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A Dynamic Analysis Of Sustainable Farming Systems In California Agriculture

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  • Wicks, Santhi
  • Howitt, Richard E.
  • Klonsky, Karen

Abstract

The economic viability of alternative and more sustainable agriculture farming systems depend on the value of farm profits. These values may be estimated through short or long-run of profit maximization, but there is a difference in these methods. In short-run profit maximization the instantaneous marginal benefits are equated to the marginal costs of production. Where as in the long-run maximization of profits the capital value of soil resources are quantify in addition to the direct revenues and costs of each system over time. A long-run approach is fundamental to capture the value of capital improvements in soil resources. In this study we use short-run experimental data from SAFS's rotations to calibrate the crop simulation model EPIC, and obtain a time series cross-sectional data set for developing the dynamic bioeconomic models. With data from EPIC we are able to expand the existing short-run analysis, to estimate the long-run profitability and ecological benefits of alternative sustainable farming systems in comparison to conventional systems. Profit maximizing farmers who may not adopt sustainable methods based on short-run returns may well adopt them when long-run capital values are included. Finally, when environmental constraints are imposed on agricultural technology, for example to reduce non-point source pollution, results from our bioeconomic models are expected to show that sustainable technologies are more valuable.

Suggested Citation

  • Wicks, Santhi & Howitt, Richard E. & Klonsky, Karen, 2006. "A Dynamic Analysis Of Sustainable Farming Systems In California Agriculture," 2006 Annual meeting, July 23-26, Long Beach, CA 21444, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea06:21444
    DOI: 10.22004/ag.econ.21444
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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. Curtis, Kynda R. & Bishop, Carol & Harris, Thomas R., 2009. "Economics of Alternative Crop Production in Arid Regions," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48053, Australian Agricultural and Resource Economics Society.

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    Keywords

    Farm Management;

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