Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-28T00:56:57.787Z Has data issue: false hasContentIssue false
  • English
  • Français

Economic analysis of private and public benefits of corn, switchgrass and mixed grass systems in Eastern South Dakota

Published online by Cambridge University Press:  19 July 2013

Nelly Bourlion ,
Larry Janssen  and
Michael Miller
Nelly Bourlion
Affiliation:
Global Environment Facility – World Bank, Washington DC, USA.
Larry Janssen*
Affiliation:
Department of Economics, South Dakota State University, Brookings, SD, USA.
Michael Miller
Affiliation:
Department of Economics, South Dakota State University, Brookings, SD, USA.
*
* Corresponding author: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

The objective of this research is to develop an economic analysis of different crop mix biofuels programs for meeting ethanol and sustainability demands. Primary data are from South Dakota State University field experiments on farms located in east-central South Dakota. The data include 4 years of field data, three crop systems (mixed grass, switchgrass and corn), two residue treatments (no removal, removal of biomass), and three landscape positions (back slope, crest and foot slope). A representative farm model and five scenarios are developed to conduct a full budget analysis over a 12-year period. Public benefits are evaluated, using the benefit transfer method to value ecosystem services, by allocating a dollar value to three environmental variables; carbon sequestration, reduction of sedimentation and pheasant production. Stochastic simulation results are compared for each of the five scenarios, one with only annualized net private returns, and one including the value of environmental benefits. Results indicate that: (1) the conventional continuous corn scenario has the highest net returns over the 12-year budget, (2) carbon sequestration represents 80% of the environmental benefits, and (3) the added economic value of ecosystem services does not provide enough incentives for farmers to convert from corn production to grass production.

Keywords

biofuelsswitchgrasscrop budgetsenvironmental benefitsSouth Dakota
Type
Research Papers
Information
Renewable Agriculture and Food Systems , Volume 29 , Issue 4 , December 2014 , pp. 355 - 365
Copyright
Copyright © Cambridge University Press 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Food and Agricultural Policy Research Institute. 2008. The energy independence and security act of 2007: preliminary evaluation of selected provisions. Congressional Staff Report FAPRI-MU #01-08. University of Missouri-Columbia.Google Scholar
2 Eisentraut, A. 2010. Sustainable production of second-generation biofuels; potential and perspectives in major economies and developing countries. Information paper. International Energy Agency, Paris.Google Scholar
3 Greene, N. 2004. Growing Energy; How Biofuels can Help end America's Oil Dependence. Natural Resources Defense Council, New York.Google Scholar
4 English, B., De La Torre Ugarte, D., Menard, J., and West, T. 2008. Economic and environmental impacts of biofuels expansion: the role of cellulosic ethanol. University of Tennessee, Department of Agricultural Economics.Google Scholar
5 Malcolm, S.A., Aillery, M., and Weinberg, M. 2009. Ethanol and a changing agricultural landscape. Economic Research Report 86. U.S. Department of Agriculture, Economic Research Service, Washington, DC.Google Scholar
6 Meyer, P.E. 2010. Biofuel Review Part 3: Land Availability, Conversion, and Deforestation. IEEE-USA Today's Engineer Online, Washington, DC.Google Scholar
7 Sesmero, J. 2011. Sustainability of corn stover harvest for biomass. Purdue University, Department of Agricultural Economics.Google Scholar
8 Heathon, E.A., Clifton-Brown, J., Voigt, T.B., Jones, M.B., and Long, S.P. 2004. Miscanthus for renewable energy generation: European Union experience and projections for Illinois. Mitigation and Adaptation Strategies for Global Change 9:433–451.Google Scholar
9 Trostle, R. 2008. Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices. U.S. Department of Agriculture, Economic Research Service, Washington DC.Google Scholar
10 Inter Agency Projections Committee. 2010. USDA Agricultural Projections to 2019, Long-Term Projections Report. Office of the Chief Economist, U.S. Department of Agriculture, Washington DC.Google Scholar
11 Pryor, F.L. 2009. The economics of gasohol. Contemporary Economic Policy 27(4):523–537.Google Scholar
12 Taxpayers for Common Sense. 2013. Political Footprint of the Corn Ethanol Lobby. Taxpayers for Common Sense, Washington, DC.Google Scholar
13 Khanna, M. 2008. Cellulosic biofuels: are they economically viable and environmentally sustainable? Agricultural and Applied Economics Association. Choices 23:3.Google Scholar
14 Mooney, D., Roberts, R., English, B., Tyler, D., and Larson, J. 2008. Switchgrass production in marginal environments: a comparative economic analysis across four west Tennessee landscapes. University of Tennessee, Department of Agricultural Economics.Google Scholar
15 Bangsund, D., Devuyst, E., and Leistritz, F. 2008. Evaluation of breakeven farm-gate switchgrass prices in south central North Dakota. Agribusiness and Applied Economics Report 632. North Dakota State University.Google Scholar
16 Song, F., Zhao, J., and Swinton, S. 2009. Switching to Perennial Energy Crops Under Uncertainty and Costly Reversibility. Staff paper 2009-14. Michigan State University Department of Agricultural, Food, and Resources Economics, East Lancing, Michigan.Google Scholar
17 Malcolm, S., Aillery, M., and Weinberg, M. 2009. Ethanol and A Changing Landscape. U.S. Department of Agriculture, Economic Research Service, Washington DC.Google Scholar
18 King, D., and Mazzotta, M. 2000. Ecosystem valuation. University of Maryland. Available at Web site: www.ecosystemvaluation.org. (accessed June 25, 2013).Google Scholar
19 Babcock, B., Gassman, P., Jha, M., and Kling, C. 2007. Adoption Subsidies and Environmental Impacts of Alternative Energy Crops. Briefing Paper 07-BP 50. Center for Agriculture and Rural Development, ISU, Ames. Iowa.Google Scholar
20 Gascoigne, W., Hoag, D., Koontz, L., Tangen, B., Shaffer, T., and Gleason, R. 2011. Valuing ecosystem and economic services across land-use scenarios in the Prairie Pothole region of the Dakotas, USA. Ecological Economics 70:1715–1725.CrossRefGoogle Scholar
21 Natural Resources Conservation Services. 2011. Precision conservation using multiple cellulosic feedstocks. Final Report 69-3A75-7-117. South Dakota State University, College of Agricultural and Biological Sciences. South Dakota Experiment Station.Google Scholar
22 U.S. Department of Agriculture. 2007. Census of Agriculture. State Level Data, South Dakota.Google Scholar
23 Bourlion, N. 2012. Private and public benefits of innovative mix crop systems intended for biofuels production in eastern South Dakota. Masters thesis, South Dakota State University, Economics Department.Google Scholar
24 Interagency Working Group on Social Cost of Carbon, United States Government. 2010. Technical support document: social cost of carbon for regulatory impact analysis - Under Executive Order 12866.Google Scholar
25 Iowa State University Extension and Outreach. 2011. 2011 Iowa farm custom rate survey. Agricultural Decision Maker.Google Scholar
26 Janssen, L. and Pflueger, B. 2011. South Dakota Agricultural Land Market trends: South Dakota Agricultural Land Market Trends. SD Agricultural Experiment Station, Brookings, SD.Google Scholar
27 U.S. Department of Agriculture, National Agricultural Statistics Services. 2010. Crop Production. State Level Data, South Dakota.Google Scholar
28 U.S. Department of the Interior, Fish and Wildlife Service and U.S. Department of Commerce, U.S. Census Bureau. 2006. 2006 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation.Google Scholar
29 Heimerl, K. 2011. Comparison of soil within a till plain across contrasting land uses. Masters thesis, South Dakota State University, Plant Science Department.Google Scholar
30 Mitchell, C. and Everest, J. 1995. Soil testing and plant analysis: interpreting soil organic matter tests. Southern Regional Fact Sheet. Auburn University, AL, Department of Agronomy and Soils.Google Scholar
31 Allmaras, R., Schomberg, H., Douglas, C., and Dao, J. 2000. Soil organic carbon sequestration potential of adopting conservation tillage in U.S. croplands. Journal of Soil and Water Conservation 55(3):365–373.Google Scholar
32 Hill, J., Polasky, S., Nelson, E., Tilman, D., Huo, H., Ludwig, L., Neumann, J., Zheng, H., and Bonta, D. 2009. Climate change and health costs of air emissions from biofuels and gasoline. Proceedings of the National Academy of Sciences USA 106(6):2077–2082.Google Scholar
33 Hansen, L. and Ribaudo, M. 2008. Economic measures of soil conservation benefits; regional values for policy assessment. ERS-USDA Technical Bulletin 1922.Google Scholar
34 Nielson, R., McDonald, L., Sullivan, J., Burgess, C., Johnson, D., and Howlin, S. 2006. Estimating response of ring-necked pheasant (Phasianus colchicus) to the conservation reserve program. Technical Report Prepared for U.S. Department of Agriculture Farm Service Agency.Google Scholar
35 Richardson, J., Shumann, K., and Feldman, P. 2008. Simetar© Simulation and Econometrics to Analyze Risk. Excel Add-in Program, College Station, TX.Google Scholar