Thomas L. Dobbs

The relative sustainability of alternative, conventional, and reduced-till farming systems

We compared the agronomic, economic, and ecological performance of alternative (organic), conventional, and reduced-till farming systems over a 7-year period. We evaluated the sustainability of the various systems regarding several concerns, including soil erosion, pollution potential, whole-farm productivity, energy use, environmental stress, economic performance, and farm size. The alternative systems relied primarily on forage legumes (alfalfa or clover) as substitutes for the pesticides and commercial fertilizers used in the other systems. Two studies were established in northeastern South Dakota in 1985. Study I emphasized row crops, Study II small grains. The alternative system in Study I, which included alfalfa hay in the rotation, was the most productive, both agronomically and economically. In Study II, the alternative system included a green manure crop (clover) in the 4-year rotation and had the lowest agronomic production; however, its economic performance was similar to the conventional systems. Year-to-year variability in production was lowest in the alternative systems. The alternative systems in both studies were the most energy-efficient, and the reduced-till systems the least. Judged by the distribution of nitrate-N in the soil profile, the potential for groundwater pollution was higher in the conventional and reduced-till systems in Study I than in the alternative system. The alternative systems in both studies depended less on government payments for their profitability. Results in Study I also showed that more widespread adoption of alternative systems would tend to halt or slow the trend of ever-increasing farm size. These studies suggest that alternative systems are more sustainable in this agro-climatic area.

Factors influencing the economic potential for alternative farming systems: Case analyses in South Dakota

Results of calculations on the economic potential for alternative (low input, sustainable) farming systems in a small grain-row crop region of the Northern Plains are reported. Two sets of alternative farming systems, in which no chemical fertilizers or herbicides are used, are compared with various conventional and reduced till systems. In Farming Systems Study I (FSS1), an alternative rotation consisting of oats, alfalfa, soybeans, and corn is compared with conventional and ridge till rotation systems composed of corn, soybeans, and spring wheat. In Farming Systems Study II (FSS2), three systems with an emphasis on small grains are compared. An alternative system rotation consisting of oats, sweet clover, soybeans, and spring wheat is compared with conventional and minimum till rotation systems comprised of soybeans, spring wheat, and barley. Results of baseline economic analyses show that alternative farming systems can be competitive with more conventional systems in at least some situations. The alternative systems entail markedly lower direct costs, and the alternative system in FSS2 has approximately the same net returns as the comparable conventional and minimum till systems. The FSS1 alternative system has positive but somewhat lower net returns than the comparable conventional and ridge till systems. Sensitivity analyses were conducted with alternative system crop yields, chemical fertilizer and herbicide prices, and varying assumptions about future Federal farm program support levels and acreage set aside requirements. The yield sensitivity analyses show that one alternative farming system requires yields about 5–10 percent above those of the comparable conventional system to produce the same net returns. However, the other alternative system is competitive with a conventional system even with yields 5 percent lower. Analyses varying chemical fertilizer and herbicide prices reveal that the alternative farming system in FSS1 becomes competitive with more conventional systems when fertilizer and herbicide prices rise by 50 percent. The alternative farming system in FSS2 is already competitive at current fertilizer and herbicide prices. In some cases, sensitivity analyses with Federal farm program provisions indicate that reductions in farm program benefits increase the economic competitiveness of alternative farming systems. However, important exceptions occur. Results indicate that not only the level of future farm program benefits, but also the form of program provisions and compliance requirements, will affect the relative competitiveness of alternative farming systems.

Potential effects on rural economies of conversion to sustainable farming systems

Conversions from conventional to sustainable farming systems could affect local rural economies either positively or negatively, by several means: changes in income of agricultural households; backward linkages to input supply firms; forward linkages to transportation, processing, and marketing firms; and changes in consumer expenditures by agricultural and other households. We estimated these effects for five local rural economies in South Dakota, representing different agroclimatic and population settlement patterns. Whole-farm economic models of case study conventional and sustainable farms in each area were used to estimate differences in input purchase and marketing patterns. We found declines in on-farm personal income (returns to farm labor and management) in four of the five case comparisons under a conversion to sustainable farming systems if organic price premiums are ignored; we found increases in three of five cases if applicable organic premiums are included. In all five study areas, total off-farm personal income drops in the portions of local economies connected to farming through backward linkages. It also drops in four of the five study areas in the portions of local economies connected through forward linkages if organic premiums are ignored (all five if organic premiums are included). However, net forward linkage effects are usually much smaller than net backward linkage effects, and on-farm personal income effects are substantially greater than either backward or forward off-farm linkage effects in most cases. The total (on-and off-farm) personal income effect of converting to sustainable systems is positive in only one area without organic premiums, and in one additional area with premiums. The ratio of total to on-farm personal income effects within local economies, considering only first round effects on backward- and forward-linked firms, averages 1.2 without organic premiums, or 0.6 with them. Taking account of more complete multiplier effects, which also consider changes in consumer expenditures and changes in expenditures for supplies by backward- and forward-linked firms, the average is 1.8 without organic premiums, or 0.8 with them. With more time for changes in sustainable production techniques and in the structure of farms and the rural economy, the overall economic effects of conversions to sustainable farming are likely to be more positive than our estimates.

Lessons learned from the Upper Midwest Organic Marketing Project.

The strategic implications of a major, unique effort in the U.S. to expand organic food and agriculture are examined in this article. The authors recently completed an evaluation of the Upper Midwest Organic Marketing Project (UMOMP), funded initially by The Pew Charitable Trusts, and under the guidance of the Midwest Organic Alliance (MOA). The UMOMP was designed to increase the land area under organic production in North Dakota, South Dakota, Minnesota, Iowa, and Wisconsin. On the supply side, the focus was on organic grain, edible bean, and dairy commodities. On the demand side, an increase in organic food consumption was the focus in the Minneapolis-St. Paul metropolitan area. The UMOMP not only encouraged growth in demand, but also aided in the creation of necessary regional organic production, processing, distribution, and retail infrastructure. The UMOMP was generally successful, notably in the increased involvement of mainstream grocery stores in providing and promoting organic food products. Part of this success was due to the MOAs help in forging broker and distributor connections between mainstream stores and regional and national organic suppliers. A broad-based public awareness campaign about organic food and agriculture was another important element in the UMOMP strategy. The organic production and marketing educational effort should help to enable future expansion of organic hectarage. However, serious national or regional strategies to encourage organic farming probably will need other elements as well. Such strategies will involve some fundamental issues about the future structure and nature of organic farming and food systems, e.g., whether organic agriculture can remain centered on small- and moderate-sized family farms that operate in a somewhat independent and entrepreneurial fashion. Whether organic agriculture can be a vehicle for encouraging food systems that are more regional in geographic scope is a related issue. Preserving an organic farming and food system that differs substantially from the presently evolving industrial system may necessitate a slower and more deliberate approach than was used in the UMOMP. However, that could involve some sacrifice in the rate of growth in organic supply and demand.

Mandatory supply controls versus flexibility policy options for encouraging sustainable farming systems

We analyzed two sets of farm policy options, representing different ideological approaches to government involvement in agriculture, to estimate their effects on the relative economic attractiveness of “sustainable” and “conventional” farming systems. The mandatory supply control approach, through strict acreage limitations on program crops, represents a strong government role in commodity supply management. The Normal Crop Acreage approach, on the other hand, allows farmers greater flexibility in deciding what crops to grow. We used economic models of five pairs of case study farms in different agroclimatic areas of South Dakota, covering corn-soybean, spring wheat, and winter wheat growing regions. Mandatory restrictions on the planted acreage of “program” crops, including soybeans, were found to favor the conventional systems, because they induced high prices for crops that predominate in conventional systems, especially com, soybeans, and wheat. In principle, however, mandatory acreage controls could require compliance with certain sustainable agriculture practices. Normal Crop Acreage (NCA) proposals can encourage greater use of sustainable farming systems. Where conventional corn and soybean production is relatively profitable, as in parts of eastern South Dakota, NCA options by themselves appear insufficient to induce changeovers to sustainable cropping systems. In wheat growing areas of northern and western South Dakota, however, where the two systems oflen are about equally profitable, NCA policies could promote sustainable systems, particularly if deficiency payments are not reduced for harvesting legumes and other non-program crops on NCA base. To have this positive effect, NCA policies must be introduced gradually and structured to limit adverse effects on the markets for legumes and other non-program crops that are important in sustainable rotations.

The enduring importance of understanding institutions and values

Papers that pay attention to the socio-economic institutions affecting agricultural change have appeared regularly in this journal. It is important to continue encouraging such papers, as proposals of policies and technology packages for bringing about agricultural sustainability must be grounded in an understanding of both existing institutions and values and the changes needed. The record of my fellow economists in giving due attention to institutions and values over the course of my professional career has, however, been definitely mixed. I was first introduced to institutional economics during graduate school at the University of Maryland in the late 1960s, in particular through the teaching and influence of my major professor, the late Phillips Foster. Foster believed that existing institutions and values were frequently an impediment to agricultural change. I conducted fieldwork for a PhD dissertation in northern India during the autumn/winter period of 1967/1968. My topic was the incentives and disincentives for the adoption of productivity-increasing agricultural inputs, using a broad framework of analysis that accounted for both on-farm profitability and socio-economic institutions. It so happened that the 1967/ 1968 winter (rabi) season was the first in northern India in which there was a coincidence of both favourable irrigation water supplies (after 2 years of severe drought, the monsoons had returned the previous late summer) and fairly widespread availability of the recently introduced high-yielding dwarf wheat variety seeds. The result was a rapid adoption of the high-yielding fertilizer/dwarf wheat input package. My research, and that of others during early stages of the Green Revolution, showed a potentially high profitability of this input package for farmers who had access to irrigation water. Some traditional village institutions such as caste did not appear to be much of a barrier to its adoption. At the same time, however, my broad examination of agricultural institutions revealed some potential constraints. One was the land tenure system that had led to extreme fragmentation of holdings in northern India. My analysis indicated that this was likely to be an impediment to investing in irrigation pumps by many farmers whose holdings were too small and fragmented to efficiently use such pumps, unless there was institutional change such as government-initiated land consolidation. Although I became exposed to the ‘institutional’ perspective at Maryland in the late 1960s, institutional economics was being deemphasized at many other universities at that time. Bright young agricultural economics undergraduates were being encouraged to do their graduate work at universities with a strong reputation in quantitative analytic methods at the time, rather than,