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Uncoordinated Agricultural and Environmental Policy-Making: An Application to Irrigated Agriculture in the West

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  • Weinberg, Marca
  • Kling, Catherine L.
Abstract
Agriculture and the environment are linked by a mutual reliance on scarce resources and prevalent market distortions. In this paper we examine the efficiency costs of policies that correct distortions in one sector while ignoring those in another. The dual distortions of an environmental externality and water subsidies are studied in the context of irrigated agriculture in California. The welfare costs associated with independent action by either a water agency or an environmental authority when that policy maker attempts to correct the respective market distortion without consideration of the distortion in the other market are estimated. Policies to correct the two distortions are found to be complementary. Under these conditions, the independent correction of either distortion improves welfare by at least $118 per acre. In most cases, the simultaneous adoption of various second-best policies further reduces welfare losses associated with these distortions.

Suggested Citation

  • Weinberg, Marca & Kling, Catherine L., 1996. "Uncoordinated Agricultural and Environmental Policy-Making: An Application to Irrigated Agriculture in the West," Staff General Research Papers Archive 1603, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1603
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    1. Xu, Ying & Kovacs, Kent & Nalley, Lanier & Popp, Michael, 2015. "Investment in on-farm reservoirs to align economic returns and ecosystem services," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196778, Southern Agricultural Economics Association.
    2. Hongxing Liu & Wendong Zhang & Elena Irwin & Jeffrey Kast & Noel Aloysius & Jay Martin & Margaret Kalcic, 2020. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin," Land Economics, University of Wisconsin Press, vol. 96(4), pages 510-530.
    3. Philippe Bontems & Gilles Rotillon & Nadine Turpin, 2005. "Self-Selecting Agri-environmental Policieswith an Application to the Don Watershed," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(3), pages 275-301, July.
    4. Elsa Martin & Hubert Stahn, 2013. "Potential Conflict and Inefficiencies Arising in Agri-environmental Management," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 423-445, June.
    5. Lichtenberg, Erik, 2002. "Agriculture and the environment," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 23, pages 1249-1313, Elsevier.
    6. Kovacs, Kent F. & Wailes, Eric & West, Grant & Popp, Jennie & Bektemirov, Kuatbay, 2014. "Optimal Spatial-Dynamic Management of Groundwater Conservation and Surface Water Quality with On-Farm Reservoirs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-28, November.
    7. Schwabe, Kurt A. & Knapp, Keith C. & Kan, Iddo, 2002. "Integrated Drainwater Management In Irrigated Agriculture," 2002 Annual meeting, July 28-31, Long Beach, CA 19609, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. FOUDI Sebastien, 2006. "Agriculture and Resource Exploitation: A Dynamic Bioeconomic Model of Agricultural Effort and Land Use Determination," LERNA Working Papers 06.25.218, LERNA, University of Toulouse.
    9. Jaeger, William K., 2004. "Conflicts over Water in the Upper Klamath Basin and the Potential Role for Market-Based Allocations," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-18, August.
    10. Roger Claassen & Richard Horan, 2001. "Uniform and Non-Uniform Second-Best Input Taxes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(1), pages 1-22, May.
    11. P. Bontems & N. Turpin & Gilles Rotillon, 2003. "Acceptibility constraints and self-selecting agri-environmental policies," THEMA Working Papers 2003-14, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    12. Philippe Bontems & Gilles Rotillon & Nadine Turpin, 2008. "Acceptable reforms of agri-environmental policies," Revue d'économie politique, Dalloz, vol. 118(6), pages 847-883.
    13. Horan, Richard D. & Claassen, Roger & Cooper, Joseph C., 2000. "Environmental Risk And Agri-Environmental Policy Design," 2000 Annual meeting, July 30-August 2, Tampa, FL 21827, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Elsa Martin & Hubert Stahn, 2009. "On The Coordination Of The European Agri-Environmental And Water Internalizing Policies," Working Papers halshs-00360993, HAL.
    15. Aillery, Marcel P. & Gollehon, Noel R. & Johansson, Robert C. & Kaplan, Jonathan D. & Key, Nigel D. & Ribaudo, Marc, 2005. "Managing Manure To Improve Air And Water Quality," Economic Research Report 33593, United States Department of Agriculture, Economic Research Service.

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