related to the goals of “maintaining the resource base”, “protecting the environment” and “optimizing non-renewable resource use efficiency”. Whereas the first two concepts are mainly biophysical in nature, the latter focuses more on economics. Specific biophysical sustainability indicators relating to the first two concepts were derived from relevant sustainability issues in the Atlantic Zone of Costa Rica, and implemented in the generative, explorative and predictive methodologies. Finally, reflections are offered on the importance of user involvement in both the development and the application of land use analysis methodologies for successful policy support.

Integrated bioeconomic land-use models: an analysis of policy issues in the Atlantic zone of Costa Rica.

1 Development Economics Group, Department of Economics and Management, Wageningen Agricultural University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands 2 Research Program on Sustainability in Agriculture (REPOSA), Apartado 224, 7210 Guapiles, Costa Rica 3 Agricultural Economics Research Institute (LEI-Wageningen UR), P.O. Box 29703, 2502 LS The Hague, The Netherlands 4 DLO-Research Institute for Agrobiology and Soil Fertility, Wageningen, The Netherlands 5 International Rice Research Institute (IRRI), P.O. Box 3127, Makati Central Post Office (MCPO), 1271 Makati City, Philippines 6 Laboratory of Theoretical Production Ecology, Department of Crop Science, Wageningen Agricultural University, P.O. Box 430, 6700 AK Wageningen, The Netherlands 7 Centro International de Politica Economica para el Desarrollo Sostenible (CINPE), Universidad Nacional, Apartado 555-3000, Heredia, Costa Rica

Farm modeling for policy analysis on the farm and regional level

The Atlantic Zone of Costa Rica accounts for nearly half of the total agricultural income in Costa Rica, and therefore is an important region for agricultural policy. Policy analysis can be performed on the regional level, using regional agricultural sector models that maximize regional welfare, as well as on the farm level, where different farm types are characterized by their specific objectives, production possibilities and resource endowments. While the former approach fails to model farm type-specific characteristics, the simple aggregation to the regional level of the representative farm type results ignores the interaction between the farm types that occurs in product and factor markets. The present study presents a regional equilibrium modeling approach that incorporates farm type characteristics as well as the equilibrium equations for product markets. Compared to a simple aggregation of representative partial results with exogenous output prices, the results produced by the regional equilibrium model indicate that the endogenization of product prices leads to lower levels of specialization in agricultural production, as well as lower incomes, profits and labor use. As such, the results obtained in a model with endogenous prices better reflect reality. A number of policy simulations are performed, including a 20% decrease in transaction costs, a 40% tax on biocide prices, and a 20% increase in credit availability. The former as well as the latter lead to increased cash crop production and corresponding increases in agricultural income, while taxing biocides leads to less biocide intensive cropping systems. The effectiveness of policy measures is, however, overestimated when product prices are assumed exogenous, since endogenously determined product prices limit specialization in the most profitable crops or in crops that require relatively low levels of biocides.

Alternative approaches to the economics on soil nutrient depletion in Costa Rica: exploratory, predictive and normative bio-economic models

This chapter discusses three methodologies to analyse land use with respect to income generation and sustainability in the Atlantic Zone of Costa Rica: the explorative SOLUS methodology,the predictive UNA-DLV methodology,and a normative optimal control approach. Each methodology may be classified as bioeconomic; the first two are single period optimisation models at the regional and farm level,respectively,while the third is a dynamic model at the plot level. The SOLUS and UNA-DLV methodologies incorporate a multi-market structure for commodities produced by a wide spectrum of land use systems with specified technologies. For each of these systems,technical coefficients are generated related to discounted benefits and costs,and to sustainability indicators,including soil nutrient depletion. The optimal control model is confined to a pasture plot with cattle,property of a single farmer,and analyses the inter-temporal trade-off between soil nitrogen depletion and net benefits. Apart from assessing the ‘economic benefit - sustainability’ trade-off,all methodologies are capable of analysing the effects of technological change. After providing some example results,the chapter concludes with a comparison of the relative merits of each methodology.

The physical and socio-economic setting: the northern Atlantic Zone of Costa Rica

The biophysical and socio-economic setting of the northern part of the Atlantic Zone of Costa Rica, insofar as relevant for the other chapters of this book, is described. The flat topography, the perhumid tropical climate, and the soils that vary considerably in fertility and drainage conditions, are important biophysical factors that influence land use. From a socio-economic point of view, the area is characterized by its colonization history, an expanding but still limited road infrastructure outside the main regional centres, and agricultural practices dominated by large plantations and cattle holdings, along with a large number of smallholders both inside and outside state-organized settlements. Abolishment of subsidies for basic grains in the 1980s and the increasing exposure to world markets led to important changes in land use. Salient development issues in the area concerning questions of land use include: unequal land distribution between small and medium farm holdings on the one hand, and large cattle farms and banana plantations on the other; conflicts about forest use and protection; intensive use of agro-chemicals; greenhouse gas emissions; and low, sometimes declining, productivity of agriculture in certain parts of the region as a result of improper resource management.

Technical coefficient generators for quantifying land use systems.

Many approaches to land use modeling employ linear programming techniques. Technical Coefficient Generators are expert systems designed to “generate” the technical coefficients of land use systems, herds and feed supplements used in linear programming models. The generated coefficients represent inputs and outputs of the production systems. This chapter describes two generic Technical Coefficient Generators, PASTOR (Pasture and Animal System Technical coefficient generatOR) and LUCTOR (Land Use Crop Technical coefficient generatOR), both of which quantify land use systems based on the integration of systems-analytical knowledge and expert knowledge. PASTOR quantifies pasture land use systems, herds and feed supplements in livestock production, while LUCTOR is concerned with annual, perennial and timber systems and managed natural forest. The main inputs quantified are labor requirements, fertilizers, biocides and associated costs. Outputs consist of yield and associated sustainability indicators: changes in soil N, P and K stocks (△ stock); N losses via leaching, volatilization and (de)nitrification; quantities of the active ingredients applied in biocides and a so-called biocide index. PASTOR and LUCTOR are illustrated with data from the northern Atlantic Zone of Costa Rica.