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Optimal Sustainable Agricultural Decisions: A Mixed Integer Approach

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  • Wicks, Santhi
  • Howitt, Richard E.

Abstract

Soil is a capital asset and a renewable resource that requires continued maintenance to ensure the sustainability of agricultural output in the long-run. Growers are continually adjusting the soil's productivity by adding and extracting soil nutrients, and modifying the soil structure through cultivation. Accordingly, we approach sustainable agriculture in terms of capital assets and switching conditions. A theoretical model focusing on cover cropping and soil nitrates shows that profit maximizing farmers' cover cropping decision depend on the price of nitrogen, cost of chemical nitrogen, cost of cover crops and the farmer decision making horizon. In addition, we show that restriction on application of chemical nitrogen for environmental reasons will increase the value marginal product of cover crops. The results demonstrate the importance of analyzing sustainable agriculture as producing capital assets. We believe that the resulting conditions explain observed farm managers' behavior more accurately than static myopic approaches.

Suggested Citation

  • Wicks, Santhi & Howitt, Richard E., 2005. "Optimal Sustainable Agricultural Decisions: A Mixed Integer Approach," 2005 Annual meeting, July 24-27, Providence, RI 19230, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19230
    DOI: 10.22004/ag.econ.19230
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    References listed on IDEAS

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    1. Caputo,Michael R., 2005. "Foundations of Dynamic Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521842723, November.
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    Cited by:

    1. Boxall, Peter C. & Weber, Marian & Perger, Orsolya & Cutlac, Marius & Samarawickrema, Antony, 2008. "Results from the Farm Behaviour Component of the Integrated Economic-Hydrologic Model for the Watershed Evaluation of Beneficial Management Practices Program," Project Report Series 116268, University of Alberta, Department of Resource Economics and Environmental Sociology.
    2. Chintawar, Sachin & Gabrielyan, Gnel & Westra, John V., 2011. "Effect of Cover Crop Adoption on Nitrogen Use among Conventional and Organic Corn Farms – An Empirical Analysis," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98825, Southern Agricultural Economics Association.

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