Chapter 17 Conservation and Protection of Natural Resources

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Chapter 17Conservation and Protection of
Natural Resources

• Rosalie Bleasdale

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Problem

• It was believed that natural resources were being
  used too rapidly and political controls should be
  instituted to conserve resources for future
  generations.

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New Programs

• Forest Service
• Grazing Service
• Fish and Wildlife Service
• Soil Conservation Service
• Natural Resource Conservation Service

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Conservation

• Involves a capital investment.
• It is a problem of choosing among alternative
  patterns of resource use over time.

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Common Property vs. Private Property

• Private ownership encourages resource owners to
  conserve for the future.
• So long as property is transferable, the current
  resource owner will have an incentive to consider
  future generations.
• When ownership is transferable, the market value
  of the farmers land will increase in
  anticipation of a future harvest.

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The Market and Resource Crisis

• A price system is a way to ration scarce
  resources over time.
• It is in an owners interest to use the resource
  in a way that will maximize wealth over the
  present value of the resource.
• Historically perceived economic crisis were
  solved by freely-functioning markets with
  individuals acting in their own self-interest.

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Contd

• Natural resources are not fixed in amount but are
  functions of capital accumulation, science, and
  technology.
• Trends in mineral prices actually tell a tale of
  decreasing scarcity of mineral resources.
• Market prices are more likely to take into
  account expectations about future economic
  conditions more accurately than can be done
  through central direction.

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Time preference

• Refers to the value placed on consumption in the
  near future relative to the more distant future.
• For example, if a decision-makers RTP is high,
  the individual is willing to forego a relatively
  large amount of future income in order to obtain
  income in the present time period.

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Soil Erosion

• New soil conservation programs were instituted in
  the 1980s.
• Conservation provisions were further expanded in
  the 1996 and 2002 farm bills.
• Surveys completed by the SCS show that soil
  erosion does not actually pose an immediate
  threat to the nations ability to produce food
  and fiber.

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Possible reasons for the problem

• Farmers allegedly lack knowledge concerning the
  effects of soil erosion.
• Farmers renting land overexploit soil resources.
• Runoff creates externality problems associated
  with land use.

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Responses to the possible reasons

• The success of US agriculture over time is
  evidence that farmers are knowledgeable and
  competent enterprises.
• The erosion of US cropland has decreased ¼ since
  the task force report.
• Landowners, even when renting, have a large stake
  in maintaining soil resources.

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Contd

• Government efforts to reduce soil erosion have
  been justified mainly on the basis of
  externalities.
• A spillover occurs when an action by one person
  infringes on the property rights of another.
• The presence of spillover effect does not imply
  that there is a spillover problem that warrants
  action through the collective-choice process.

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The NRCS

• Primary purpose is to assist land users,
  communities, units of state and local government,
  and other federal agencies in planning and
  implementing conservation.
• The stated goal is to reduce erosion, improve
  soil and water quality, improve and conserve
  wetlands, enhance fish and wildlife habitat,
  improve air quality, improve pasture and range
  condition, reduce upstream flooding, and improve
  wetlands.

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Protection of Agricultural Land

• Property Tax Relief
• Right-to-Farm Legislation
• Agricultural Districts
• Purchase of Development Rights

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Market vs. Central Direction

• Information Problems
• The basic problem in the allocation of land
  among competing uses is how to employ the
  knowledge of all affected members of society to
  secure the most economic use of land resources.
• There is a loss of valuable information when
  land-market signals are overridden by
  administrative land-use controls.

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Contd

• Incentive Problems
• Low-income and other groups that participate
  least effectively in the political process are
  likely to be most disadvantaged by political
  land-use controls.
• There is also a problem in obtaining an
  objective evaluation of the relative advantages
  of the alternative measures available for
  affecting land use.

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Conclusion

• When transaction and information costs are taken
  into account, however, little if any basis exists
  for thinking that a greater government role in
  protecting land and soil resources is warranted.
• Freely functioning land markets will eliminate
  inappropriate loss of farmland, excess soil
  erosion, and other crisis affecting
  agricultural land, just as the market has
  eliminated resource crises in the past.