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4 Economic Evaluation of Alternative Farming Systems | NTEREST IN AUERNATIVE FARMING SYSTEMS iS often motivated by a desire to reduce health and environmental hazards and a commitment to natural resource stewardship. But the most important criterion for many farmers considering a change in farming practices is the likely economic outcome. Wide adoption of alternative farming methods requires that they be at least as profitable as conventional methods or have significant nonmonetary advantages, such as preservation of rapidly deteriorating soil or water re- sources. Economic performance can be improved in several ways: Lowering ner unit expenditures on production inputs; ~ o r -- ~ -r ~ -- - r - Increasing output per unit of input; Producing more profitable crops and livestock; Reducing capital expenditures on machinery, irrigation equipment, and buildings; Reducing natural crop and animal losses; Reducing income loss through commodity price fluctuations; and Making fuller use of available land, labor, and other resources. Several economic analyses of alternative farming systems were conducted in the 1970s. A review found most of these studies were methodologically flawed, however, and used prices, technologies, and policies that are of limited relevance today (Lockeretz et al., 1984~. In particular, energy and land values have fallen, real interest rates have risen, inflation has slowed, cash market commodity prices have generally declined beginning in 1982, and a wide range of government policies have exerted greater influence on farmer decision making. These factors are dynamic and constantly influence agricultural producers and policies. Nonetheless, a growing body of contemporary data supports the eco- 195

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196 ALTERNATIVE AGRICULTURE nomic viability of alternative farming practices and systems. The committee reviewed and interpreted available literature on the economics of alternative methods and systems, focusing on the general areas of pest control, ~liver- sification, nutrient sources, and the effect of government and market price structures on the adoption of alternative practices. Economic findings from the case study farms are presented in this chapter. ECONOMIC ASSESSMENTS OF ALTERNATIVE METHODS Understanding the overall economic implications of alternative farming systems requires research at several levels, including individual components of crop and livestock enterprises, whole-farm studies, and national and international analyses. Traditionally, most evaluations of the economic impact of adopting alter- native farming practices have focused principally on the cost and returns of adopting a specific farming method. For example, many studies at the farm level have estimated the economic benefits of integrated pest management (IPM), crop rotations, and manure management options. Such studies gen- erally assume no other changes in the farm operation, input or output, or prices. These studies fall into a broader literature on farm management that employs partial budget analysis techniques. Fewer studies have considered the impact of alternative farming systems on the economic performance of the whole farm. At the aggregate level, the committee could identify no useful studies of the potential effects of wide- spread adoption of alternative agricultural systems. Most aggregate studies are flawed in their methods and assumptions regarding the effectiveness of alternative systems and the impact of com- modity policy on farm management. The common approach has been to compare conventional farming practices with the economic performance of a similar farm, assuming total withdrawal of certain categories of farm inputs. These studies usually assume or project substantial reductions in per acre yields in many crops and then project the effect of these reductions in the context of strong export demand and limited commodity supplies. These assumptions and conditions often result in projected food production shortfalls that do not accurately reflect the constant change of markets or the production capabilities of many available alternative systems. The com- mittee could identify no aggregate studies that compare the costs and benefits of conventional agriculture with successful alternative systems. Such analyses are needed but wig be complex, involving a wide range of factors. Economic Stubbles of Farming Practices Economic analyses of single enterprises or their components usually em- ploy partial budgeting techniques that estimate the change in production costs, profits, and risks accompanying a specific change in farming practice

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ECONOMIC EVALUATION 197 (BoehIje and Eiuman, 1984~. Results are often expressed as a change in the net return over cash production costs per acre or per unit of output. Meth- odologicaBy, partial budget studies focus on short-term net returns, includ- ing labor, and generally do not take into account off-farm impact or long- term changes in the productivity of the natural resource base. They also assume no change in farm size, enterprise combinations, prices of commod- ities or inputs, or other variables. Despite these limitations, this method is practical and easy to understand. Partial budget Study findings can be augmented by drawing on additional analyses from specialists in biology, ecology, and physical science. In recent years, biological, physical, and social scientists have made much progress in their collaborative research efforts in developing new methodologies for estimating the economic consequences of farming systems and practices. Partial budgeting is reported to be the most widely used method of estimating changes in income of an indiviclual farm as a result of adopting IPM (ADen et al., 1987; Osteen et al., 1981~. The landmark research on the economics of crop rotations by Heady (1948) and Heady and Jensen (1951) was based essentially on the partial budgeting approach, because the only aspect of the farm operation assumed to vary was the crop rotation. Con- temporary research that includes a greater consideration of biological and . ~ ~ ~ , . . . . . . . , ~ . . . . . economic factors IS presented later in this discussion (molested and Young, 1987; Helmers et al., 1986~. The review by Allen et al. (1987) of the agricul- tural, economic, and social effects of TPM is another example of the multi- disciplinary approach to partial budgeting analysis. Whol - Farm Analysis of Alternative Methods Frequently, a farming method that appears profitable when analyzed at a component level may prove less attractive from the perspective of the whole farm, particularly in relation to other possible practices or combinations of practices. Analysis at the whole-farm level recognizes that a farmer's decision to aclopt one or more farming practices is not made in isolation from the rest of the farm enterprise. Perhaps the most important factor in adopting any management system or combination of crops is the net return to the farm family. The successful commercial farmer must assess the compatibility of proposed alternative practices with other practices already in place, taking into account a farm's physical and biological resources and anticipated changes in crop yields, livestock productivity, production costs, farm pro- grams and policy, and labor and machinery requirements. These and other factors will strongly affect the farm operator's cash flow and the farm's profitability and long-term economic viability. Whole-farm studies typically use one of two approaches: linear budget (risk programming) or overall farm surveys. Both approaches attempt to examine the effect of different farming practices or production systems at the farm level, taking into account aD components of the farming system

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198 ALTERNATIVE AGRICULTURE and operation, such as land-use patterns, pest control practices, and nutri- ent management. Microeconomic programming or planning models analyze farm decision making based on particular resource and financial assumptions as wed as estimated relationships between management choices and crop or animal production levels. The usefulness and validity of these models depend on the availability of reliable experimental or empirical data on input and output relationships in specific agricultural systems. When such data are ~ , ~ _ . . . ~ . . . a ~ present, whole-tarm planning models can analyze tne economic conse- quences of a wide range of alternative production systems. A principal objective of the committee's research recommendations is the development of such a knowledge and information base (see the Executive Summary). Partial- and whole-farm analyses can take a short- or long-term perspec- tive. For short-term analyses, some resources and technologies are assumed fixed, and management decisions are made among existing alternatives. Long-term studies are more complex and difficult because many more vari- ables are changeable, including technologies and policies. A critical need identified by the committee is expanded multidisciplinary research on Tong- term technological trends and policy changes and how these trends and changes are likely to influence the relative costs and benefits of various farming systems. For example, the committee suspects that biotechnology will greatly increase technological options in support of alternative agricul- tural systems, and that society's environmental and public health goals will tend to support producers successfully adopting these technologies. The committee cannot go further in quantifying these trends, however, because the necessary knowledge base and analytical framework do not exist. Farm surveys are based on empirical measures of the performance of agricultural production systems. It is often difficult to draw cause and effect inferences from surveys, however. For example, farm operators' (echnologi- cal choices and management abilities greatly influence profitability. But it is difficult to separate the contribution of technology from that associated with managerial skis. Nonetheless, the performance of agricultural systems as captured in well-designed surveys implicitly reflects the interaction of these factors. Experimental data on alternative agricultural systems are clearly lacking, and relatively few weD-designed surveys have been undertaken. The literature is beginning to grow, however, and a number of solid studies have reached conclusions indicating the prospective economic benefits of alternative production systems. The Transition to Alternatives Most economic studies of alternative production at the whole-farm level take a static approach, ignoring the year-to-year difficulties associated with the transition from one system to another. Moreover, the assumptions used generally ignore uncertainty stemming from the weather, crop yields, man-

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ECONOMIC EVALUATION 199 agement skills, prices of inputs and products, government policies, and other variables. As a result, these studies must be interpreted cautiously. Several whole-farm studies have examined the financial impact of chang- ing from conventional to alternative farming practices (Hall, 1977; Osteen et al., 1981; Reichelderfer and Bender, 1979~. These studies recognize that a farm's economic performance can change significantly during a multiyear evolution from conventional to alternative practices (Dabbert and Madden, 1986~. Many factors can influence the economic performance of farms during the transition to alternative practices. The use of certain kinds of pesticides and fertilizers may have disrupted natural predators and other biota. Reesta- blishing these populations and the balance among them can occur quickly or require several years (Koepf et al., 1976; U.S. Department of Agriculture, 1980~. Although crop rotations will generally increase yields, decrease pes- ticide costs, and, in the case of legumes, decrease fertilizer costs, the full benefits of crop rotations may take several years to materialize. Depending on the prices of farm commodities and inputs, adoption of a rotation some- times reduces net farm income, particularly during the initial years of a transition (Dabbert and Madden, 1986~. For example, including a forage legume in a rotation may not sufficiently decrease production costs and increase the yields of cash grain crops to compensate for the reductions in their acreage especially when cash grain prices are supported far above market levels (Duffy, 1987; Goldstein and Young, 1987~. Farmers may also need a few years of experience to acquire the additional knowledge and management skills necessary for more diversified operations. The economic impact of a farmer's decision to change from conventional to alternative farming methods on all or part of a farm operation will vary depending on factors such as climate, soil type, crops and livestock produced, cropping history of the farm, the farmer's skills, and many other considerations. Because of these factors, most farmers adopt alternatives gradually. A1- though the transition may be difficult, successful alternative systems tend to reduce variability of net returns (Helmers et al., 1986~. The consistency of yield and return to the farm family is a potential benefit of alternative agriculture that deserves further study. Comparative Regional Cost of Production Production cost per unit of output is one of the most important short- term measures of the economic performance of an agricultural operation, production system, or sector. Comparing per unit production costs for a given crop by region is a good indicator of regional absolute advantage or the inherent suitability of an area or farm for the profitable production of a given crop. Another common measure production costs per acre is widely used in comparative analyses. This measure, however, differs significantly from per unit production costs. Per acre costs do not take into account the actual

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200 ALTERNATIVE AGRICULTURE TABLE 4-' Regional per Bushel and per Acre Production Cost Estimates and Yields, 1986 Crop Corn Belt- Great Lakes Southeast Corn Total variable costs (dollars) Per bushel 0.93 1.81 Per acre 118.68 120.15 Yield/acre (bushels) 126 66 Soybeans Total variable costs (dollars) Per bushel 1.31 3.15 Per acre 49.93 67.89 Yield/acre (bushels) 37 21 NOTE: The Corn Belt and Great Lakes region includes Minnesota, Wisconsin, Michigan, Iowa, Missouri, Indiana, Illinois, and Ohio. The Southeast region includes Kentucky, Tennessee, Alabama, Georgia, South Carolina, North Carolina, and Virginia. SOURCE: U.S. Department of Agriculture. 1987. Economic Indicators of the Farm SectorCosts of Production, 1986. ECIFS 6-1. Economic Research Service. Washington, D.C. yields harvested; they reflect the level of inputs applied on a per acre basis. Consequently, per acre production costs do not as accurately reflect the productivity of a cropping system or an area for a particular crop. Likewise, high per acre costs for fertilizer and pesticides do not necessarily indicate high per unit costs or low productivity. For example, farmers in highly productive corn-growing regions generally use more fertilizer and other inputs per acre because they can afford it based on the high yields they will achieve, not because the area is unsuited to corn production. This is partic- ularly true when market or government support prices are high. In contrast to the limitations of per acre costs, per bushel costs are good indicators of an area's suitability for production of a given crop. The exam- ple in Table 4-1 shows this and indicates the superiority of per unit produc- tion cost figures in defining the productivity of regions. The Corn Belt- Great Lakes region is highly suited to corn and soybean production in terms of rainfall, soils, and temperature, particularly in contrast to the Southeast region. Per acre production cost estimates, however, do not reveal this advantage as clearly as per unit production costs do; the total per acre variable costs are similar for these regions. The same costs expressed on a per bushed basis, however, show that it requires far less cash expenditure to produce a bushel of corn or soybeans in the Corn BeTt-Great Lakes region than in the Southeast. Table 4-2 shows total variable costs and fertilizer and pesticide cost estimates per unit of production for various regions produc- ing corn, soybeans, and hard red winter wheat. Per unit production costs reflect what actually happens during a given growing season. Many things, such as too much or too little rain, cold

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202 ALTERNATIVE AGRICULTURE spells, pests, hail, or soil fertility problems, can affect productivity in farm- ing. These factors, as well as diverse soil types, climates, and levels of pest infestation, often account for large regional differences in per unit costs for a given crop, despite fairly similar per acre production costs. Increased efficiency and lower per unit production costs are essential for agricultural producers to remain competitive in domestic and international markets. Alternative systems can often help achieve these goals. To better understand the role and viability of specific alternative agriculture systems, however, far greater knowledge of regional differences in production costs, their variability, and their causes is needed. Such understanding will help Explain how and why some farmers within regions and in different regions of the country can produce a given crop at markedly lower per unit costs than their neighbors or producers in other regions; Identify the production cost advantages and disadvantages stemming from soil, water, weather, pests, and other natural factors; Target technologies, management approaches, and policy decisions that most effectively reduce these costs and make the most of regional ad- vantages; and Better understand how commodity, conservation, regulatory, and other policies influence on-farm management decisions and production costs. methods for Comparing Production Costs A variety of farm accounting systems and methods can be used to calcu- late per acre and per unit production costs. Most farmers use some system of recor~keeping to track expenditures and determine profits and losses at the end of each season. Most states and the U.S. Department of Agriculture (USDA) collect and analyze farm budget data. A variety of private organizations have devel- oped recor~keeping systems that farmers can use for estimating cash flow, working with lenders, tracking returns to certain investments, identifying areas where profits could be increased, and preparing income tax state- ments. Some lenders require these records. Many of these recor~keeping systems are very sophisticated and have been used to study the distribution of per acre and per unit production costs for major commodities. The quality of individual farmers' recor~keeping, however, has a great effect on the quality of the data reported. The committee has reviewed several farm budget and cost of production studies, including Southwestern Minnesota Farm Business Management Association data, Southwest Kansas Farm Management Association data, and data compiled and published by the USDA. Reports by these and other organizations use a variety of different meas- ures, assumptions, and formats in collecting, analyzing, and reporting data. They are not random samples and do not generally employ sampling tech- niques. As a result, care must be exercised in drawing inferences from data

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ECONOMIC EVALUATION 203 and findings associated with different data sets. To the extent possible, the USDA tries to use consistent definitions and accurate methods in its pub- lished reports on state average production costs. The level of aggregation reported, however, masks much of the variability within states in the costs incurred on incliviclual farms. Additional insights can be extracted from analyses of comparative pro- duction costs on particular groups of farms within a given region. A com- mon analytical approach is to separate a sample of farms producing a given crop into groups based on a given indicator or particular farm characteristic. The results of one such analysis of drylanct wheat farms in southwest Kansas are shown in Table 4-3. The sample of 3,000 farms was divided into quartiles by income. The first column in the table reports average yields, costs, and acreage for the 750 farms or 25 percentreporting highest income; the second column reports the same information for the 750 farms reporting the lowest income. These data show Low-income farms incur per unit production costs nearly twice those of high-income farms ($3.66 versus $1.87 per bushel). The yields on low-income farms are about 9 percent less than on the high-income farms even though the per bushel production costs are almost double. All variable costs per acre were greater on the low-income farms. The per acre differential was greatest for machinery hire ($7.57), fertilizer ($7.53), machinery repair ($6.02), and herbicides and insecticides ($5.28~. Insights into the potential benefits of certain alternative production sys- tems arise from identifying the cost factors that tend to distinguish high- income low-cost producers from less profitable but otherwise similar farms. Some important factors contributing to higher per acre costs in Kansas wheat production and corn and soybeans grown in southwest Minnesota are summarized in Table 4-4. The difference in fertilizer and pesticide per acre and per bushel production cost for high-cost and low-cost corn and soybean farms in Minnesota are presented in Table 4-5. Per bushel fertilizer and pesticide costs were 144 percent greater for high cost soybean farms in 1986 and 60 percent greater on corn farms in 1987. Variable costs associated with machinery and repairs are also consistently high on low-income farms, in part because these farms are smaller on average and machinery costs are spread over fewer acres. These data are consistent with national average cost of production data for major crops (Table 4-6~. Alternative Agriculture and Production Costs Alternative production systems are designed to enhance beneficial biolog- ical interactions and improve economic performance through better nutrient management and pest control. When successfully adopted, most alternative systems greatly influence fertilizer and pest management costs (see all case

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204 ALTERNATIVE AGRICULTURE TABLE 4-3 Cost of Production for Dryland Wheat in Southwest Kansas, 1986 - 25 Percent of Farms 25 Percent of Farms with Highest Income with Lowest Income Costs (per acre) (per acre) Crop production costs Hired labor $ 4.02 $ 4.35 Repairs 8.90 14.92 Seed crop insurance 2.17 3.18 Fertilizer-lime 2.62 10.15 Machine hire 8.09 15.66 Storage-marketing 1.68 3.97 Fees-conservation-auto expenses 1.06 3.14 Gas-fuel-oil 6.91 9.99 Personal property tax 0.27 0.46 General insurance 0.45 1.13 Utilities 1.31 2.27 Herbicide-insecticide 1.19 6.47 Interest on operating costs (12%) 3.48 6.81 Interest on machinery investment (12%) 3.62 5.31 Total operating costs $ 45.77 $ 87.81 Depreciation Motor vehicles $ 13.01 $ 12.69 Machinery 3.98 9.13 Buildings 1.50 5.01 Total depreciation $ 18.49 $ 26.83 Total production costs $ 64.26 $114.64 Total production costs/bushel $ 1.87 $ 3.66 Management, labor, and land costs Management chargea $ 4.17 $ 3.81 Operation, unpaid labors 10.12 20.44 Land charge' 27.82 25.40 Total management, labor, land costs $ 42.11 $ 49.65 Total management, labor, land costs/ bushel $ 1.23 $ 1.58 Total costs $106.37 $164.29 Total costs/bushel $ 3.10 $ 5.24 Wheat acres 1,482 734 Wheat yield/acre (bushels) 34.35 31.36 . . as percent of yield per acre times $2.43 per bushel. b$15J000 per operator divided by wheat acres. C33.33 percent of yield per acre times $2.43 per bushel. SOURCE: B. L. Flinchbaugh, Kansas State University, correspondence, 1988.

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ECONOMIC EVALUATION TABLE 4-4 Major Inputs Resulting in Higher per Acre Costs: High-Cost Farms Versus Low-Cost Farms, Selected Studies 205 Difference In Variable Costs Between High- and Low-Cost Farms Year Dollars/ Percentage of Total Location/Crop Input Acre Difference 1985 Repairs 4.46 20.9 Kansas/wheat Machine hire 2.65 12.4 Fertilizers 1.59 7.5 Pesticides 0.99 4.6 1986 Machine hire 7.57 18.0 Kansas/wheat Fertilizers 7.53 17.9 Repairs 6.02 14.3 Pesticides 5.28 12.6 1986 Pesticides 5.09 24.1 M~nnesota/soybeans Repairs 3.01 14.2 Fertilizers 0.24 1.1 1987 Repairs 19.37 36.3 Minnesota/corn Fertilizers 8.00 15.0 Pesticides 4.61 ~ ~ SOURCES: Kansas Cooperative Extension Service. 1987. The Annual ReportManagement InformationKansas Farm Management Associations. Manhattan, Kans.: Kansas State University; Olson, K. D., E. J. Weness, D. E. Talley, ~ A. Fates, and R. R. Loppnow. 1987. 1986 Annual Report, Revised. Southwestern Minnesota Farm Business Management Association. Economic Report ER8724. St. Paul, Minn.: University of Minnesota; Olson, K. D., E. J. Weness, D. E. Talley, F! A. Fates, and R. R. Loppnow. 1988. 1987 Annual Report: Southwestern Minnesota Farm Business Management Association. Economic Report ER88-4. St. Paul, Minn.: University of Minnesota. studies). Regional cost of nrodllotinn Ctil~i~ hack an Err rm~nr~l~c~i-~ ~ -or or- we'd ~~ ~~llt,5~ systems (Goldstein and Young, 1987; Kansas State University, 1987; Olson et al., 1981, 1986, 1987) and the committee's limited case studies indicate that the most profitable alternative and conventional farms are often those that successfully cut back on fertilizer, pesticide, and machinery expenses while sustaining high levels of crop production. The extent and causes of variability in production costs warrant careful study in assessing agricultural commodity, conservation, and regulatory policies. High target prices, deficiency payments, and disaster provisions that compensate farmers for crop losses are principal causes of inefficient input use. Current farm programs base payments on historical per acre yield levels, multiplied by a per bushed deficiency payment rate. The per bushel deficiency payment is the difference between the government-set target price and loan rate or the market price, whichever difference is less. When deficiency payments are large, during periods of protracted low crop prices, farmers have greater incentive to apply fertilizers and pesticides in greater amounts to produce the most bushels per acre and collect the

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234 ALTERNATIVE AGRICULTURE TABLE 4-11 Estimated Fertilizer and Pesticide Use for Conventional Management and PALSa Fertilizer (pounds/acre) Crop Pesticides N P S Rate Insecticide Rate Herbicide (units/acre) or Fungicide (units/acre) Conventionalb Winter wheat 130 30 25 Spring barley 80 0 0 Winter wheat 130 30 25 Difenzoquat methyl sulfate Bromoxynil Triallate Bromoxynil Difenzoquat methyl sulfate 3.0 pints Benomyl 1.5 pounds 1.5 pints 1.25 quarts 1.5 pints 3.0 pints Benomyl 1.5 pounds Bromoxynil 1.5 pints Spring peas O O O Triallate 1.25 quarts Phosmet 1.5 pounds D~noseb-am~ne 0.8 pounds PALS Peas + medic O O O Triallate 1.25 quarts Phosmet 1.5 pounds D~noseb-am~ne 0.8 pounds Medic 0 0 0 0 0 0 0 Winter wheat O O O O O O O Perpetuating alternative legume system. A low-input system with a three-year pea plus medic-medic-wheat rotation with pesticides used only on peas. Four-year wheat-barley-wheat-pea rotation with fertilizer and pesticide inputs each year. SOURCE: Goldstein, W. A., and D. L. Young. 1987. An agronomic and economic comparison of a conventional and a low-input cropping system in the Palouse. American Journal of Alternative Agriculture 2(Spring):51-56. A more common crop sequence in the Palouse is a 4-year rotation of wheat-barley-wheat-peas (W-B-W-P). In this rotation, it is necessary to use two herbicides as well as a systemic fungicide application for each crop. The pesticides applied to the peas include the same insecticide used in the pea crop year of the PALS rotation. Fertilizer applied to the conventional 4-year rotation includes 130 pounds of nitrogen, 30 pounds of phosphorus, and 25 pounds of potassium per acre. The barley receives 80 pounds of nitrogen per acre. No fertilizer is applied in the PALS rotation. Input costs per year are dramatically higher in the conventional system, at $129.40 per acre compared with $56.82 per acre for the PALS system. The majority of this difference is comprised of fertilizer and pesticide costs that are $57.52 per acre greater for the conventional system (Table 4-12~. In contrast to input costs, annual crop yields were similar during 2 trial years at three sites. PALS wheat yields averaged 62.6 bushels per acre compared with 60.3 bushels on the conventional plots. The largest differ- ences occurred during the drought of 1985; yields for the PALS experimen- tal plots averaged 83 percent more than those of the conventional plots. In 1984, when rainfall was close to normal, the PALS wheat yields were 3 percent less than the conventional yields.

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ECONOMIC EVALUATION TABLE 4-12 Costs of Conventional and Alternative Rotations per Acre of Rotation per Year 235 Costs/Acre (dollars) Conventional PALSb Inputs (W-B-W-P)a (P/M-M-W) Fertilizers and pesticides 72.52 15.00 (application and product) Field operation 45.44 35.00 (tillage, planting, and harvest) Overhead and crop insurance 11.44 6.82 Total 129.40 56.82 Average yield of winter wheat 60.3 62.6 (bushels/acre) aFour-year wheat-barley-wheat-pea rotation with fertilizer and pesticide inputs each year. Perpetuating alternative legume system. A low-input system with a three-vear nea olus medic-medic-wheat rotation with pesticides used only on peas. - a--- r--r-~~ SOURCE: Goldstein, W. A., and D. L. Young. 1987. An agronomic and economic comparison of a conventional and a low-input cropping system in the Palouse. American Journal of Alternative Agriculture 2(Spring):51-56. In three out of four scenarios, including market price and government program price assumptions, the PALS rotation was equal or more profitable on a per acre basis than the conventional rotation. The conventional system is significantly more profitable than the PALS rotation only under high- yielding (good weather) conditions with government price supports (Table 4-13~. Profits are greater in this instance primarily because a greater per- centage of the acreage (75 percent of the total) produces government-sup- ported crops. Under low-yielding conditions, the productivity of the con- ventional rotation is reduced to such an extent that, even assuming government support prices, the net income of the two systems is roughly equivalent. Assuming market prices and no government program payments or requirements, the PALS rotation is always more profitable. IMPACT OF GOVERNMENT POLICY Crops eligible for price and income supports are planted on more than 70 percent of the cropland in the United States. These include feed grains, wheat, cotton, rice, soybeans, and sugar. From 80 to 95 percent of the acres producing these crops are currently enrolled in federal programs. Dairy farmers also enjoy income protection through a price support program, import quotas, and marketing orders for milk. The marketplace has more of an influence on prices of other commodities such as fruits, vegetables, livestock, poultry, and hay and forage crops. However, many factors influ- ence the supply and demand for these commodities as well as practices used to produce a crop. Grading and cosmetic standards, for example, are

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236 ALTERNATIVE AGRICULTURE TABLE 4-13 Gross Returns, Variable Costs, and Net Returns (dollars/acre of rotation/year) Under Conventional and PALS Management, High and Low Yielding Conditions, and Market and Target Prices, 1986 Conventionala PALSb High Yield Low Yield High Yield Low Yield 1986 Market prices Gross returns 176.00 136.00 118.00 93.00 Variable costs 129.40 129.40 56.82 56.82 Net returns 46.60 6.60 61.18 36.18 1986 Government target prices Gross returns 274.20 210.60 170.80 132.60 Variable costs 129.40 129.40 56.82 56.82 Net returns 144.80 81.20 113.98 75.78 aFour-year wheat-barley-wheat-pea rotation with fertilizer and pesticide inputs each year. Perpetuating alternative legume system. A low-input system with a three-year pea plus medic-medic-wheat rotation with pesticides used only on peas. SOURCE: Goldstein, W. A., and D. L. Young. 1987. An agronomic and economic comparison of a conventional and a low-input cropping system in the Palouse. American Journal of Alternative Agriculture 2(Spring):51-56. applicable to various fruit, vegetable, and meat products. These standards are basically designed to control supply and price of individual crops. Acreage reduction programs influence the amount of land available to pro- duce hay crone; water pricing policies affect costs of production on irrigated ~ ~ ~ ~ ~ ~~ . . ~ ~1 ~ ~ ~ ~ ~ crops. trade policies here and abroad attect tne row or farm commodes into and out of the U.S. market. Government price and income support programs can have significant unintended effects. During the early to mid-19SOs, the programs tended to price U.S. exports out of highly competitive world markets because federal support prices (the loan rates) were held rigidly high during a period of declining world market prices. The programs have also encouraged surplus production of certain commodities by reducing risks. They have provided economic incentives for farmers to continue to grow certain crops, even in periods of surpluses. Over the years, the programs also have contributed to soil erosion and surface water and groundwater pollution by encouraging the cultivation of marginal lands and subsidizing excessive and inefficient use of inputs. Further, producers pay no price for offsite environmental consequences of production. In many parts of the United States, producers now routinely strive for higher yields than those profitable in the absence of government programs designed to reduce risk. In other areas farmers grow crops with a high risk of failure from weather or pest conditions because government programs absorb all of the risk. The price support payment that a farmer receives per acre is based on the farm's historical yields, an average of the yield on supported crop acreage

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ECONOMIC EVALUATION 237 in the previous 2 to 5 years (frozen at 90 percent of 1985 program payment yield in the Food Security Act of 1985), and the target price established by Congress and the USDA through legislation. Deficiency payments per bushel of established yield are the difference between the target price and market price or support price (loan rate), whichever difference is less. For many crops, the target price has been far above the market price for most of this decade (see Figures 1-30 and 1-33 in Chapter 1~. High target prices can promote higher levels of inputs, thereby contrib- uting to surplus production. This is illustrated by the theoretical example presented in Figure 1-30 in which a farmer will produce 19,000 bushels at the market price and 24,000 bushels at the target price (this example does not take into account annual set-aside requirements). It costs the farmer more to produce the additional 5,000 bushels than they are worth on the market. The additional 5,000 bushels cost taxpayers $10,000 in government payments ($2.00 per bushel x 5,000 bushels). Commodity programs also influence which crops are planted and the economic and environmental impacts associated with land-use decisions. The cross-compliance provision of the Food Security Act of 1985 is designed to control production of program commodities by limiting a farmer's ability to increase base acres. It also serves as an effective financial barrier to diversification into other program crops, especially if a farmer has no estab- lished base acres for those crops. Cross-compliance stipulates that in order to enroll land from one crop acreage base in the program, the farmer must not exceed his or her acreage base for any other program crop. The practical impact of this provision is profound, particularly if a farmer's acreage base for other crops is zero. For example, a farmer with corn base acreage and no other crop base acres would lose the right to participate in all programs if any land on his or her farm was planted with other program crops such as wheat or rye (oats are currently exempt) as part of a rotation. If a farm had base acreage for two or more crops when cross-compliance went into effect in 1986, the farm must stay enrolled in both programs each year to retain full eligibility for benefits from both programs. High government support prices also influence planting decisions. Throughout the 1970s, soybean prices averaged more than twice the corn target prices. In recent years, soybean prices have strengthened markedly in contrast to corn. Yet, soybean stocks have fallen to their lowest level in a decade, even though prospects for increased demand in the United States and abroad are very good. The total acres planted with soybeans are declin- ing because of high government support payments for other crops, most notably corn. Moreover, considerable acreage is now producing corn be- cause farmers must continue to plant their corn base every year to preserve their current level of eligibility for future corn program payments. Even though commodity prices may rise somewhat as a result of the 1988 drought, the programs will remain an attractive option to most growers. This is because target prices and deficiency payments are likely to remain substantial. Farmers have become more efficient, and interest and rents

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238 ALTERNATIVE AGRICULTURE TABLE 4-14 Average Annual Target Prices as a Percentage of Total Economic Costs Crop 1978 - 1981a 1982 - 1985b 1986 - 1990C Corn 95 110 141 Cotton 82 107 111 Rice 106 125 153 Soybeans 82 85 91 Wheat 94 108 123 NOTE: Total economic costs cover all fixed and variable production costs for an operator with full ownership of the land and other capital assets. aCrop years covered by the Food Security Act of 1977. bCrop years covered by the Food Security Act of 1981. Forecasts under current legislation for crop years covered by the Food Security Act of 1985. Minimum target prices for grains and cotton and the minimum soybean loan rate under the Agricultural Act of 1949, as amended, were assumed for 1988-1990. Soybean loan rate as a percentage of soybean total economic costs. SOURCE: U.S. Department of Agriculture. 1988. Investigations of Changes in Farm Programs. 201-064/80069. Washington, D.C. have declined, making deficiency payments even more valuable (Table 4-14). The Effect of Rotations on Base Acres and Fecleral Deficiency Payments For farms currently participating in commodity programs, the transition from continuous cropping to rotations will decrease gross farm income by reducing a farm's acreage base eligible for federal deficiency payments. The magnitude of this reduction depends on the size of the deficiency payment. Table 4-15 illustrates the reduction in deficiency payments due to the loss of corn base acres resulting from the adoption of a corn-oats-meadow- meadow (C-O-M-M) rotation. When complete, the change from continuous corn to a C-O-M-M rotation on 1,000 base acres would cost this farm about $90,000 per year in deficiency payments. Overall farm income, however, depends on a number of factors, including the market for new crops, incor- poration of livestock into the operation, the possible increase in corn yield, and the type of rotation adopted. Nonetheless, the loss of current and future income from ineligibility for government programs presents a signif- icant obstacle to the adoption of alternatives. The previously discussed PALS studies of wheat farms in Washington and additional work on cash grain farms in Iowa further illustrate the strong economic influence of the target price and base acres provisions of the farm programs. Almost no pesticides or fertilizers were used in the PALS rota- tion. This reduced variable production costs per acre to about half that of the conventional rotation, or $56.82 versus $129.40 per acre (Goldstein and

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ECONOMIC EVALUATION TABLE 4-15 Reduction of Deficiency Payments and Corn Acreage Base Following Change From Continuous Corn to C-O-M-Ma Rotation on 1,000-Acre Farm 239 Years Since Corn Corn Set- Corn Deficiency Adopting C-O-M-M Base Planted Asideb Yield Payments Rotation (acres) (acres) (acres) (bushels/acre)C (dollars) 0 1,000 800 200 147 142,296 4 550 250 110 173 52,332 8 250 250 50 173 52,332 aRepresents a corn-oats-meadow-meadow rotation. bAssumes 20 percent corn base set-aside. Based on Duffy, M. 1987. Impacts of the 1985 Food Security Act. Ames, Iowa: Department of Economics, Iowa State University. Corn production times 1987 deficiency payment ($1.21/bushel), ignoring the statutory $50,000 limit on payments. Young, 1987) (see Table 4-12). Wheat yields were nearly identical. PALS reduced pea yields about 10 percent from the conventional rotation yields, however, because of competition with the medic. The high support price for wheat greatly affects the comparative profita- bility of PALS and conventional rotations. When the revenue from sale of all crops in the rotation was based on government deficiency payments, favorable growing conditions, and subsequent high yields, the conventional rotation earned $144.80 per acre, compared with $113.98 per acre for the PALS rotation. These figures assumed 1986 target prices for wheat and barley that were 45 and 35 percent higher than market prices, respectively. But when market prices were used in calculating net returns, the positions were reversed. The PALS rotation returned an estimated $61.18 per acre over variable costs versus $46.60 for the conventional rotation (see Table 4-13). The cause of the disparity in net returns is that the PALS rotation pro- duced wheat, a price-supported crop, on only one-third of the acreage each year. PALS wheat yields averaged 62.6 bushels per acre, whereas conven- tionally produced wheat yields averaged 60.3 bushels per acre. The conven- tional rotation, however, produced program crops on 75 percent of the acreage each year (2 years of wheat, 1 year of barley in a 4-year rotation). But when less favorable growing conditions were assumed, the net returns of the conventional rotation declined dramatically, even assuming govern- ment price supports. Under government support and less favorable weather conditions, PALS earned only $5.42 less per acre than the conventional rotation. An analysis of five rotations in Iowa reached similar conclusions. Without government payments, continuous corn was found to be the least profitable of the rotations at $56.00 per acre average net return over variable cost compared with $90.00 for a corn-soybeans-corn-oats (C-B-C-O) rotation and

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240 ALTERNATIVE AGRICULTURE TABLE 4-16 Returns per Acre by Nitrogen Fertilizer Application Rates, Rotation and Government Program Participationa Dollars/Acre Basic Participation No Program (20 percent Full Participation Rotation Participation set aside) (35 percents N (pounds/acre) C-C-C-C 56 979 221 240 C-C-C-O 61 187 186 180 C-B-C-O 90 177 175 120 C-C-O-M 64 151 150 120 C-O-M-M 67 113 112 40 NOTE: Crops in rotations are abbreviated by the following: C is corn; O. oats; B. soybeans; and M, meadow. aReturns over variable costs only. b35 percent includes 20 percent set aside and 15 percent paid land diversion. SOURCE: Duffy, M. 1987. Impacts of the 1985 Food Security Act. Ames, Iowa: Department of Economics, Iowa State University. $67.00 for a corn-oats-meadow-meadow (C-O-M-M) rotation (Duffy, 1987). But with government program payments and a 20 percent set-aside, contin- uous corn earned annually on average $222.00 per acre, compared with $177.00 and $113.00 for the C-B-C-O and C-O-M-M rotations, respectively. In recent years the feed grain program encouraged higher per acre corn yields, continuous corn production, and greater use of pesticides and nitro- gen fertilizer. Duffy (1987) incorporated prevailing input assumptions into his study: for continuous corn, 240 pounds of nitrogen per acre was ap- plied; for the C-B-C-O and C-O-M-M rotations, the application rates were 120 and 40 pounds, respectively. By encouraging high-yield, continuous corn production, the program has increased the corn surplus in spite of acreage set-aside requirements designed to reduce production, while exac- erbating the potential for surface water and groundwater pollution (Table 4-16) (Duffy, 1987). Impact of Research and Technology Transfer Alternative farming systems are based on better management and infor- mation rather than the use of commercial products. Hence, there may be fewer opportunities and incentives for current input producers to develop and market inputs for alternative farming systems. Markets may be created, however, for companies offering management advice on better crop rotation strategies, efficient manure use, IPM, and other such practices and technol- ogies. More resources should be allocated to collection of data about alter- native farming systems regarding costs and the value and variability of resource requirements, yields, and other performance measures ordinarily

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ECONOMIC EVALUATION 241 incorporated into farm management budgets. A data base should be devel- oped to integrate findings from the various biological and physical sciences, financial analyses, and estimates of the impact of farm practices on human health, water quality, and the environment. SUMMARY Research has begun to demonstrate the economic benefits of alternative farming systems and how current policies impose incentives and disincen- tives for the selection of various types of farming systems. The committee's case studies provide examples of several profitable alter- native operations. Additionally, several farm surveys provide general infor- mation about the overall financial performance of farmers using low-input methods, such as those who practice organic farming. But many questions remain unanswered. Farm surveys do not provide conclusive evidence re- garding the advantages and disadvantages of different farming methods because many factors are randomized or not constant. Somewhat more systematic data are available regarding the economic performance of IPM programs. IPM has been highly successful in many instances. Farmers who use IPM usually reduce the amount of pesticides applied and increase their net returns compared with farmers who apply pesticides on a regular schedule. Diversification strategies such as crop rotations can decrease input costs and increase crop yields. Experimental results must be interpreted with caution, however, when used to project the results of widespread adoption. Nonetheless, rotations have the potential to simultaneously increase farm income and reduce farm program expenses. Forage legumes in the crop rotation have the added advantage of supplying nitrogen. But when cash grain prices are supported far above the market level, many farmers would reduce their net farm incomes if they shifted from growing only price- supported crops, such as corn and soybeans, to legume-based rotations unless commodity program rules are reformed. Livestock are an essential component of some diversified alternative crop- ping systems. Many alternative farming systems, however, do not depend on livestock. Examples include perennial crop systems such as orchards and vineyards, and vegetable and other annual crop farms that use legumes as green manure crops or import organic residues from off the farm. Diversi- fication can reduce risks and variability of net returns to farm families. For these reasons, it should be studied in more detail. Ver,v little is known about the aggregate impacts of possible widespread adoption of alternative farming methods. Future economic research on al- ternative farming methods should examine social and aggregate costs and benefits. This research should be integrated with that of other agricultural disciplines, the Extension Service, and the private sector to apply the results at the farm level.

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242 ALTERNATIVE AGRICULTURE REFERENCES Allen, W. A., E. G. Rajotte, R. F. Kazmeirczak, Jr., M. T. Lambur, and G. W. Norton. 1987. The National Evaluation of Extension's Integrated Pest Management (IPM) Programs. VCES Publication 491-010. Blacksburg, Va.: Virginia Cooperative Extension Service. Antle, J. M., and S. K. Park. 1986. The economics of IPM in processing tomatoes. California Agriculture 40~3&4~: 31-32. Baker, K. F., and R. J. Cook. 1982. Biological Control of Plant Pathogens. St. Paul, Minn.: American Phytopathological Society. Barbano, D. M., R. I. Verdi, A. I. Saeman, D. M. Gallon, and R. R. Rasmussen. 1987. Impact of mastitis on dairy product yield and quality. In Proceedings of the 26th Annual Meeting of the National Mastitis Council. Arlington, Va.: National Mastitis Council. Batra, S. W. 1981. Biological control of weeds: Principles and prospects. Pp. 45-59 in Biological Control in Crop Production. Beltsville Symposia in Agricultural Research, No. 5, G. C. Papavizas, B. Y. Endo, D. L. Klingman, L. V. Knutson, R. D. Lumsden, and I. L. Vaughn, eds. Totowa, N.~.: Allanheld, Osmun. Boehlje, M. D., and V. R. Eidman. 1984. Farm Management. New York: Wiley. Booth, W. 1988. Revenge of the "nozzleheads." Science 23:135-137. Brusko, M., G. DeVault, F. Zahradnik, C. Cramer, and L. Ayers, eds. 1985. What the research reports haven't told you. Pp. 20-28 in Profitable Farming Now!, M. Brusko, G. DeVault, F. Zahradnik, C. Cramer, and L. Ayers, eds. Emmaus, Pa.: Regenerative Agriculture Association. Coble, H. D. 1985. Development and implementation of economic thresholds for soybeans. Pp. 295-307 in CIPM Integrated Pest Management on Major Agricultural Systems, R. E. Frisbie and P. L. Adkisson, eds. College Station, Tex.: Texas A&M University. Council for Agricultural Science and Technology. 1981. Antibiotics in Animal Feeds. Report No. 88. Ames, Iowa: Council for Agricultural Science and Technology. Dabbert, S., and P. Madden. 1986. The transition to organic agriculture: A multi-year model of a Pennsylvania farm. American Journal of Alternative Agriculture 1~3~:99-107. Day, W. H. 1981. Biological control of alfalfa weevil in the northeastern United States. Pp. 361- 374 in Biological Control in Crop Production. Beltsville Symposia in Agricultural Re- search, No. 5, G. C. Papavizas, B. Y. Endo, D. L. Klingman, L. V. Knutson, R. D. Lumsden, and 1. L. Vaughn, eds. Totowa, Hi.: Allanheld, Osmun. Domanico, J. L., P. Madden, and E. J. Partenheimer. 1986. Income effects of limiting soil erosion under organic, conventional and no-till systems in eastern Pennsylvania. Ameri- can Journal of Alternative Agriculture 1~2~:75-82. Dover, M. J., and L. M. Talbot. 1987. To Feed the Earth: Agro-Ecology for Sustainable Devel- opment. Washington, D.C.: World Resources Institute. Duffy, M. 1987. Impacts of the 1985 Food Security Act. Ames, Iowa: Department of Econom- ics, Iowa State University. Friend, T. H., G. R. Dellmeier, and E. E. Gbur. 1985. Comparison of Four Methods of Calf Confinement. 1. Physiology. Technical article 18960. College Station, Tex.: Texas Agricul- tural Experiment Station. Frisbie, R. E., and P. L. Adkisson. 1985. Integrated Pest Management on Major Agricultural Systems. MP-1616. College Station, Tex.: Texas Agricultural Experiment Station. Goldstein, W. A., and D. L. Young. 1987. An agronomic and economic comparison of a conventional and a low-input cropping system in the Palouse. American Journal of Alter- native Agriculture 2~2~:51-56. Hall, D. C. 1977. The profitability of integrated pest management: Case studies for cotton and citrus in the San Joaquin Valley. Bulletin of the Entomological Society of America 23:267-274. Heady, E. O. 1948. The economics of rotations with farm and production policy applications. Journal of Farm Economics 30~4~:645-664. Heady, E. O., and H. R. Jensen. 1951. The Economics of Crop Rotations and Land Use: A

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ECONOMIC EVALUATION 243 Fundamental Study in Efficiency with Emphasis on Economic Balance of Forage and Grain Crops. Research Bulletin 383. Ames, Iowa: Agricultural Experiment Station, Iowa State University. Heichel, G. H. 1987. Legumes as a source of nitrogen in conservation tillage systems. Pp. 29- 35 in The Role of Legumes in Conservation Tillage, I. F. Power, ed. Ankeny, Iowa: Soil Conservation Society of America. Helmers, G. A., M. R. Langemeier, and J. Atwood. 1986. An economic analysis of alternative cropping systems for east-central Nebraska. American Journal of Alternative Agriculture 1(4):153-158. Hay, M. 1985. Recent advances in genetics and genetic improvements in Phytosiidae. Annual Review of Entomology 30:345-370. Hueth, D., and U. Regev. 1974. Optimal agricultural pest management with increasing pest resistance. American journal of Agricultural Economics 56~3~:543-552. Kansas State University. Cooperative Extension Service. 1987. The Annual Report: 1987 Man- agement Information, Kansas Farm Management Associations. Manhattan, Kans.: Kansas State University. Kilkenny, M. R. 1984. An Economic Assessment of Biological Nitrogen Fixation in a Farming System of Southeast Minnesota. M.S. thesis, University of Minnesota, St. Paul. Killingsworth, M. L., and I. B. Kliebenstein. 1984. Estimation of production cost relationships for swine producers using differing levels of confinement. Journal of the American Society of Farm Managers and Rural Appraisers 48~2~:32-36. Kliebenstein, ). B., and I. R. Sleper. 1980. An Economic Evaluation of Total Confinement, Partial Confinement, and Pasture Swine Production Systems. Research Bulletin 1034. Columbia, Ma.: University of Missouri-Columbia. Kliebenstein, I. B., C. L. Kirtley, and M. L. Killingsworth. 1981. A comparison of swine production costs for pasture, individual, and confinement farrow-to-finish production facilities. Special Report 273. Columbia, Mo.: Agricultural Experiment Station, University of Missouri-Columbia. Koepf, H. H., B. D. Peterson, and W. Schaumann. 1976. Bio-dynamic Agriculture: An Intro- duction. Spring Valley, N.Y.: Anthroposophic Press. Kovach, J., and J. P. Tette. 1988. A survey of the use of IPM by New York apple producers. Agriculture, Ecosystems and Environment 20:101-108. Lidvall, E. R., R. M. Ray, M. C. Dixon, and R. L. Wyatt. 1980. A Comparison of Three Farrow- Finish Pork Production Systems. Reprint from Tennessee Farm and Home Science No. 116. Lockeretz, W., G. Shearer, D. H. Kohl, and R. W. Klepper. 1984. Comparison of organic and conventional farming in the Corn Belt. Pp. 37-48 in Organic Farming: Current Technology and Its Role in a Sustainable Agriculture, D. F. Bezdicek and J. F. Power, eds. Madison, Wis.: American Society of Agronomy, Crop Science Society of America, Soil Science Society of America. National Fertilizer Development Center. Tennessee Valley Authority. 1988. Unpublished data. National Mastitis Council. 1987. Current Concepts of Bovine Mastitis, 3d ed. Arlington, Va.: National Mastitis Council. National Research Council. 1986a. Animal Health Research Programs of the Cooperative State Research ServiceStrengths, Weaknesses, and Opportunities. Washington, D.C.: National Academy Press. National Research Council. 1986b. Pesticide Resistance: Strategies and Tactics for Manage- ment. Washington, D.C.: National Academy Press. National Research Council. 1987a. Agricultural Biotechnology: Strategies for National Com- petitiveness. Washington, D.C.: National Academy Press. National Research Council. 1987b. Biological Control in Managed Ecosystems. Research Brief- ings 1987. Washington, D.C.: National Academy Press. National Research Council. 1987c. Regulating Pesticides in Food: The Delaney Paradox. Washington, D.C.: National Academy Press. /

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244 ALTERNATIVE AGRICULTURE Office of Technology Assessment. 1979. Pest Management Strategies. Working Papers. Vol. 2. Washington, D.C.: Office of Technology Assessment. 169 pp. Olson, K. D., E. J. Weness, D. E. Talley, P. A. Fates, and R. R. Loppnow. 1986. 1985 Annual Report: Southwestern Minnesota Farm Business Management Association. Economic Re- port ER86-1. St. Paul, Minn.: University of Minnesota. Olson, K. D., E. J. Weness, D. E. Talley, P. A. Fates, and R. R. Loppnow. 1987. 1986 Annual Report, Revised: Southwestern Minnesota Farm Business Management Association. Eco- nomic Report ER87-4. St. Paul, Minn.: University of Minnesota. Olson, R. A., K. D. Frank, P. H. Grabouski, and G. W. Rehm. 1981. Economic and Agronomic Impacts of Varied Philosophies of Soil Testing. Nebraska Agricultural Experiment Station. No. 6695 Journal Series. Lincoln, Nebr.: Agricultural Experiment Station, University of Nebraska. Osteen, C. D., E. B. Bradley, and L. I. Moff*t. 1981. The Economics of Agricultural Pest Control: An Annotated Bibliography, 1960-80. Bibliographies and Literature of Agriculture No. 14. Economics and Statistics Service. Washington, D.C.: U.S. Department of Agriculture. Power, J. F. 1987. Legumes: Their potential role in agricultural production. American Journal of Alternative Agriculture 2~2~:69-73. Randall, G. W., and P. L. Kelly. 1987. Soil test comparison study. Pp. 145-148 in A Report on Field Research in Soils. Miscellaneous Publication No. 2 (Revised)-1987. St. Paul, Minn.: University of Minnesota Agricultural Experiment Station. Reichelderfer, K. H. 1981. Economic feasibility of biological control of crop pests. Pp. 403-417 in Biological Control in Crop Production, Beltsville Symposia in Agricultural Research, No. 5, G. C. Papavizas, B. Y. Endo, D. L. Klingman, L. V. Knutson, R. D. Lumsden, and J. L. Vaughn, eds. Totowa, Hi.: Allanheld, Osmun. Reichelderfer, K. H., and F. E. Bender. 1979. Application of a simulative approach to evaluat- ing alternative methods for the control of agricultural pests. American Journal of Agricul- tural Economics 61~2~:258-267. Shields, E. J., J. R. Hyngstrom, D. Curwen, W. R. Stevenson, l. A. Wyman, and L. K. Binning. 1984. Pest management for potatoes in WisconsinA pilot Program. American Potato Journal 61:508-517. ~ ~ v Shrader, W. D., and R. D. Voss. 1980. Soil fertility: Crop rotation vs. monoculture. Crops and Soils Magazine 7:15-18. Smith, l. W., and C. S. Barfield. 1982. Management of preharvest insects. Pp. 250-325 in Peanut Science and Technology, H. E. Pattee and C. T. Young, eds. Yoakum, Tex.: Amer- ican Peanut Research and Education Society. U.S. Congress, House. Committee on Government Operations, Subcommittee on the Envi- ronment, Energy, and Natural Resources. 1988. Hearing on Environmental and Economic Benefits of Low Input Farming, April 28, Washington, D.C. U.S. Department of Agriculture. 1980. Study Team on Organic Farming. Report and Recom- mendations on Organic Farming. Washington, D.C. U.S. Environmental Protection Agency. 1982. Ethylene Bisdithiocarbamates Decision Docu- ment: Final Resolution of Rebuttal Presumption Against Registration. Washington, D.C. U.S. Environmental Protection Agency. 1985. Captan: Special Review Position Document 21 3. Washington, D.C. U.S. Environmental Protection Agency. 1986. Alachlor: Special Review Technical Support Document. Washington, D.C. Wagstaff, H. 1987. Husbandry methods and farm systems in industrialized countries which use lower levels of external inputs: A review. Agriculture, Ecosystems and Environment 19:1-27. Young, D. L., and W. A. Goldstein. 1987. How government farm programs discourage sus- tainable cropping systems: A U.S. case study. Paper No. 15. Pp. 443-460 in How Systems Work, The Proceedings of the Farming System Research Symposium. Fayetteville, Ark.: University of Arkansas. Zavaleta, L. R., and W. G. Ruesink. 1980. Expected benefits from nonchemical methods of alfalfa weevil control. American loumal of Agricultural Economics 62~4~: 801-805.