Technological change has driven economic progress in agriculture and will continue to play a crucial role in the 21st century. The latest wave of technological change in agriculture is based in molecular biology. Will horticulture participate? Genetically engineered crop varieties have been adopted on a wide scale in some agronomic crops, but horticultural crops face larger hurdles. High costs for research, development and regulatory approval combined with the small acreages planted and the diversity of varieties, will limit the potential for profitable applications of biotechnology to many fruits and vegetables, tree fruits and nuts, and nursery crops. In addition, there are market barriers. Like most important changes in agriculture, modern biotechnology has met with spirited political opposition from some quarters. Threats of political action may discourage food manufacturers and retailers from adopting biotech products that are wanted by some consumers and may be profitable for growers.

In the face of escalating global climate change, the need to mitigate greenhouse gas emissions has never been more pressing. Agriculture is a major source of greenhouse gas emissions, but is also gaining recognition for its potential role to reduce atmospheric carbon dioxide by sequestering carbon in the soil. A recent French initiative called 4 per mille states that if farmers were to increase soil organic carbon (SOC) on their fields by 0.4% per year, that would be enough to offset all annual anthropogenic greenhouse gas emissions and stop further increases in atmospheric carbon dioxide. This initiative highlights that only a small percentage increase in SOC over a large area of land can yield substantial environmental benefits.

Government and industry stakeholders are beginning to recognize the potential for SOC, and are in the early stages of developing carbon markets for SOC. But there are still important scientific and economic questions to be answered. These questions call for further research on how to accurately measure SOC, understand soil capacity for additional carbon sequestration, and how different farm management practices affect SOC and what their associated private and public benefits are. The topic of carbon markets has garnered significant attention due to recent government initiatives promoting climate-smart agriculture and private investment in carbon offset programs. In this dissertation, I bridge the gap between research conducted by soil scientists, who focus on modeling and sampling techniques to better measure SOC, and the work of economists, who concentrate on policy design and the valuation of environmental benefits. My methodology addresses the challenges of accurately measuring soil carbon and examines how these models can be used to inform policy design and efforts to establish sustainable carbon markets in agriculture.

This dissertation examines, in three chapters, the relationship between carbon sequestration, farm management practices, and agri-environmental policy. I analyze the private and public benefits from carbon sequestration on farms in Saskatchewan from 1998 to 2019. To do this, I employ a novel field-level dataset from the Saskatchewan Crop Insurance Corporation (SCIC) that includes detailed information for each field in Saskatchewan: cropping choice, yield, fertilizer use, crop insurance coverage, and the number of seeded hectares.

In Chapter 1, I develop a novel SOC prediction model that builds on the existing models developed specifically for Saskatchewan soils. I examine the case of carbon sequestration in the Saskatchewan prairies, which have experienced substantial increases in SOC over the past 30 years. I use several SOC prediction models to simulate the stock of SOC on fields over time and compare the results. I then compute the external social benefit from carbon sequestration on all insurable hectares by simulating various counterfactual scenarios in which 25%, 50%, and 75% of canola hectares are replaced by summer fallow, representing a reversion to tillage-based systems, and using various values for the social cost of carbon (SCC) ranging from 14 USD/Mg to 185 USD/Mg. During the period 1998–2019, this external social benefit ranges from 481 million to 6 billion USD. Projecting average carbon inputs 150 years into the future yields an estimated external social benefit ranging from 851 million to 30.2 billion USD for the same counterfactual comparisons.

In Chapter 2, I use the SOC data simulated in Chapter 1 to determine the effects of increased SOC stocks on crop yield, productivity, and on-farm profit. I use a dynamic panel regression to estimate the shadow value of SOC and find that increased SOC stocks have a statistically significant and a positive affect on crop yields. Performing dynamic simulations, I compute the on-farm and external social benefits from carbon sequestration that are attributed to selecting a particular crop rotation, and compare these benefits across rotations. I find that adoption of the Canola-Spring Wheat-Peas-Spring Wheat crop rotation leads to a 27.5%, 8.2%, and 4.4% increase in long-term average profit in the brown, dark brown, and black & gray soil zones attributable to increased SOC over 32 years. On-farm benefits from increased SOC are lower for crop rotations with lower carbon sequestering capabilities, highlighting the long-term effects on farm profitability and productivity from selecting particular crop rotations. I compute the external social benefit from the adoption of Canola-Spring Wheat-Peas-Spring Wheat rotation relative to Spring Wheat-Fallow-Spring Wheat-Fallow on all insurable hectares in Saskatchewan from 2023 to 2055, and find benefits amounting to 108 billion CAD when employing a SCC of 185 USD/Mg. I find that the external social benefits from crop rotations that include canola rather than pulses or fallow are greater than the associated private benefits. Hence, selecting crop rotations that have greater SOC sequestration potential not only improves on-farm profitability over time, but also generates sizable environmental benefits.

In Chapter 3, I assess the effectiveness of second-best policies aimed at increasing the stock of SOC by examining a hypothetical policy that subsidizes additional canola hectares differently for each soil zone in Saskatchewan. To analyze the effect of these subsidies, I develop a simulation model that includes on-farm acreage responses and a SOC state equation to measure changes in SOC stocks due to alterations in land-use. I find that a policy offering optimal subsidies specific to each soil zone for additional hectares of canola, implemented in 2019 and continuing indefinitely for all insured fields in Saskatchewan, generates an external social benefit worth 15.2 billion CAD when the subsidy is set to maximize the net external social benefit (NESB), and 30.4 billion CAD when it is set to maximize the change in total welfare. These benefits are calculated using acreage responses estimated by a nested logit model with field-level data from the SCIC, and an annual carbon rental rate computed using a SCC of 185 USD/Mg. The NESB is the public benefit from carbon sequestered by increasing canola hectares minus policy costs, while the change in welfare is the NESB plus the change in producer surplus. This chapter quantifies the potential environmental and social benefits from implementing second-best policies that aim to increase SOC stocks by subsidizing changes in cropping choices.

Faced with the task of reorganizing the largest agricultural research system in the world, officials in China are developing a strategy for reform. This paper investigates economies of scale and scope and other potential sources of improvements in the economic efficiency of crop breeding, an industry at the heart of the nation's food economy. Using a panel data set covering 46 wheat and maize breeding institutes from 1981 to 2000, we estimate both single output and multiple output cost functions for the production of new varieties at China's wheat and maize breeding institutes. Our descriptive and analytical results indicate strong economies of scale, along with small to moderate economies of scope related to the joint production of new wheat and maize varieties. Cost efficiency increases significantly with increases in the breeders' educational status and with increases in access to genetic materials from outside the institute. Our results can help guide reformers in their efforts to increase the efficiency of China's crop breeding system.

Results of a study conducted to assess some of the benefits to industry, consumers, and the community resulting from UC's investment in research and extension programs in pest management. Includes an analysis of the impact and benefits of the development and extension of integrated pest management (IPM) programs. Includes case studies in the key crops of almonds, cotton, oranges, processing tomatoes, and lettuce.

This is an unaltered scan of the original print edition (UC ANR publication 3482).

The U.S. pistachio industry, located almost exclusively in California, has grown substantially over the past thirty years and now occupies an important and growing share of the world market. In recent years, a group of growers led an initiative to establish a federal marketing order, which will work to assure consistency in the quality of California pistachios and thereby increase consumer demand and confidence in the product and enhance producer returns. The marketing order, scheduled to take force in August 2005, will establish a maximum aflatoxin tolerance level, maximum limits for defects, a minimum size requirement, and mandatory inspection and certification. The intention is to provide some quality assurance to buyers so as to offset the negative consequences of concerns over the potential for a food scare affecting pistachios, as well as to reduce the odds of an aflatoxin event and a food scare affecting pistachios, and to mitigate the consequences if an event should occur.

This monograph reports the results of an ex ante assessment of the likely costs and benefits of the marketing order program. In order to assess the costs and benefits accruing to the various groups, we developed a stochastic simulation model of supply and demand for California pistachios, designed to allow us to represent the introduction of the federal marketing order for California pistachios. The study revealed that the measured benefits to producers, the nation, or the world always well exceeded the corresponding measure of costs, typically by many times. The benefit-cost ratios were generally greater than 3:1 and often greater than 6:1, which means there is substantial leeway to accommodate potential errors in assumptions and yet have favorable findings. In present value terms, the benefits to producers were estimated in the baseline scenario at $75.3 million. Sixty percent of the overall benefits, $115.9 million, would accrue to domestic consumers. These are significant values, and are large relative to the cost of compliance with the program, which is a very small amount—about half of 1 percent of the current value of domestic sales.

Farm Subsidies and Obesity in the United States.

The USDA Organic Seal: What Is It Worth to the Consumer?

Market is Strong for California Processing Tomatoes.