transfer from taxpayers to farmers, not income generated by agricultural production, and are therefore excluded from net economic value calculations.

Case Studies

WRI has published a series of six case studies that explicitly examined sustainable agricultural practices, including on- and off-farm economic measures of agricultural sustainability (Faeth et al., 1991; Faeth, 1993). These include two case studies of alternative corn-soybean production systems in Pennsylvania and Nebraska, rice-wheat-maize production systems in India, lowland irrigated rice in the Philippines, and a comparison of upland and lowland wheat production in Chile. Each study is based on actual field trials.

These studies applied an NRA framework to quantify the financial, economic, fiscal, and environmental costs and benefits of various agricultural practices. Within this framework, we accounted for the value of long-term soil productivity changes and off-site surface water damages for alternative farming practices. We also analyzed the financial value to farmers and the economic value to society of each farming practice under five policy scenarios.

In the Pennsylvania case study, organic farming practices proved superior to conventional practices agronomically, environmentally, and economically. Resource-conserving production practices cut production costs by 25 percent, eliminated chemical fertilizer and pesticide use, reduced soil erosion by more than 50 percent, and increased yields after completion of a transition from heavy chemical use. In addition, increasing water retention reduced off-site damages by $30 per acre per year, and reducing erosion forestalled a 30-year yield decline with a present value of more than $124 per acre.

In Nebraska, low-chemical-input alternatives to the predominant corn-soybean rotation were found to be economically competitive and environmentally superior. Three different regimens for the corn-soybean rotation (herbicide and fertilizer use, fertilizer use only, and an organic treatment) yielded farm incomes and net economic values that differed by no more than $2 per acre per year.

In northwest India, heavy electricity subsidies for tubewell irrigation are resulting in the depletion of groundwater at the rate of 0.8 meter per year. The value of this loss in terms of future pumping costs represents almost 15 percent of gross operating margin, and when it is included in financial calculations, water-conserving farming practices are seen to be much more profitable. In the Philippines, when the health-care costs for farmers who apply unregulated, subsidized pesticides are accounted for, scheduled spraying of pesticides is much less profitable than integrated pest management or biocontrol methods. And in Chile, where poor farmers use soil-degrading production practices on steep hillsides, soil-conserving practices are more profitable than traditional methods.

Several important conclusions emerged from this research:

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