Tradeoffs between Agricultural Production and Ecosystem Services at a Farm Level

1
Trade-offs between Agricultural Production and
Ecosystem Services at a Farm Level
by Seth Somana Steven Kraftb
a. Dickinson State University b. Southern
Illinois University Carbondale
2

• Overview of Presentation
• Introduction
• Research Objective
• Study Area
• Methodology
• Results
• Conclusion

3
Multifunctionality Multifunctionality refers to
the possibility that an economic activity may
have multiple outputs, both commodity and
non-commodity outputs and consequently may
contribute to several societal objectives at
once. Example in agriculture positive
externality (open space, landscape amenities)
negative externality (soil erosion,
eutrophication)
Agricultural landscapes with riparian buffers
have positive multifunctional attributes (Boody
et al., 2005, Jordan et al., 2007).
4
Riparian Buffers provide a variety of ecosystem
services

• Enhance Water Quality
• Provide Terrestrial Habitat
• Provide Stream Habitat
• Flood Control
• Carbon Sequestration

5
Multiple attributes or joint products of riparian
buffers have received considerable attention in
the policy realm.
Problem Public goods
Agriculture contribute to 50 of the land in the
contiguous U.S (Vitousek 1997) most of these
lands are privately owned.
6

• Economic or monetary valuation of ecosystem
  services is difficult due to
• Non availability of a functioning market
• Not all services have a market price (e.g.
  photosynthesis)
• Services are interrelated
• Time consuming
• High Cost

7
Conservation Policies
The U.S. government has made available a number
of federal programs to provide markets for these
ecosystem services by properly managing the
activities within an agricultural watershed. --
Conservation Compliance, Land retirement program,
Working land
NCBI formed in 1997 is a public and private
partnership aimed at helping farmers and
landowners install conservation buffer on their
lands (USDA-ERS 2000). The Goal of NCBI---
install 2 million miles of buffer on
environmentally sensitive lands. By the year 2000
one million miles was installed 2004 1.55
million miles.
8
Decision Environment

• A large number of factors affect land owners
  willingness to change land use decisions to
  capture or maintain environmental benefits
  (Lockeretz, 1990 Napier, 1991 Kraft and Loftus,
  2003)
• Personal characteristics of the farm owner (age,
  education)
• Institutional connection
• Economic factors
• Financial incentives
• Legal rights

9
Research Purpose and Questions

• Develop a methodology to capture the various
  ecosystem services provided by riparian buffers
  and agricultural production on a farm level.

2. How much of these services should be produced
in a socially efficient way on a farm
level?

• How much of commodity and non-commodity outputs
  that could be produced?

3. Develop a trade off between commodity and
non-commodity outputs.
10
Evaluating the trade-offs among multiple
objectives
Agricultural income is more important
Environmental quality and agricultural income are
equally important.
Gross Margin
Production possibilities curve
Environmental quality is more important.
Ecosystem Services
11
Study Area
Cache Watershed encompasses, 1,944km2 of southern
Illinois near the confluence of the Mississippi
and Ohio Rivers. The Watershed has diverse
ecological resources and unique natural
communities. At least 100 state threatened or
endangered plant and animal species are known
within the watershed (USFWS 1990).
Endangered species Cypress and Tupelo swamps

12
The Big Creek is a tributary of the Lower Cache
River with a drainage area of 33,088 acres (51.7
square miles). This stream originates in Union
County in the Lesser Shawnee Hills
PROBLEMS ADDRESSED

• Loss and fragmentation of natural habitat
• Dramatically altered hydrologic systems
• Sediment deposition in the wetlands
• Land use and economic activities that are
  incompatible with the long term maintenance of
  ecological function

13
Methodology

• Integrated Modeling approach
• Modeling based integrative decision making will
  be the methodology that will be used in this
  study.

• Ecosystem services
• -Water quality reduced sediment, N, and P loads
• Wildlife enhancement.
• Economic Gross margin

14
Modeling Framework
15
Evolutionary Algorithms (EAs)

• Simplified models of biological evolution,
  implementing the principles of Darwinian theory
  of natural selection (survival of the fittest)
  and genetics
• Stochastic search and optimization algorithms
• Key idea computer simulated evolution as a
  problem-solving technique

16
Landuse and management choices
Number of landuse and management types 14
Gene Binary string of length 4
17
Multi-objective optimization (MOO) To find a
large number of Pareto optimal solutions with
respect to multiple objective functions.
Multi-objective Optimization Problem
Pareto Optimal Solutions
Many Pareto-optimal solutions

• Goal of MOO
• Find solutions close to Pareto optimum
• Find as many diverse solutions as possible

Maximize
Maximize
18
Water Quality Hydrological Model

• Agricultural Non-Point Source (AGNPS) Pollution
  Model
• USDA lead agency
• AGNPS single event, empirical based distributed
  parameter model
• AGNPS operates on a cell basis
• AGNPS requires 22 input parameters
• To simulate riparian buffer
• -- Curve number (mixed deciduous forest)
  Mannings n 0.005
• C factor (95 vegetative density 75 canopy
  cover)
• Surface condition factor of 1.0

19
Economic Model

• Farm Economic Model based on
• Soil specific Crop yields
• Market Price
• Labor and Machinery Constraints
• Production (operating) costs

• Wildlife Index model

USDA- NRCS Landuse type Tillage type Distance to
streams or water body Distance from forested areas
20
Data

• Digitized Fields for the Big creek watershed
• Soils- SSURGO
• DEM
• Price of crops, yields for various crops based on
  soil types
• Cost of Production
• Labor and machinery cost on a per farm basis
• Nitrogen and Phosphorous application rate

21
Variable Buffer Width
Buffer width 20ft (1.5 x (for each 1
increase in slope)
5.7 of the watershed area (1055 acres)
22
Wildlife Index
Distance from stream Distance from forest Crop
type Tillage type Width of buffer
23
Economic Model
Cost of production and Market Price
Soil Specific Crop yields
Field-Farm-Cell lookups
--to capture the water quality parameters
24
Results Integrated Modeling approach
Population 100 Generation 100 Cross over
probability 0.5 Mutation probability 0.2
---- time approximately 16
hrs
25
Results
Progression of GA
26
Results
Economic profit and Water quality
27

Economic Profit and Wildlife Index
28
Types of PPF relationships
Complementary relation between gross margin and
water quality.
29
--Small farms, on highly sloped areas with low
crop productivity have a complementary
relationship between gross margin and water
quality
30

• Summary of Analysis of tradeoffs done for high
  price scenario
• It was costly to provide more ecosystem services
  as the price of
• commodity increased.
• Most of the profit maximizers and conservationist
  was closer to the PPF indication
  of efficiency.
• With high price scenario all the farm had a
  competitive relationship indicating that with
  high prices it is economically profitable to have
  commodity crops.

31
Watershed scale Analysis
32
Associated Landuse
33
Conclusion

• In this study an integrated modeling approach
  (IMA) was
• developed that can be utilized by various
  decision makers
• in analyzing or designing policies that
  involve multifunctional
• agricultural outputs.
• The study demonstrated that the IMA could be
  effectively used
• to find patterns of landuse and determine
  management choices that
• approximately optimize sets of economic and
  environmental
• objectives.
• The IMA generates PPF for ecosystem service
  production and
• agricultural production at the farm level.
• The IMA also shows that the PPF between water
  quality and
• gross margin can be complementary

34

• With higher commodity prices more of an incentive
  is required
• in the form of governmental
  payment/incentives and cost share to
• promote environmental conservation.

Limitations

• AGNPS as an yearly average even though AGNPS
  calculate
• the water quality for a single event
  rainfall rather than on an
• yearly basis.

35
Questions
Acknowledgements Kanpur genetic algorithm
lab(Debb) NSGA-II source code
Contact Seth Soman email soman.sethuram_at_dsu.noda
k.edu