Green Technologies for a More Sustainable Agriculture. By James

Hrubovcak, Utpal Vasavada, and Joseph E. Aldy, with contributions from Linda

Calvin, Jorge Fernandez-Cornejo, Dwight Gadsby, Ralph Heimlich, Wen Huang,

Paul Johnston, and Dale Leuck. Resource Economics Division, Economic

Research Service, U.S. Department of Agriculture, Agriculture Information

Bulletin No. 752.

Abstract

For U.S. agriculture to continue along a sustainable path of economic development, further production increases must be generated by technologies that are

both profitable and more environmentally benign. In this context, we assess the

role of these “green” or sustainable technologies in steering agriculture along a

more sustainable path. However, the lack of markets for the environmental

attributes associated with green technologies can limit their development. In

addition, simply making a technology available does not mean it will be adopted. Experience with green technologies such as conservation tillage, integrated

pest management, enhanced nutrient management, and precision agriculture

demonstrates that even when technologies are profitable, barriers to adopting

new practices can limit their effectiveness. 

Keywords: Sustainable agriculture, natural capital, nonrenewable resources,

renewable resources, environmental services, green technology, integrated pest

management, conservation tillage, enhanced nutrient management, precision

agriculture

Acknowledgments

The authors thank Margot Anderson, William Anderson, Pierre Crosson, Dave

Ervin, George Frisvold, and Michael Toman for their comments and participants

of the ERS-Farm Foundation sponsored workshop for their insights on sustainable agriculture. Linda Calvin, Jorge Fernandez-Cornejo, Ralph Heimlich, Wen

Huang provided the material on conservation tillage, integrated pest management, enhanced nutrient management, and precision agriculture. Paul Johnston

and Dale Leuck provided the material for Appendix 1. Errors in interpretation

are those of the authors. 

1800 M Street, NW

Washington, DC 20036-5831 June 1999
Contents

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

I. The Sustainability Issue— Background . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

II. The Case for a More Sustainable Agriculture . . . . . . . . . . . . . . . . . . . . . . .4

Agricultural Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Soil Erosion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Ground-Water Quantity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Surface-Water Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Ground-Water Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Wetland Conversion Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

An Aggregate Assessment for U.S. Agriculture . . . . . . . . . . . . . . . . . . . . . .10

III. Steering Agriculture in a More Sustainable 

Direction— The Role of Green Technologies . . . . . . . . . . . . . . . . . . . . . . . .12

Integrated Pest Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Conservation Tillage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Enhanced Nutrient Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Precision Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

IV. Can Green Technologies Meet Sustainability 

Goals? Impediments to Overcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Farm Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Economic Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Heterogeneity of the Resource Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Other Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

V. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Appendix 1— Farm Level Case Studies on Profitability-Environment

Tradeoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

Appendix 2— Workshop on the Economics of Sustainable Agriculture . . . . . .37

ii Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
Summary

For U.S. agriculture to continue along a sustainable path of economic development, further production increases must be generated by technologies that are

both profitable and more environmentally benign. In this context, we assess the

role of these “green” or sustainable technologies in steering agriculture along a

more sustainable path. However, the lack of markets for the environmental

attributes associated with green technologies can limit their development. In

addition, simply making a technology available does not mean it will be adopted. Experience with green technologies such as conservation tillage, integrated

pest management, enhanced nutrient management, and precision agriculture

demonstrates that even when technologies are profitable, barriers to adopting

new practices can limit their effectiveness. 

Sustainability extends beyond the economic well-being of the current generation

and reflects the ability of future generations to meet their needs. Sustainability

recognizes that economic well-being relies on goods and services (like food and

clothing) bought and sold in well-functioning markets, as well as goods and

services (like those provided by the environment— e.g., recreation, safe drinking

water, and scenery) not necessarily bought and sold in markets. Sustainability

also requires investing in diverse forms of capital including both human-made

capital (e.g., buildings and machinery) and natural capital (e.g., farmland,

aquifers, lakes, rivers, estuaries, and wetlands).

Agriculture has a unique role to play in sustainability. Agriculture produces

food and relies on natural capital for producing food. Agriculture also accounts

for a majority of land and water use and is a major source of impairment of

rivers, lakes, and estuarine waters. Because both food and natural capital are

necessary for current and future generations, moving along a more sustainable

path of economic development requires effective stewardship in agricultural

production.

Because there is no single indicator of agricultural sustainability, we review

trends in some existing indicators that are linked to sustainability. These indicators include: agricultural productivity, soil erosion, ground-water quantity, surface-water quality, ground-water quality, and wetland conversion rates. While

there is overlap between the services these indicators represent, one can think of

agricultural productivity, soil erosion, and ground-water quantity as indicators of

our ability to provide food to current and future generations at reasonable costs

to consumers. Surface-water quality, ground-water quality, and wetland conversion rates can be thought of as indicators of the environmental impacts associated with agricultural production. When taken as a whole, these indicators are

consistent with a view of agricultural production in the United States where

environmental problems exist, but where many of these problems can be

addressed by thoughtful programs and policies.

Historically, the government has tried to correct many of the environmental

problems associated with agricultural production through various conservation

programs. For example, within USDA, the Conservation Reserve Program

makes payments to farmers to remove highly erodible or environmentally sensitive land from production. Similarly, the Wetlands Reserve Program provides

payments and cost-shares to landowners who permanently return prior convertEconomic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 iii
ed or farmed wetlands to wetland conditions. These payments, albeit imperfectly, take the place of market prices and provide incentives for resource 

conservation.

Recently, “green” or more sustainable technologies are receiving a great deal of

attention because they can potentially improve the environmental performance

of agricultural production without reducing farm production or profits.

However, the lack of markets for the environmental attributes associated with

green technologies can limit their development. Market prices provide a signal

about the scarcity of a resource. In general, research and development and the

adoption and diffusion of new technologies will be directed to conserve those

resources that are most scarce or highest priced; the so-called induced innovation hypothesis. Because the market prices of many environmental services and

natural resources are less than their true value to society, there is less of an economic incentive to develop or adopt technologies that conserve those resources.

In addition, simply making a technology available does not mean it will be

adopted. The adoption and diffusion of green technologies may be slow and

gradual. Experience with green technologies such as conservation tillage, integrated pest management, enhanced nutrient management, and precision agriculture demonstrates that in addition to profitability, three critical factors affect

adoption. First, structural barriers, including the lack of financial capital and

limits on labor availability, may deter adoption. Second, a diverse natural

resource base, including varied soil, water, and climatic resources, make it

worthwhile to adopt these technologies only in some instances. Third, the economic risk of adopting new technologies may inhibit adoption. Barriers to the

adoption and diffusion of green technologies have additional implications.

Because the economic and environmental implications of green technologies

vary by crop and region, there is no one technology that will be sustainable for

every farmer in every part of the country. Because these barriers differ across

the country, there is a premium on knowledge about regional adoption and diffusion constraints and an advantage to a decentralized approach to research and

development and technology transfer.

iv Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 1

Introduction

Agriculture plays a unique role in sustainability, providing food at a reasonable cost to current and future

generations. To assess whether U.S. agriculture is

sustainable, all the costs of agricultural production to

current and future generations must be considered.

These costs include the impact of agricultural production on the environment and stocks of natural capital

(e.g., farmland, aquifers, lakes, rivers, estuaries, and

wetlands). This view of agricultural sustainability is

consistent with the USDA policy on sustainable

development:1

USDA will balance goals of improved production and profitability, stewardship of the natural resource base and ecological system, and

enhancement of the vitality of rural communities. From USDA Secretarys Memorandum

on Sustainable Development (SM 9500-6).

This report highlights the role of agriculture in the

sustainability debate. However, due in large part to

data constraints, no universally accepted indicator of

agricultural sustainability has been developed. For

example, adjusting current measures of farm income

for the environmental impacts of agricultural production cannot be done completely because many environmental services lack market prices, and data

regarding changes in the physical amount of many

types of natural capital is limited (Hrubovcak,

LeBlanc, and Eakin, 1995). Therefore, to evaluate the

sustainability of U.S. agriculture, we review trends in

several indicators (productivity, soil erosion, groundwater quantity, surface- and ground-water quality, and

wetland conversion rates). 

We use these trends to assess the contribution of technological change in furthering the sustainability of

agriculture. For example, historically, to meet the

growing demand for food, new technologies developed through agricultural research and development

were employed in agriculture. These technologies

have contributed to a tremendous surge in agricultural

productivity and output. The empirical accounting

framework used to measure productivity and output,

however, accounts only for conventionally measured

agricultural inputs and outputs. Services from the

environment and the use of natural resources are currently treated as gifts of nature. In addition, any offfarm economic costs attributed to agricultural production are not taken into consideration. For U.S. agriculture to continue along a sustainable path of economic development, further increases in output must

be generated by technologies that add to both the

profitability and the environmental performance of

agricultural production. 

To assess the potential for research and development

to contribute to sustainability, we highlight four practices that are considered more sustainable and have

the potential for widespread diffusion in the agricultural sector. These practices include: integrated pest

management, conservation tillage, enhanced nutrient

management, and precision agriculture. From our

experiences with these practices, we draw lessons

regarding potential impediments to the adoption and

diffusion of more sustainable technologies.

Green Technologies for a 

More Sustainable Agriculture

James Hrubovcak

Utpal Vasavada

Joseph E. Aldy*

*With contributions from Linda Calvin, Jorge FernandezCornejo, Dwight Gadsby, Ralph Heimlich, Wen Huang, Paul

Johnston, and Dale Leuck.

1The impact of agricultural production on the vitality of rural

economies is outside the scope of this report.
2 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

I. The Sustainability Issue — Background

More than a decade has passed since the Brundtland

Commission focused public attention on concerns

regarding sustainability and sustainable development.

According to this Commission's report, a sustainable

path of economic development will "...meet the needs

of the present without compromising the ability of

future generations to meet their own needs" (World

Commission on Environment and Development,

1987).

Since that time, the sustainability issue has appealed

to a diverse, and often unrelated, collection of interest

groups. According to Graham-Tomasi (1991), "....

just about everyone is on the sustainability bandwag -

on, and sustainability has come to mean all things to

all riders on this bandwagon" (p. 82). For example,

Murcott (1997) has identified 57 definitions of sustainable development since 1979. The Brundtland

Commission's vision of sustainability continues to

provide a useful point of departure for public debates

on sustainability (President's Council on Sustainable

Development, 1996). 

Similar to the Brundtland Commission's vision of sus -

tainability, we view an economy to be sustainable

when the economic well-being of both the present and

future generations is maximized. Economic wellbeing, however, goes beyond the traditional view of

economic goods and services, such as food and cloth -

ing, to include goods and services often not bought

and sold in markets, such as the services provided by

the environment (e.g., recreation, safe drinking water,

and scenery). 

Sustainability also extends beyond the economic wellbeing of the current generation and reflects the ability

of future generations to meet their needs. The wellbeing of current and future generations is linked by

extending the traditional view of capital (e.g., build -

ings and machinery) to include farmland, forests,

lakes, rivers, estuaries, and wetlands (natural capital)

(Aldy, Hrubovcak, and Vasavada, 1998). From an

economywide perspective, this definition of sustain -

ability requires investing in an appropriate amount

and mix of human-made and natural capital to ensure

that both market and nonmarket goods and services

are available to society. This includes not only direct

investment in different types of capital but also investment in research and development (R&D) on technologies that can increase the production of goods and

services at a lower cost.

Opinions diverge on whether the actual performance

of many economies is consistent with this vision of

sustainable economic development. For example, in

the Limits to Growth, the current generation's

(over)use of nonrenewable natural resources such as

oil and coal adds pressures to those caused by a fixed

land base to create a bleak outlook for future generations (Meadows and others, 1972). Specifically,

according to this study:

If present growth trends in world population,

industrialization, pollution, food production,

and resource depletion continue unchanged,

the limits to growth on this planet will be

reached sometime within the next one hundred

years.

Simon, Weinrauch, and Moore (1994) provide a contrasting view on the availability of natural resources.

They argue that the relevant measure of resource

scarcity is price, where the highest priced resources are

the most scarce. Based on an evaluation of trends in

the real (inflation adjusted) price of key nonrenewable

natural resources, they conclude that these prices

exhibit a declining trend, casting doubt on the conclu -

sions reached in the Limits to Growth. Similarly,

Nordhaus (1992) concluded that price data for real

resources did not indicate a major turn toward scarcity. 

More recently, the broader concept of the "carrying

capacity" of the environment has been added to the

list of sustainability concerns. Carrying capacity represents a biological limit on the environment's ability

to support human activities. For example, many of

the services the environment provides are regenerative

or renewable but may be exhausted from over-use if

the use rate exceeds the natural regenerative rate. In

effect, carrying capacity represents the limits to

growth caused by society's reliance on and (over)use

of both nonrenewable and renewable resources.

Some have argued that the Earth's capacity to carry

populations may be hindered. For example, Pimentel

and Giampietro (1994) have argued that agricultural

productivity in the United States is already unsustain -

able "given current depletion rates of land, water, and

energy resources." In addition, nitrates and pesticides

were detected in surface and ground water in agricul-
tural regions including the Corn Belt, New York,

Pennsylvania, Florida, and in at least 23 other States

(National Research Council, 1989). This finding has

contributed to concerns that current agricultural production practices have exceeded the environment's

capacity to act as a buffer and assimilate fertilizers

and pesticides before they leach into ground and surface water.

This divergence of opinions regarding the actual performance of economies as well as the requirements

for an economy to be considered sustainable are

shaped, in large part, by differences in perceptions

regarding the substitutability between inputs, now and

in the future. For example, Christensen (1989) argues

that, in most cases, human-made and natural capital

cannot substitute for one another. That is, an increase

in output requires more of both human-made and natural capital. Along this line of reasoning, Daly (1990)

argues that sustainability requires that: (1) harvest

rates of renewable resources (e.g., fish, trees) not

exceed regeneration rates, (2) use rates of nonrenewable resources (e.g., coal, gas, oil) not exceed rates of

development of renewable substitutes, and (3) rates 

of pollution not exceed the assimilative capacities of

the environment.

Solow (1992) argues that it is not possible to preserve

every type of capital and suggests a weaker definition

of sustainability where human-made and natural capi -

tal are allowed to substitute for one another. Under

this definition of sustainability, traditional measures of

income can be extended to account for environmental

goods and services and the value of changes in the

stock of natural capital. Weitzman (1997) has shown

that this extended measure of income can be consid -

ered an indicator of sustainability. Because humanmade and natural capital are allowed to substitute for

one another, the only requirement for sustainability is

that the overall stock of capital, rather than each type

of capital, is not decreasing over time.2

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 3

2This requirement abstracts from population growth. A

more precise sustainability requirement is that the overall rate

of net investment plus the rate of technological change is at

least equal to the growth rate of population.
4 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

II. The Case for a More

Sustainable Agriculture

To evaluate the sustainability of U.S. agriculture we

review trends in the following indicators: agricultural

productivity, soil erosion, ground-water quantity, surface-water quality, ground-water quality, and wetland

conversion rates. While there is overlap between the

services these indicators represent, one can think of

agricultural productivity, soil erosion, and groundwater quantity as indicators of our ability to provide

food to current and future generations. Surface-water

quality, ground-water quality, and wetland conversion

rates can be thought of as indicators of the environmental impacts associated with agricultural production.

Agricultural Productivity

Productivity measures the difference between output

growth and input growth rates. If productivity growth

is positive, then the same output can be produced with

fewer inputs. Figure 1 illustrates the pattern of productivity growth in U.S. agriculture (Ahearn, Ball,

Yee, and Nehring, 1998). From 1948 to 1994, output

in U.S. agriculture grew at an annual average rate of

1.9 percent. A slight decline in input use accompanied this output growth, resulting in an annual productivity growth rate of 1.9 percent compared with 1.1

percent for the nonfarm sector. The prices of agricultural products reflect this productivity growth. Over

the same period, the real prices farmers received for

farm products dropped about 50 percent.

For major field crops in U.S. agriculture, yield growth

parallels the observed pattern of productivity growth.

Yields in major field crops grew rapidly, ranging from

1 to 3 percent per year. Among field crops, yields of

corn, sorghum, and potatoes have grown the most rapidly. Since 1939, corn yields grew at an impressive 3

percent per year while wheat yields grew at around

1.8 percent. Over the same period, the real prices

(market prices adjusted for inflation) for corn,

sorghum, and potatoes dropped about 50 percent

while the real price for soybeans dropped about 30

percent (USDA, National Agricultural Statistics

Service, 1997).

Greater agricultural productivity growth, higher

yields, and lower farm prices have benefited consumers.3 As also captured in figure 1, in 1948, consumers spent 22 percent of their disposable personal

income on food. By 1996, the share of disposable

personal income spent on food had fallen to 11 percent (Manchester and Allshouse, 1997). These data

suggest that, relative to the performance of the economy in general, agriculture has met a part of the sustainability challenge by supplying food to consumers

at a reasonable cost.

Investment in agricultural research and development

(R&D) contributes significantly to productivity

growth. Figure 2 illustrates the pattern of R&D growth

in U.S. agriculture (Fuglie and others, 1996).

24

22

20

18

16

14

12

10 0.5

1.0

1.5

2.0

2.5

3.0

Percent of income 

spent on food

Productivity

Percent Index: 1948=1.0

1948 1958 1968 1978 1988

Sources: Economic Research Service, USDA; Ahearn, Ball, Yee, 

and Nehring, 1998; Manchester and Allshouse, 1997.

Increases in agricultural productivity have resulted in 

lower food prices

Income spent on food and agricultural productivity

Figure 1 Figure 2

Research spending

Real private sector spending on R&D has outpaced State 

and Federal spending

Billions of real dollars

Source: Economic Research Service, USDA; Fuglie and others, 1996.

Private sector

State and Federal

1960

0

1

2

3

4

5

6

7

1970 1980 1990

3Productivity is a better indicator of agriculture's performance than prices because farm programs distort agricultural

prices. 
Beginning in 1960, public research expenditures rose

by 3 to 4 percent per year in real terms up to around

1980, but since then, growth has slowed to 0.7 percent

per year. Although Federal expenditures have

remained flat since 1976, growth of private sector

research has been rapid. Most of the post-1980

growth has come from increased contributions by the

private sector. The private sector now accounts for

more than 50 percent of all agricultural research

funds. If past patterns of R&D persist in the future,

then it may be possible to maintain productivity

growth rates in U.S. agriculture. Maintaining a productivity growth rate greater than the growth rate of

food demand will contribute to the availability of food

at a reasonable cost to future generations. 

Soil Erosion

The link between agricultural production practices, soil

erosion, and farmland's ability to produce output has

been studied extensively. Recent studies have established that soil erosion does not threaten agricultural

output (Alt and others, 1989; Crosson, 1995; USDA,

1989). For example, as part of the Second Resources

Conservation Act (RCA) Appraisal, the U.S.

Department of Agriculture (1989) estimated a 3-percent

loss in overall agricultural output over the next 100

years if farming/management practices remained as

they were in 1982. Similarly, Alt and others (1989)

found that the output effects of soil erosion are small.4

One reason for the lack of an overall effect on output

is that soil management practices have improved considerably in the last 50-60 years. For example, while

cropland use has remained remarkably stable at about

400 million acres since 1938, soil erosion has

declined by an estimated 40 percent (fig. 3) (Magleby

and others, 1995). Most of this decline has occurred

since 1982. In 1982, total erosion from cropland was

estimated at 3.1 billion tons per year or 7.4 tons per

acre per year. By 1992, total erosion from cropland

had declined to 2.1 billion tons per year or 5.6 tons

per acre per year. The post-1982 decline results from

government programs aimed at mitigating the environmental impacts of agricultural production practices

such as the Conservation Reserve Program (CRP) and

the Conservation Compliance provisions of the Food

Security Act of 1985.

Comparing the productivity growth rates with soil

erosion rates over time indicates that productivity can

continue to grow with natural resource degradation.

This is because chemical inputs (e.g., fertilizer) can

substitute for natural resources (e.g., soil fertility), and

technological change can mitigate the negative agricultural productivity effects of resource degradation

on most soils (Cleveland, 1995). However, a failure

to consider off-site effects can affect the supply of

environmental services. For example, soil erosion can

affect surface-water quality with repercussions for

recreational services that depend on this natural capital asset.

While the estimated costs of erosion in terms of lost

output are not nationally significant, they may be significant at the regional or State level. For example,

Faeth (1993) shows negative net economic value per

acre after accounting for soil depreciation and off-site

costs for Pennsylvania's best corn-soybean rotation

over 5 years. This work demonstrates there may be

significant regional variation in resource depreciation

and off-site costs of agricultural production. 

While the impact of erosion on loss of soil productivity is relatively straightforward, it is more difficult to

assess a more comprehensive view of soil quality over

time. For example, overall soil quality can be degraded physically (erosion, compaction), chemically

(salinization, acidification), and biologically (declines 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 5

4Both studies employ a crop production model, Erosion

Productivity Impact Calculator (EPIC), that links production

practices, erosion rates, and productivity.

Figure 3

Cropland and soil erosion

The amount of cropland has remained stable over time while 

soil erosion rates have fallen considerably

Millions of acres of cropland Tons per acre per year of soil erosion

1938 1977 1982 1987 1992

Source: Economic Research Service, USDA; Magle by and 

others, 1995.

Cropland Soil erosion

500

400

300

200

100

0

4

3

2

1

0

Source: Economic Research Service, USDA; Magleby and others,

1995.
in organic matter or soil carbon) (National Research

Council, 1993). Chambers and Lichtenberg (1995)

found the incremental value of organic matter in soil

to be quite high when the initial stock of organic matter is low, but the value diminishes rapidly. For

example, for a conventional farming system, a 1-percentage-point increase in organic matter increased the

value of land by $285 per acre when initial organic

matter was 0.8 percent, but by only $60 per acre when

initial organic matter was 1.9 percent. When organic

matter was greater than about 2 percent, an increase in

organic matter no longer increased land values.

Ground-Water Quantity

In the longrun, an equilibrium is generally reached in

terms of recharges (precipitation, imports from other

regions) and discharges (natural evapotranspiration,

exports to other regions, consumptive use, and natural

outflow) from any ground-water system. However, in

some water resource regions, discharge rates have

consistently been greater than recharge rates, leading

to a decline in the stock of ground water (U.S.

Geological Survey-USGS, 1995). While long-term

trend data for most of the Nation's ground-water

stocks do not exist, measurements of change in the

water level of the High Plains Aquifer (Ogallala) may

indicate the effect of irrigation on ground-water levels. This aquifer provides approximately one-third of 

the ground water withdrawn for agricultural irrigation

in the United States, and supports the agricultural

activity in Colorado, Kansas, Nebraska, New Mexico,

Oklahoma, South Dakota, Texas, and Wyoming

(USGS, 1995).

Figure 4 illustrates the average drop in the water level

of the aquifer in each of these States over two time

periods. For 1940-80, the region's average groundwater level dropped 0.25 foot annually or a total of

about 10 feet. Five of these States experienced

declines in their ground-water stocks while three

experienced no change in their stocks over this period.

From 1980 to 1995, the average ground-water level

for the High Plains dropped 0.16 foot annually or

about 2.4 feet in total. An increase in ground-water

stocks was reported in one State and smaller declines

compared with 1940-80 were reported in four States

(USGS, 1995).

While the total ground-water stock has declined from

1980 to 1995, the stock increased in 1993 and 1994.

The average ground-water level rose 0.21 foot in

1993, and another 0.56 foot in 1994. The reductions

in the rate of decline of the ground-water stock result

from technological advances in irrigation development to increase the efficiency of water delivery and

above normal precipitation in the region (USGS,

1995).

6 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

Water level change (feet)

While the ground-water level in the High Plains continued to fall, the current rate of decline is less than in prior years

Colorado Kansas Nebraska New Mexico Oklahoma South Dakota Texas Wyoming High Plains 

(average)

-4.2

-9.9

-4.79

-33.7

-0.6

-2.76 -3.4

-9.9

-2.39

-11.3

-3.14

-9.8

1.84

0 0 0

-7.52

-4.18

Change in ground-water level in the High Plains

10

-10

-20

-30

-40

0

1940-80

1980-95

Source: USGS, 1995.

Figure 4
The data on ground-water levels in the High Plains

indicate that while ground-water mining contributed

to significant drawdowns in the past, in recent years

the Ogallala has experienced slower withdrawal rates.

The ground-water withdrawals in this region primarily

support irrigated agriculture. The private economic

costs of extracting ground water and the social costs

of ground-water drawdowns are significant. In the

United States, the energy costs of extracting ground

water can range between $11 and $74 per acre annually, and amount to more than $1 billion annually

(USDA, ERS, 1997). These increases in energy costs

are reflected in farm profitability. For example,

Aillery (1995) estimated the returns to irrigation

including the returns to water, fixed capital, and management above variable water costs and net of returns

to dryland alternatives at $33 per acre-foot of water

used in agricultural production.5

However, farmers water costs do not reflect the total

social cost of the extraction, and therefore, their

expenditures on water do not accurately reflect society's demand for ground water. Water suppliers and

farmers treat ground-water stocks as an open resource.

By extracting water at a rate faster than recharge,

water suppliers and farmers draw down the water

level and decrease the aquifer's pressure. This

requires water suppliers and farmers to use more energy per unit of water extracted than under a steadystate or increasing water level scenario. In addition,

ground-water withdrawals can cause land subsidence,

with significant economic consequences (National

Research Council, 1991a).

Surface-Water Quality

Surface-water quality has generally improved since

1974, when monitoring began. In a 1974 survey, the

Environmental Protection Agency (EPA) found that

only about 40 percent of the largest rivers in the

United States were safe enough for fishing and swimming (USEPA). In 1994, 60 percent of the Nation's

surveyed rivers, lakes, and estuaries were safe enough

for fishing and swimming. While surface-water quality has improved over the long term, the EPA has identified agriculture as an important contributor to the

surface-water quality problems that do exist.

According to the EPA's 1996 National Water Quality

Inventory, agriculture is the leading source of impairment in rivers (contributing to impairment of 25 percent of the surveyed river miles), lakes (contributing

to impairment of 19 percent of the surveyed lake

acres, not including the Great Lakes), and the fifth

leading source of impairment to estuaries (contributing to impairment of 10 percent of the surveyed estuary acres) (table 1).6 Primary agricultural pollutants 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 7

5An acre-foot of water is the volume of water required to

cover 1 acre of land to a depth of 1 foot of water; also equal to

325,851 gallons (USGS, 1985).

Table 1Major sources of impairment to rivers, lakes, 

and estuaries

Agriculture is the leading source of impairment in rivers

and lakes and is the fifth leading source in estuaries

Item1 Percent

River miles:

Agriculture 25

Municipal 5

Hydrologic modification 5

Habitat modification 5

Resource extraction 5

Urban runoff 5

Lake acres:

Agriculture 19

Unspecified nonpoint 9

Atmospheric deposition 8

Urban runoff 8

Municipal point sources 7

Hydrologic modification 5

Estuaries (acres):

Industrial 21

Urban runoff 18

Municipal 17

Upstream sources 11

Agriculture 10

CSO's 8

1Examples of sources:

AgricultureCrop production, pastures, rangeland, feedlots, animal

operations.

ConstructionLand development, road construction.

CSO'sCombined sewer overflowsFacilities that treat storm water and

sanitary sewage.

Habitat modificationRemoval of riparian vegetation, streambank 

modification.

Hydrologic modificationChannelization, dredging, dam construction,

flow regulation.

IndustrialPulp and paper mills, chemical manufacturers, steel plants.

Land disposalLeachate or discharge from septic tanks, landfills.

MunicipalPublicly owned sewage treatment plants.

Resource extractionMining, petroleum drilling, runoff from mine tailing

sites.

Urban runoffRunoff from streets, parking lots, buildings.

Source: USEPA, 1998.

6EPA defines impaired waters as waterbodies either partially

supporting uses or not supporting uses (USEPA, 1998).
contributing to surface-water quality problems are

sediment and siltation, nutrients, pesticides, salinity,

and potential pathogens. For example, sediment and

siltation affect 18 percent of surveyed river miles and

10 percent of lake acres (table 2). Similarly, nutrients

affect 14, 20, and 22 percent of surveyed river miles,

lake acres, and estuaries, respectively.

Maintaining surface-water quality is key to supplying

recreational services that both current and future generations demand. For example, sediment and siltation

affect water quality by harming fish, reducing water

clarity, and filling in waterbodies. Ribaudo (1989)

identified the following damages from sediment and

siltation: reduced opportunities for freshwater and

marine recreation and commercial fishing; increased

cost for maintaining roadside and irrigation ditches,

municipal water treatment, and steam power cooling;

and greater chances of flooding. Similarly, nutrients

in waterbodies (from lawn and crop fertilizer use,

sewage, manure) can overstimulate the growth of

aquatic weeds and algae, which then clog waterways,

interfere with boating and swimming, and lead to oxygen depletion (USEPA, 1998).

When prices fail to convey information about the

value placed on these services, feedback effects will

likely be observed on the availability of this asset.

The off-farm economic costs of agricultural pollution

to surface waters appear substantial. Several studies

have found improvements in water quality can yield

significant benefits for individuals (Crutchfield,

Feather, and Hellerstein, 1995). At the national level,

Ribaudo (1989) found that retiring 40 to 45 million

acres of highly erodible farmland through the CRP

would result in national benefits (net present value)

from reduced sediment pollution of $46 million per

year. Comprehensive estimates of the damages from

agricultural pollution are lacking, but soil erosion

alone is estimated to cost water users $2-$8 billion

annually (Ribaudo, 1989). Similarly, Hrubovcak,

LeBlanc, and Eakin (1995) estimated the damages to

surface-water quality from erosion on cropland at

about $4 billion per year. Carson and Mitchell (1993)

conducted a contingent valuation study to assess the

public's value for national water quality. They provided survey respondents with water-quality improvement programs to meet the boatable, fishable, and

swimmable goals of the Clean Water Act. The

authors found that the mean annual willingness to pay

to improve the Nation's water quality from nonboatable to swimmable status is $280 per household or

about $29 billion per year.

Ground-Water Quality

The infrastructure that monitors the Nation's environment cannot accurately depict trends in U.S. groundwater quality. Of 38 States reporting overall groundwater quality, 29 judged their ground water to be good

or excellent. When degradation of ground-water quality does occur, it typically remains a localized problem and agriculture is often the source. Of 49 States

reporting sources of ground-water contamination, 44

cited agriculture as a source (USDA, ERS, 1997).

Recent chemical use trends suggest that long-term

improvements in ground-water quality may occur.

After pesticide use more than doubled between 1964

and 1982, it declined slightly beginning in 1982 due

to a decline in cropland acreage and the introduction

of new pesticides that reduced application rates (fig.

5). The picture with regard to potential chemical toxicity is more complex. An index based on toxicity due

8 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

Table 2Major sources of pollution to rivers, lakes,

and estuaries

Sediment and siltation affect 18 percent of surveyed river

miles and 10 percent of lake acres

Item1 Percent

River miles:

Sedimentation and siltation 18

Nutrients 14

Bacteria 12

Oxygen-depleting 10

Pesticides 7

Habitat alterations 7

Suspended solids 7

Lake acres:

Nutrients 20

Metals 20

Sedimentation and siltation 10

Oxygen-depleting 8

Noxious plants 6

Suspended solids 5

Total toxics 5

Estuaries: (acres)

Nutrients 22

Bacteria 16

Toxics 15

Oxygen-depleting 12

Oil and grease 8

Salinity 7

Habitat alterations 6

Source: USEPA, 1998.
to long-term exposure to small doses shows an 89-

percent decline since 1964. An index based on acute

exposure increased by about 10 percent, and pounds

of active ingredients more than doubled (USDA, ERS,

1997). Maintaining ground-water quality is important

because it affects the supply of safe drinking water for

many communities. Here again, a failure of markets

to convey information about the value that communities place on the quality of a resource can affect the

availability of a resource (safe drinking water) for

future generations.

The evidence of ground-water quality impairment

from agriculture paints an uncertain picture. While

continued monitoring of ground water will clarify the

Nation's understanding of pesticide and nutrient leaching, the risk of ground-water pollution carries significant economic costs.7 Results from contingent valuation studies indicate a very large willingness by consumers to pay to avoid contamination of drinking

water supplies. For example, Sun and others (1992)

and Jordan and Elnagheeb (1993) evaluated the

demand for ground-water protection from agricultural

nitrate and pesticide leaching. Sun and others asked

respondents for their willingness to pay for a protection program that would keep the ground-water quality below EPA health advisory levels in southwestern

Georgia. The annual willingness to pay for this program averaged $641 per household. Jordan and

Elnagheeb assessed the demand for protection from

nitrate contamination of ground-water serving wells

and drinking water utilities in Georgia. The authors

estimated the annual willingness to pay for protection

to average $120 to $150 per household for the different kinds of ground-water users.

Wetland Conversion Rates

Wetlands are an important asset for supplying environmental services. Wetlands provide opportunities

for popular activities such as hiking, fishing, and boating. Similarly, wetlands provide fish and wildlife

habitat, flood retention, and water filtration.

Conversion of wetlands into cropland may increase

the availability of food for the current generation but

can affect the supply of environmental services, for

both current and future generations. Because market

prices may not convey information about the environmental services supplied by wetlands, there is a

propensity to deplete this resource faster than would

be justified by opportunity cost considerations.

The lower 48 States have lost about half of their wetlands since 1780. In 1780, wetlands in the lower 48 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 9

 

1964 1966 1971 1992

0

50

100

150

200

250

Index (1964=100)

Although the total amount of pesticides based on the amount of active ingredients has increased since 1964, an

index based on chronic risk has fallen while an index based on acute risk has remained relatively flat

Pesticide use, chronic and acute risks



Active ingredient Chronic dose index Acute dose index

Note: The chronic risk index combines Reference Dose (indicator of chronic toxicity) and soil half life (indicator of potential

exposure). The acute risk index combines an oral LD50 (dose of a toxicant or microbe that will kill 50 percent of the test 

organisms within a designated period) with the soil half life measure. Source: Economic Research Service, USDA, 1997.

Figure 5

7Monitoring costs for agricultural chemicals have been estimated at $890 million to $2.2 billion for private wells (Nielsen

and Lee, 1987).
States totaled slightly over 220 million acres compared with about 124 million acres in 1992 (USDA,

ERS, 1997). Most of the original and remaining wetlands are in the Southeast, Delta, and Lake States.

The Corn Belt has lost nearly 90 percent of its original wetlands, the Pacific States have lost nearly 75

percent, and the Plains States have lost approximately

50 percent. Between 1954-92, 64 percent of all converted wetland acreage supported agriculture.

Available data suggest that the rates of wetland loss in

the 1980's are dramatically lower than in earlier

decades (table 3). For example, from 1954 to 1974

and 1974 to 1983, the net rate of wetland losses in the

lower 48 States was 458,000 and 290,000 acres per

year. However, from 1982 to 1992, the net rate of

wetland losses in the lower 48 States slowed to about

80,000 acres per year. From 1982 to 1992, almost

11,000 acres per year moved out of agricultural production and into wetlands. 

Several studies have addressed the effects of agricultural production on the economic values of wetlands.

In perhaps the most comprehensive evaluation of the

economic values associated with wetlands, Heimlich

and others (1998) assessed and classified 33 studies as

to the function of wetlands, the goods they provide,

and the economic value of those goods. Examples of

the goods provided by wetlands include: marketed

fish and fur (goods sold in markets by commercial

fishermen and trappers such as blue crabs, fish, oysters, fur trapping); nonmarketed fish and wildlife

habitat; nonmarketed recreation, fishing, and hunting

opportunities; and nonmarketed ecological functions

(nutrient filtering, storm damage). Heimlich and others then estimated the economic losses associated with

the loss in wetlands from 1952 to 1992. Their estimates of the total direct economic damages range from

$421 million for commercial fisheries to $135 billion

for recreation and noncommercial fishing and waterfowl hunting. Based on total wetland losses of 12.9

million acres over that period, they estimate an imputed average value of $10,558 per acre of lost wetlands.

An Aggregate Assessment for U.S. Agriculture

Conclusions regarding the overall sustainability of

U.S. agriculture depend on the vision of sustainability

a researcher adopts. Aside from agricultural productivity, the remaining indicators are not consistent with

a strong vision of sustainability (table 4). Soil continues to erode even though its impact on future agricultural output is small. Ground-water stocks continue to

be depleted, although at slower rates than in the past.

While data are not available to assess changes in the

quality of surface and ground water over time, agriculture is likely the major contributor to impairments.

Agriculture made significant progress toward meeting

the goals of sustainability in the 1980's. The growth

rate of agricultural productivity was 3.3 percent per

year from 1980 to 1994 compared with only 1.4 percent per year from 1948 to 1980. Interestingly, while

productivity was increasing, soil erosion was declining from 3 to 2 billion tons per year, ground-water

depletion rates were falling, and agriculture became a

net supplier of wetlands, helping reduce net wetland

conversion rates over time.

Recent research has integrated environmental and natural resource indicators in a consistent economic

framework. For example, Smith (1992) compared the

10 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

Table 3Wetlands conversions per year, 1954-74, 1974-83, and 1982-92

Wetland loss in 1980's are dramatically lower than in earlier decades

1954-74 1974-83 1982-92

From To From To From To

Item wetlands wetlands Net wetlands wetlands Net wetlands wetlands Net

1,000 acres per year

Agriculture -592.8 -234.8 81.5 -153.3 -30.9 41.8 10.9

Development -54.5 -14.0 0.4 -13.6 -88.6 1.5 -87.1

Other -35.3 -168.1 53.4 -114.7 -16.4 28.8 12.4

Subtotal -682.6 247.8 -434.8 -416.9 135.3 -281.6 -135.9 72.1 -63.8

Deepwater -47.6 24.7 -22.9 -29.0 20.4 -8.6 -20.2 4.8 -15.4

Total -730.2 272.5 -457.7 -445.9 155.7 -290.2 -156.1 76.9 -79.2

Source: USDA, ERS, 1997.
effects of damages associated with soil erosion, wetland conversions, and ground-water contamination to

the value of crops in 1984. His estimates of damages

range from less than 1 to 7.5 percent of the value of

crops grown in the Mountain region to 3.5 to 40 percent of the value of crops grown in the Northeast.

Damages in the Corn Belt range from 6 to 7 percent of

the value of crop output. According to his results,

agriculture's contribution to social welfare far exceeds

the environmental damages and deterioration of the

stock of natural capital resulting from food production.

Similarly, Faeth (1996) paints a picture of an agricultural sector that is improving over time with respect to

environmental damages. Faeth adjusts the agricultural

productivity estimates presented in figure 1 for the

off-site damages associated with soil erosion. From

1977 to 1992, agricultural productivity increased from

2.3 to 2.4 percent per year, reflecting the dramatic

decline in soil erosion over that time.

Lastly, Hrubovcak, LeBlanc, and Eakin (1995) estimate that total farm income should be reduced by

about $4 billion per year when adjustments are made

for agriculture's contribution to the impairments in

surface-water quality and draw-downs in the stock of

ground water. Their adjustments to net farm income

range from 6 to 8 percent and have decreased from

1987 to 1992.8 They note one possible explanation

for the decrease is that policies and programs for controlling soil erosion were effective during this period.

In particular, removing nearly 22 million acres of

highly erodible land from production through the CRP

contributed to a nearly 21-percent decrease in estimated soil erosion on cropland even though planted

acreage for grains increased by 6 percent.

Conservation compliance requirements promulgated

under the Food Security Act of 1985 provided additional incentives for reducing erosion.

These estimates are consistent with a view of U.S.

agriculture where environmental problems exist and

the resource base is depreciating, but the extent of the

effects is in the range that can adequately be

addressed by thoughtful policy.

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 11

Table 4Physical indicators of agricultural sustainability

Indicators give mixed signals with respect to agricultural sustainability

Indicator Year Physical change

Growth rate per year (percent)

Agricultural productivity 1948-80 +1.4

1980-94 +3.3 

1948-95 +1.9 

Billion tons per year

Soil erosion 1938 3.56

1982 3.13 

1987 2.80

1992 2.13 

Feet per year

Ground-water depletion 1940-80 0.25

1980-95 0.16

Surface-water quality Agriculture is leading source of impairment but 

less erosion has likely reduced damages from sediment

Ground-water quality Of 49 States reporting sources of ground-water

contamination, 44 cited agriculture as a source

Acres per year

Net loss of wetlands* 1974-83 153,300

1982-92 -10,900 

* Attributed to agriculture. Sources: USDA/ERS, NRCS; USGS; and EPA.

8These estimated adjustments represent average costs of environmental damages. Marginal costs are likely to be higher. 
12 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

III. Steering Agriculture in a More

Sustainable DirectionThe Role 

of Green Technologies

Generations can share resources in numerous ways.

This study distinguishes between two broad approaches. The first approach directly conserves natural

resources for future generations. This approach has

been, and will continue to be, widely used in government programs. Numerous programs have been instituted to limit environmental degradation and to conserve natural resources. For example, the Food

Quality Protection Act (FQPA) of 1996, Federal

Insecticide, Fungicide, and Rodenticide Act (FIFRA),

and the Federal Food, Drug, and Cosmetic Act

(FFDCA) allow the EPA and the Food and Drug

Administration (FDA) to restrict the use of certain

pesticides based on their risks to human health,

wildlife, ground-water quality, and other environmental effects. Similarly, the Endangered Species Act

(ESA) was enacted as a way to preserve/conserve

plant and animal species that are in danger of extinction (endangered species) or that may become so in

the foreseeable future (threatened species).

With respect to agriculture, USDA offers landowners

financial, technical, and educational assistance to

implement conservation practices on privately owned

land and thereby directly invests in natural resources.

Using this help, farmers and ranchers apply practices

that reduce soil erosion, improve water quality, and

enhance forest land, wetlands, grazing lands, and

wildlife habitat. For example, the CRP was established to reduce soil erosion on highly erodible land

and to achieve other secondary objectives. Similarly,

the Wetland Reserve Program (WRP) provides easement payments and restoration cost-shares to

landowners who permanently return previously converted or farmed wetlands to wetland condition. Most

recently, the 1996 Farm Bill also expanded the

Department's conservation programs with the Wildlife

Habitat Incentives Program (WHIP) and the Farmland

Protection Program. WHIP allows for technical and

cost-share assistance to landowners to develop

improved wildlife habitat. Under the Farmland

Protection Program, USDA leverages Federal funds

with State and local funds to protect farmland.

A second approach, and the focus of this report, operates through a farmer's choice of technologies. This

approach encourages research and development

(R&D) and adoption and diffusion of more sustainable farming practices.9 Investment in these "green

technologies" is currently receiving a great deal of

attention because they promise to augment farm profitability while reducing environmental degradation

and conserving natural resources.

There is a wealth of information in the form of case

studies suggesting that green technologies can be both

economically profitable and environmentally sustainable (see Appendix 1). However, simply because a

practice is available does not mean that farmers will

adopt it. In the long run, the adoption and diffusion of

alternative practices will depend on profitability.

Other factors, such as differences in farm structure

(e.g., crops grown, diversity of output, farm size), economic risk, and geographic location, will also affect

adoption and diffusion rates of green technologies.

To assess what may be the most significant impediments to the adoption and diffusion of alternative production practices, we highlight four practices that are

often considered more sustainable and have been

researched. These practices are: integrated pest management (IPM), conservation tillage, enhanced nutrient management, and precision agriculture. These

practices have either been broadly adopted or have the

potential for wide-scale adoption in agricultural production. For example, farmers have used IPM in the

United States for more than 20 years, and scouting is

used on almost two-thirds of surveyed fruit and nut

acreage and nearly 75 percent of vegetable acres

(USDA, ERS, 1994). Wide-scale adoption of conservation tillage has a more recent history, with farmers

employing mulch-till, ridge-till, or no-till systems on

over 36 percent of planted acres in 1995; up from less

than 18 percent in 1988 (USDA, ERS, 1997).

Farmers also have considerable experience with

enhanced nutrient management practices, although

wide-scale adoption has not occurred. Among the

most recent is an emerging suite of management practices known as precision agriculture.

Each of these practices is "information and management intensive," because a farmer is required to

understand much more than in the past how the physical characteristics associated with farming, such as 

9Adoption refers to the use or intensity of use of a practice at

the farm level. Diffusion refers to the intensity or rate of

adoption at the sector level.
soil type, rainfall, and temperature, interact with managing inputs, such as pesticides, nutrients, and soil, to

affect the production of commodities. Each practice

uses inputs efficiently and may dramatically affect

farm profits, the quality of the environment, and the

pattern of natural resource use. These practices may

improve our indicators of agricultural sustainability

by both increasing food production and mitigating the

impact of current agricultural production practices on

the environment. For example, sediment and siltation

are the primary pollutants of rivers in the United

States (USEPA, 1998). Conservation tillage has significantly reduced soil erosion from farmland and

therefore can potentially improve surface-water quality. Similarly, nutrients are the leading pollutant associated with lakes and estuaries and the second leading

pollutant associated with rivers. Enhanced nutrient

management can reduce the leaching of fertilizers and

manures and can further improve surface- and groundwater quality. IPM can reduce the need for pesticides,

which also improves surface and ground-water quality. Lastly, precision agriculture can improve all facets

of the environmental performance of U.S. agriculture.

Integrated Pest Management

IPM includes various techniques that maintain pest

infestation at an economically acceptable level rather

than attempting to completely eradicate all pests. The

USDA uses the following definition: "IPM is a management approach that encourages natural control of

pest populations by anticipating pest problems and

preventing pests from reaching economically damaging levels. All appropriate techniques are used such

as enhancing natural enemies, planting pest-resistant

crops, adapting cultural management, and using pesticides judiciously" (USDA, Agricultural Research

Service, 1993). IPM monitoring methods include

scouting by regular and systematic field sampling, soil

testing for pests, such as nematodes, using pheromone

odors and visual stimuli to attract target pests to traps,

and recording environmental data, e.g., temperature

and rainfall, associated with the development of some

pests. Pest management practices used in IPM

include biological controls such as natural enemies or

"beneficial" semiochemicals (including pheromones

and feeding attractants) and biopesticides; cultural

controls such as hand hoeing, mulching, and crop

rotation; strategic controls such as planting dates and

location; and plants resistant to some pests. 

While IPM does not exclude the use of synthetic pesticides, the pesticides used in IPM often differ from

those used on a preventive or routine schedule.

Where possible, IPM uses pesticides that target specific pests and decrease toxic exposure to beneficial

organisms. To the extent that IPM decreases pesticide

use, gains in environmental benefits can occur in

terms of improved water quality, decreased probability of wildlife poisonings, and decreased probability of

negative health effects for applicators.

The following provides an operational definition of

IPM to manage insects (diseases). A farmer uses IPM

to manage insects (diseases) if: scouting for insects

(diseases) and economic thresholds are used in making

insecticide (fungicide) treatment decisions, and one or

more additional insect (disease) management practices

among those commonly considered to be IPM techniques are employed (Vandeman and others, 1994).

While many of the techniques under the umbrella

term IPM have been around for some time, and unifying these practices into a cohesive group occurred

about 25 years ago, large-scale adoption of some IPM

techniques on U.S. farms is a fairly recent phenomenon. If current conditions prevail, adopting IPM techniques will reach 75 percent of the vegetable acreage

nationally between 2008-36, except for scouting,

which attains the 75-percent level in the present

decade (Fernandez-Cornejo and Kackmeister, 1996).

For fruit acres, the 75-percent IPM adoption goal will

likely be achieved between 1995 and 2005, except for

scouting which has already achieved this goal

(Fernandez-Cornejo and Castaldo, 1998).

Conservation Tillage

Conservation tillage involves maintaining adequate

soil cover to decrease soil erosion by wind and water.

The following definitions for a set of systems that

manage crop residue may help one better understand

the distinctions between various approaches to conventional and conservation tillage (USDA, ERS, 1994):

Conventional tillage with moldboard plow: Any tillage

system that includes the use of a moldboard plow.

Conventional tillage without moldboard plow: Any

tillage system that has less than 30 percent remaining

residue and does not use a moldboard plow.

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 13
Conservation tillage: Any tillage and planting system

that maintains at least 30 percent of the soil surface

covered by residue after planting to reduce soil erosion by water; or maintains at least 1,000 pounds per

acre of flat, small grain residue equivalent on the surface during the critical wind erosion period where soil

erosion by wind is the primary concern.

Two key factors influence crop residue: the previous

crop, which establishes the initial residue amount and

determines its fragility, and the type of tillage operations prior to and including planting.

Conservation tillage practices include:

Mulch till. The soil is disturbed prior to planting.

Operators use tillage tools such as chisels, field cultivators, disks, sweeps, or blades.

Ridge till. The soil is left undisturbed from harvest to

planting except for nutrient injection. Farmers complete planting in a seedbed prepared on ridges with

sweeps, disk openers, coulters, or row cleaners.

Residue is left on the surface between ridges.

No-till. The soil is left undisturbed from harvest to

planting except for nutrient injection. Planting or

drilling is accomplished in a narrow seedbed or slot

created by coulters, row cleaners, disk openers, inrow

chisels, or rototillers.

Farmers have adopted conservation tillage partly in

response to incentive effects associated with

Conservation Compliance and, in many cases, on a

voluntary basis. As depicted in table 5, adoption rates

have generally increased since 1988. For example, in

1995, only 11 percent or less of acres were tilled

using conventional tillage with a moldboard plow in

corn, northern soybean, southern soybean, or winter

wheat production; compared with as much as 28 percent for northern soybeans in 1988.

Clearly, some individual farmers perceive that the

benefits of adopting conservation tillage outweigh the

costs. Potential private benefits of conservation

tillage include: increased profits, greater convenience,

decreased economic risk, and the potential for reducing erosion. However, all farmers will not find conservation tillage equally attractive because, as was the

case for IPM, the costs and benefits will vary by farm.

For example, studies comparing profitability of conservation and conventional tillage systems provide

mixed results. Several studies have found net returns

do not significantly differ between reduced tillage and

conventional tillage (Duffy and Hanthorn, 1984; Jolly

and others, 1983). Other studies have found conventional tillage has higher returns (Klemme, 1985;

Martin and others, 1991) and yet other studies have

found conservation tillage has higher returns

(Williams and others, 1989).

Enhanced Nutrient Management

Enhanced nutrient management involves efficiently

using nutrients from commercial fertilizers and animal

and municipal wastes. The primary goal of nutrient

management is to sustain an increase in agricultural

production and minimize the environmental damage

from unused nutrients. Enhanced nutrient management practices include altering existing practices by

assessing nutrient needs, timing applications, placing

fertilizer closer to the seed, using alternative products,

changing crop and irrigation management, and using

manure and organic wastes.

Assessing Needs

Soil tests and plant analyses play an integral part in

balancing the supply of nutrients and the need for

nutrients by crops. Soil tests can reveal the level of a

nutrient present in the soil profile available for plant

uptake before the application of commercial fertilizer.

With a soil test, the farmer, in matching the crop's

need for nutrients, can determine whether and how

much additional nutrient should be supplied. 

Timing

Timing nitrogen applications to meet the crop's biological needs can reduce application rates. Effectively

timed applications match the biological needs of a

crop resulting in less nitrogen available for leaching,

runoff, denitrification, and other losses.

Placement

Farmers can employ a variety of improved nitrogen

application practices to place nitrogen fertilizer closer

to the seed or plant for increased crop uptake (Achorn

and Broder, 1991). These include the use of injection,

knifed-in, and side dressing applications. These application practices can increase the efficiency of plant

uptake of nitrogen fertilizer.

14 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
Alternative Products

A farmer can choose a variety of products that differ in

their potential to leach and denitrify. Several

researchers have ranked the chemical stability, ranging

from least stable to most stable, for nitrogen products:

ammonium nitrate, nitrogen solutions, anhydrous

ammonia, urea, and ammonia-based fertilizer with an

added nitrification inhibitor (Aldrich, 1984). Ammoniabased fertilizer can minimize nitrogen loss for land vulnerable to leaching. A nitrate-based fertilizer can best

address areas vulnerable to ammonia volatilization.

Crop Management

Crops in rotation with a nitrogen-fixing legume crop

can reduce nitrogen application needs and use. In

addition, crops in rotation reduce soil insects, improve

plant health, and increase nitrogen uptake efficiency.

Legume crops at an early stage of growth absorb

residual nitrogen in the soil and minimize leaching.

Planting "scavenging" crops between crop seasons can

prevent residual nitrogen buildup during land dormant

seasons. Some nitrogen-scavenging cover crops

include hairy vetch and small grain crops. 

Irrigation Management

The quantity of water in the soil affects the nutrient

concentration in soils and the rate of nutrient movement to the root zone (Rhoades). Too much water can

promote nitrogen leaching, reduce nutrient concentration in soils, and lower plant uptake. Too little water

can result in water stress with respect to plant growth.

Water stress stunts plant growth and reduces crop

yields. Farmers can improve irrigation efficiency, for

example, by switching from gravity irrigation to

sprinkler irrigation, by scheduling and applying irrigation water according to plant need, and by using

improved gravity irrigation practices. 

Using Manure and Organic Wastes

Manure is a source of nutrients and an important

source of organic matter. Organic matter in soil

provides nutrients to crops and acts as a soil conditioner enabling crops to achieve high yields.

Managing nutrients in animal manure for better use

requires testing the manure to ascertain its nutrient

content.

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 15

Table 5Adoption of alternative tillage practices, percent of acres, 1988-95

Adoption rates of alternative tillage practices have increased since 1988

Conventional Conventional

tillage with tillage without Mulch Ridge No

Crop Year moldboard plow moldboard plow till till till

Percent of acres

Corn 1988 20 60 14 * 7

1995 8 49 23 3 17

Northern 1988 28 55 14 * 3

soybeans 1995 8 37 24 1 30

Southern 1988 3 85 5 * 7

soybeans 1995 1 67 7 -- 25

Winter 1988 15 67 16 -- 1

wheat 1995 11 67 15 -- 7

Spring durum 1988 14 63 22 -- 1

wheat 1995 6 67 22 -- 5

Total 1988 19 63 13 * 5

1995 8 56 19 1 16

* = included with no till.

Source: USDA, ERS, Agricultural Resources and Environmental Indicators (1997).
Precision Agriculture

Precision agriculture encompasses a range of management practices that attempt to achieve optimal

crop, livestock, or forestry output by using information to adjust inputs to expected soil, weather, and

environmental conditions (National Research

Council, 1997). Precision agriculture is simply a

more disaggregated version of the kinds of best management practices already recommended at the field

scale (Ogg, 1995). Furthermore, precisely matching

fertilizer and pesticide inputs to the capabilities and

needs of the crop for small areas and exactly when

the crop needs the inputs limits the amounts of these

materials that can escape to the environment. Some

evidence suggests precision agriculture can reduce

the amount of chemicals applied and can reduce the

level of residual nitrogen (Kitchen and others, 1995).

Information technologies used in precision agriculture cover the three aspects of production: data collection or information input, analysis or processing of

the precision information, and recommendations or

application of the information.

Data Collection

Data collection consists of two major components:

data collected in advance of crop production, and data

collected in "real time" as production activities occur.

To collect data at precise locations, a farmer can use

the global positioning system (GPS) satellite data

alone, or use differentially corrected for positional

error with supplemental data (DGPS). GPS/DGPS

location information enhances the spatial accuracy of

the data (National Research Council, 1995).

Data collection technologies operating in advance of

crop production include grid soil sampling (Goering,

1993), yield monitoring, remote sensing (Jackson,

1984; Moran and others, 1997), and crop scouting

(Johnson and others, 1997). These provide basic

information on the conditions under which production

occurs or will occur. A farmer can apply each to crop,

forage, or tree production, although the frequency,

timing, and density of sampling will likely vary

between production systems.

Other data collection, known as "local" sensing, takes

place nearly simultaneously with management

(Morgan and Ess, 1996; Sudduth and others, 1994). 

For example, probes thrust into the soil on the front of

fertilizer spreaders continuously monitor electrical

conductivity, soil moisture, and other variables and

predict soil nutrient concentrations to instantaneously

adjust fertilizer application at the rear of the spreader

(Birrell, 1995; Colburn, 1991). Other examples

include optical scanners that detect soil organic matter, or "recognize" weeds to instantaneously alter the

amount of herbicides applied (Gaultney and Shonk,

1988; McGrath and others, 1990). These "local" sensors do not need GPS location capability, but a farmer

may use them in association with a GPS for entry into

a field geographic information system (GIS). In livestock production, electronic ear tags can trigger automated feeding bins that provide (or withhold) a precise ration for specific animals (AgWeek, 1996). 

Analysis or Processing

The precise data can improve productivity only if a

farmer can analyze or process the information to

adjust management. The principal technology used to

integrate spatial data coming from various sources is

the GIS. This is primarily an intermediate step,

because data collected at different times on the basis

of different sampling regimes and different scales

must be combined in space (and time) for use with

subsequent decision technologies (Usery and others,

1995). Decision technologies take three forms:

process models, artificial intelligence systems, and

expert systems (National Research Council, 1989,

1996). Process models use frequent time-steps to

simulate the processes of crop, livestock, or forest

growth, or generation and movement of potential pollutants through the environment. Artificial intelligence systems use more heuristic or empirical decision rules (rather than the theoretically based relationships in most process models) to reach conclusions

about appropriate management techniques. Expert

systems incorporate the "rules of thumb" used by

human experts that match the conditions reflected in

the input data to reach recommendations (McGrath

and others, 1995).

Application

Ideally, a farmer can adjust production inputs for each

corn plant, animal, or tree to optimize production

according to physical, economic, and environmental

goals. In practice, technology limits how small an

area can be addressed and how finely calibrated input 

16 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
applications can be controlled (Chaplin and others,

1995). Variable rate application is used to describe

precise control of inputs, which can include fertilizer

and micronutrient application, liming, seed variety

and rate, pesticides, irrigation water and drainage, and

livestock feed. Also, a farmer may use selective harvest, expressed in the timing of crop harvest to optimize quality aspects, as rotational grazing in livestock

systems, or by selective thinning in forestry. 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 17
18 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

IV. Can Green Technologies Meet

Sustainability Goals? Impediments

to Overcome

In the United States, the agricultural sector has significantly increased its ability to produce food at a lower

cost, implying that it takes fewer resources to produce

a given amount of output. Increased use of machinery

and equipment, the introduction of hybrid seeds, and

improved management practices have all contributed

to significant increases in agricultural output on essentially the same amount of cropland. In the livestock

sector, improved management practices have also

resulted in impressive gains in output growth.

This long-term view of technological evolution in the

United States suggests that farmers continually adapt

management practices to changing economic conditions. While production systems currently employed

in the United States have evolved with the primary

objective of maximizing profits, other objectives, such

as improved environmental quality, have grown in

importance. Current agricultural practices bear

increasing criticism for compromising these objectives. 

However, the private sector has little incentive to conduct research and development (R&D) on practices

that produce habitat for wildlife, more scenic landscapes, or improved surface- or ground-water quality

because these goods either lack market prices or the

market prices that exist do not fully reflect societal

values. Theories associated with endogenous technological change suggest private sector R&D will focus

on increasing the output of relatively scarce goods and

services, as reflected by market prices. Therefore, to

the extent market prices do not fully reflect society's

true scarcity value for environmental goods and services, there will be an under-investment in R&D on

practices that produce those goods.

Similarly, private sector R&D will also focus on practices that conserve or augment the limiting factor in

production as reflected in the relative prices of factors

of production. This theory of induced innovation

dates back to the work of Hicks (1932) and has been

extended and applied to agriculture by Hayami and

Ruttan (1985).10 For example, if labor in agriculture

is scarce, as reflected in relatively high or increasing

wage rates, private sector R&D will focus on practices that save labor (e.g., R&D will focus on inputs

such as machinery and equipment that can substitute

for labor). Similarly, because land is priced, the private sector has some incentive to conduct R&D on

land saving, and therefore cost-reducing, practices

(e.g., R&D will focus on inputs that can substitute for

land such as fertilizers). In addition, the private sector will limit R&D on conserving natural resource

stocks. 

If complete property rights existed for environmental

goods, market prices would better reflect society's

preferences and the private sector would optimally

invest in R&D to supply them (Ervin and Schmitz,

1996). Also, the dynamic path (i.e., the evolution of

technology) is skewed toward more efficient production of food rather than environmental services. This

indicates that society under-invests in and undersupplies more sustainable agricultural practices (i.e., the

practices that are developed do not fully capture society's preferences for environmental goods and services). The future direction of R&D is important

because, as stated, most of the recent R&D growth

has resulted from increased contributions from the private sector and there will be greater pressure to develop practices that increase marketed outputs or conserve marketed inputs rather than practices that

increase nonmarketed outputs or conserve nonmarketed inputs.

Some production practices have the potential for winwin outcomes, with less environmental damage and

higher farm profits. The results presented in table 6

suggest just such an outcome when fresh market

tomato growers adopt IPM techniques. Insecticide

use is negatively and significantly related to IPM use

for insects. Similarly, fungicide use is negatively and

significantly related to IPM use for diseases. An

increase in the probability of IPM use for insects by

10 percent is estimated to decrease the number of

insecticide applications by 4 percent. A 10-percent

increase in the probability of IPM use for diseases is

estimated to decrease the number of fungicide applications by 1 percent. The effect of IPM use on profits

is positive but small. A 10-percent increase in the

probability of IPM use for insects would increase

variable farm profits by an estimated 0.1 percent,

while a 10-percent increase in IPM use for diseases

would increase variable profits by an estimated 2.7

percent. Similar results are obtained for grape grow10Olmstead and Rhode (1993) describe technological innovations in response to the rise in the relative price of one input as

the "change variant" and technological innovation aimed at

reducing the use of a relatively expensive input as the "level

variant." For an alternative to the induced innovation hypothesis, see Olmstead and Rhode (1993).
ers. IPM adopters reduced the use of insecticides and

fungicides relative to nonadopters, and the impact on

profits was positive albeit small (Fernandez-Cornejo,

1998).

Among fresh market and processed strawberry producers, however, adopters of IPM for diseases apply

significantly more fungicides than nonadopters.

Adopters of IPM for insects apply more insecticides

than nonadopters for growers of processed strawberries but the effect of IPM for insects on insecticide

use among fresh market strawberry producers is not

significant. It is unclear if the added fungicides and

insecticides represent any additional environmental

risk. In some cases, operators may use less environmentally damaging pesticides but in greater quantities.

Finally, no significant differences between adopters

and nonadopters were observed for orange growers in

California and Florida. Both groups exhibited similar

yields, profits, and pesticide applications (FernandezCornejo and Jans, 1996)

Similarly, conservation tillage has been widely adopted throughout U.S. agriculture and the onfarm productivity effects of soil erosion have largely been controlled. However, the off-site water quality impacts of

soil erosion remain an area of concern. For example,

Osborn and Konyar (1990) estimated the off-farm

benefits of the CRP (improved surface-water quality,

lower damages from windblown dust, and enhancements to wildlife) were five times greater than the

onfarm benefits associated with preserving soil productivity. Similarly, the Conservation Compliance

and Sodbuster provisions of the Food Security Act of

1985 have proved to be effective erosion control tools

providing a social dividend of over $2 for every dollar

of combined public and private expenditures required

by the compliance provision (USDA, ERS, 1994).

The positive net social benefit associated with

Conservation Compliance suggests conservation

tillage has been effective in reducing soil erosion.

However, reducing soil erosion even more may be

appropriate from society's perspective.

Lastly, much of the enthusiasm for precision agriculture is based on the belief that, environmentally it

must make sense to match input application to plant

needs. Precisely matching fertilizer and pesticide

inputs to the capabilities and needs of the crop for

small areas and exactly when the inputs are needed

appears to be a logical way to limit the amounts of

these materials that can escape to the environment.

Unfortunately, there is little empirical evidence available that current implementation of precision agriculture actually reduces delivery of pollutants to ground

and surface water and the atmosphere, relative to conventional techniques.

There is evidence that precision agriculture can reduce

the amount of chemicals applied, and limited evidence

that it can reduce the level of residual nitrogen. For

example, comparisons between economic optimum

nitrogen (EONR) fertilization rates using variable and

conventional methods based on plot data from two

soils in Minnesota showed reductions in average

EONR of 34 to 54 percent using variable rates (Vetsch

and others, 1995). Similarly, comparisons on

Missouri soils show little difference in yield, but

decreased unrecovered nitrogen on poorer soils with

variable rate versus standard rate nitrogen application

(Kitchen and others, 1995).

It is, however, possible to envision situations where

precision agriculture can exacerbate potential environmental problems associated with crop production. For

example, a farmer could obtain increased soil cover

on steeper slopes through variable rate technology

(VRT) application that could reduce soil erosion from

parts of the field; however, increased nitrogen applied

to these slopes could increase potential losses to the

environment if other yield-limiting factors reduce

nitrogen uptake. In another example, areas with

droughty soils due to rapid percolation may have

lower soil nitrogen levels due to greater leaching losses. VRT nitrogen application could exacerbate leachEconomic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 19

Table 6Impacts of IPM adoption on profits and on

pesticide use

In some cases, IPM can potentially improve the environment and increase profits 

Fresh Fresh Processed

Item tomatoes strawberries strawberries

Percentage change in 

pesticide use due to a 

10-percent change in:

IPM for insects -4 ns 6.7

IPM for diseases -1.1 4.6 11.5

Percent change in farm 

profits due to a 10-percent

change in:

IPM for insects 0.1 ns ns

IPM for diseases 2.7 .3 -1.7

ns: not statistically significant from zero.

Source: Fernandez-Cornejo, 1996a and 1996b.
ing if additional nitrogen is applied to counteract losses on these soils. While these practices have the

potential for win-win outcomes, such as less pesticide

or nitrogen use and higher farm profits, farmers adopt

and implement more sustainable practices based on

private market incentives. 

While complete property rights and market prices that

reflect society's true values for environmental goods

and services are necessary for ensuring a socially optimal amount of investment in R&D in more sustainable or green technologies, constraints on adopting

and diffusing more sustainable or green technologies

exist. These constraints are similar to those that slow

the adoption and diffusion of any new practice.

Experience with green technologies such as conservation tillage, integrated pest management, enhanced

nutrient management, and precision agriculture

demonstrates that in addition to profitability, three

critical factors affect adoption. First, structural barriers, including farm size and labor availability, may

deter adoption. Second, a diverse natural resource

base, including varied soil, water, and climatic

resources, makes it worthwhile to adopt these technologies only in some instances. Third, the economic

risk of adopting new technologies may inhibit adoption. Correctly identifying constraints is important

because these barriers can significantly (and perhaps

unnecessarily) increase adoption costs, limit diffusion

rates, and reduce the effectiveness of more sustainable

or green technologies. Similarly, the efficacy of public policies aimed at encouraging the diffusion of

more sustainable technologies will be limited if they

are not designed to overcome the correct constraint.

A policy aimed at increasing diffusion rates of sustainable practices among small farm operators by

reducing the cost of acquiring information will not be

as effective if the real constraint is limited access to

credit or the inability to mitigate risk.

Farm Structure

The findings of Fernandez-Cornejo (1996b) and others (1994) reinforce the expectation that farm structure is an important element in adopting IPM (table

7). Farm size affects IPM adoption for vegetable

growers in Florida and Texas. Large farms are more

likely to adopt IPM than smaller farms. The availability of operator and unpaid family labor is also 

hypothesized to have a positive influence on IPM

adoption.11

As McNamara and others (1991) argue, IPM requires

a substantial amount of the operator's time that may

compete with off-farm labor opportunities. The

results in table 7 support this view. The availability of

operator and unpaid family labor is significantly and

positively associated with IPM adoption in Florida,

Texas, and Michigan. Moreover, the significant and

negative effect of livestock production on IPM adoption in all three States reinforces the hypothesis that

the availability of managerial time is essential for IPM

adoption. The managerial time constraint may be

binding, especially for some livestock industries such

as dairy and poultry. Because IPM does not require

land-tied investments, land tenure is not expected to

affect IPM adoption.12

Farm structure is also important in determining adoption of no-till technology. Unlike IPM, which

requires a greater commitment of an operator's time,

no-till technology requires a farmer to spend less time

on field operations. According to one study, 24 percent of farmers adopted no-till to reduce time on field

operations during critical seasons (Rahm and

Huffman, 1984). Farmers with off-farm work view

fewer field operations with time-critical components

as an advantage of conservation tillage. As off-farm

activities increase, a farmer has less time and flexibility for farm operations and the probability of adopting

no-till technology increases.

Farm structure also affects the likelihood of farmers

adopting enhanced nutrient management practices.

For example, timing nutrient applications for the

growing season, when it is optimal for plant growth,

may serve as a disincentive to farmers because a

farmer's opportunity cost of labor and application

logistics may be significantly higher during the late

spring and growing season than during the fall. This

may lead many farmers to apply nitrogen during the

fall and spring rather than during the growing season.

Amacher and Feather (1997), for example, found

there was less chance of adopting enhanced nutrient

20 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

11Operator labor measures the amount of time that the operator dedicates to farm activities and is inversely related to offfarm labor of the operator. 

12Landowners may influence the adoption decisions of their

tenants. 
management practices if farmers perceived them as

more labor intensive, more expensive to use, or more

difficult to use.13

While timing may act as a disincentive to adopt

enhanced nutrient management practices for some

farmers, improved placement may conserve time and

energy by reducing trips across the field. By combining fertilizer placement with other field operations,

such as cultivation, planting, and herbicide applications, a farmer can eliminate a trip across the field,

thereby conserving energy. The per acre operation

(both fixed and variable costs) of injection applications may cost more than the per acre operation of

broadcast applications. However, by applying less

fertilizer, the overall cost (operation and nitrogen fertilizer costs) is lower. Similarly, Amacher and Feather

(1997) note that identifying and packaging certain

enhanced nutrient management practices such as

legume crediting and split nitrogen applications as

bundles is more effective at increasing the adoption

and diffusion of alternative practices than if the practices were introduced individually.

Economic Risk

Economic risk is also critical in the farmer's decision

to adopt a new technology for pest management.

When farmers use a pest control strategy, the effects

of this strategy on mitigating crop loss are uncertain

(Greene and others, 1985). The results presented in

table 7 support the idea that early adopters are more

inclined to risk-taking than nonadopters. In table 7,

risk aversion is measured as a combination of the

effects of three variables: the debt-to-asset ratio, the

decision to purchase crop insurance, and number of

vegetable crops grown. Bultena and Hoiberg (1983)

empirically support this view, finding that adopters

are less risk-averse than nonadopters. Kovach and

Tette (1988) found users of apple IPM indicate "a

greater willingness to accept some economic risk to

use all the scientific knowledge available to protect

their crop." However, they reported a large percentage of non-IPM farmers preferred to spray on pesticides as insurance. 

As with IPM, a new tillage technology involves an

economic risk because the results vary substantially

by site-specific conditions. The advantages of the

various tillage systems depend on the soil and weather

characteristics of a farmer's field. Many believe conservation tillage is profitable on light, well-drained

soils. In semi-arid areas, farmers find the ability of

conservation tillage to retain soil moisture attractive.

A longer growing season may favor conservation

tillage because the crop residue cover keeps the soil

cooler in the spring and retards seed germination.

Alternatively, a shorter growing season could favor

no-till systems because these systems require less

field work in a short period of time (Rahm and

Huffman, 1984).

While fertilizer applications during the growing season can minimize nitrogen loss, such a strategy in

some areas may conflict with a producer's risk considerations (Huang and others, 1996). For example,

uncertain weather conditions may shorten the application window for growing season applications, increasing the economic risk of a yield loss from inadequate

nitrogen availability. The impact of economic risk on

adopting improved nutrient management practices

will vary with farmers' risk attitudes, crop, climate,

and other practices. 

Huang and others (1996) have shown that a risk-neutral farmer may find it economically optimal to "overEconomic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 21

Table 7Factors affecting IPM adoption

Because IPM is labor intensive, greater labor availability

increases the probability of adopting IPM

Explanatory variable Florida Texas Michigan

Farm structure:

Farm size Increase Increase ns

Operator labor Increase Increase Increase

Unpaid family labor Increase Increase Increase

Livestock production Decrease Decrease Decrease

Irrigation Increase Increase Increase

Economic risk:

Risk aversion1 Decrease Decrease Decrease

Resource heterogeneity:

Regional proxy2 Decrease ns nc

Increase: An increase in an explanatory variable increases the probability

of adoption. For example, an increase in farm size increases the probability of IPM adoption.

Decrease: An increase in an explanatory variable decreases the probability

of adoption. An increase in risk aversion will decrease the probability of

adoption.

ns: not statistically significant at the 10-percent level. nc: not included.

1Risk aversion is the combination of the effects of three explanatory

variables: the debt-to-asset ratio, the decision to purchase crop insurance,

and number of vegetable crops grown.

2A farm located in the southern part of Florida is less likely to adopt

IPM.

Source: Fernandez-Cornejo and others, 1994.

13Amacher and Feather (1997) define enhanced nutrient

management as: manure crediting, legume crediting, and split

nitrogen application.
apply" nitrogen. The likelihood of over-application

increases as the probability increases that inclement

weather will keep the farmer out of the fields during

the growing season. In a stylized example, Huang

and others estimate that if the probability that a farmer

cannot access the field during the growing season is

10 percent, it is economically optimal to over-apply

nitrogen by 11 pounds per acre (table 8). However, if

the probability of not being able to get into the field

increases to 20 percent, it becomes economically optimal to over-apply nitrogen by 62 pounds per acre.

In addition to over-applying nitrogen, the probability

of farmers being unable to get into the field during

the growing season to fertilize (e.g., because of rain)

also affects the economically optimal timing of nitrogen. When the probability that a farmer cannot access

the field during the growing season is only 10 percent,

it is economically optimal for the farmer to apply 85

percent of the nitrogen (144 pounds per acre) during

the growing season, when it is potentially less environmentally damaging, and only 15 percent of the

nitrogen (25 pounds per acre) in the spring, when it is

potentially more environmentally damaging (table 9).

However, when the probability that a farmer cannot

access the field during the growing season increases

to 20 percent, it is economically optimal to apply only

33 percent of nitrogen (72 pounds per acre) during the

growing season and 67 percent of the nitrogen (148

pounds per acre) in the spring.

The estimated environmental impacts are magnified if

we assume a farmer is risk averse. In this case, not 

only does a risk-averse farmer apply greater amounts

of nitrogen than a risk-neutral farmer, but the riskaverse farmer has a greater tendency to apply more

nitrogen in the spring than during the growing season.

The characterization of risk may be important in altering production practices because Bosch and others

(1994) estimate that 45 percent of farmers can be

characterized as risk averse.

The implications of economic risk are important for

other practices as well. For example, farmers may

undermine many of the benefits associated with precision agriculture if they are unable or unwilling to

apply the changes in methods or rates at the most

appropriate time.

Heterogeneity of the Resource Base

IPM adoption in the United States also varies significantly across States and crops. While it is difficult to

compare IPM adoption in hot, humid climates, favoring the development of pests (e.g., Florida) to IPM

used in more moderate climates (e.g., California), certain factors appear to affect the adoption decision similarly across regions of the country. Locational factors, such as soil fertility, rainfall, and temperature

also influence the profitability of IPM. The physical

environment of the farm may affect profitability

directly through increased fertility, and indirectly

through its influence on pests. The results for vegetable growers, presented in table 7, suggest farm

location proxies (Regional Proxy) for weather and 

22 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

Table 8Economic risk and nitrogen application rates

As the probability that a farmer cannot access the field

during the growing season increases, it is economically

optimal for a farmer to apply greater amounts of nitrogen

Probability a farmer cannot

access the field during the Optimal

growing season application rate Revenue 

Percent lbs./acre $/acre

0 158 $306

10 169 $280

20 220 $271

Source: Huang, Shank, and Hewitt, 1996.

Table 9Economic risk and nitrogen application timing

As the probability that a farmer cannot access the field

during the growing season increases, it is economically

optimal for a farmer to apply greater amounts of nitrogen

during the spring, when it is potentially more environmentally damaging

Probability a farmer cannot

access the field during the Growing

growing season Spring season 

Percent lbs./acre lbs./acre

0 0 158

10 25 144

20 148 72

Source: Huang, Shank, and Hewitt, 1996.
soils do have a significant effect on pesticide demand,

yields, and farm profits.14

As soil becomes finer and denser, the probability of

corn farmers' adopting no-till decreases.

Alternatively, farmers with well-drained soils (those

with high leaching potential) are more likely to adopt

no-till (Calvin and Brown, 1996). Conservation

tillage generally improves soil quality by increasing

soil biological activity and organic matter content.

However, research on the effect of conservation

tillage on yields has demonstrated no general trend,

and the results depend on several farm variables in

addition to the choice of tillage. A study of Indiana

corn and soybean production showed yield potential

varies with tillage, soil type, and rotation. No-till

yields can exceed conventional yields in corn (after

soybeans) on sloping, well-drained soils (Doster and

others, 1983). Other research indicated that conventionally tilled corn yield exceeded no-till corn yields

and that rotations can have more impact on yields

than tillage (Martin and others, 1991).

Conservation tillage can also conserve soil moisture

and, in semi-arid areas, farmers may consider this

more important than erosion reduction considerations

(Williams, 1988). Studies have generally found

increased yields for crops in conservation tillage over

conventional tillage in semi-arid areas, and the yield

effect may result from higher soil moisture (Williams,

1988; Williams and others, 1990). A study of dryland

wheat in Washington found yields with conservation

tillage exceeded those with conventional tillage in dry

years and equaled yields of conventional tillage in wet

years (Young and others, 1993). Similarly, a study of

spring wheat production in eastern Montana demonstrated no-till wheat had the highest yield and return

to land, labor, and management of the various tillage

and rotation systems examined (Aase and Schaefer,

1996). 

The need for nutrient management varies with the

location-specific characteristics of a farm. For example, the need for nitrification inhibitors varies with

location. Potential economic benefits exist in areas

where soils either drain poorly or drain excessively; 

farmers employ no-till cultivation; farmers apply

nitrogen in the fall; crops grown (such as corn)

require a large amount of nitrogen fertilizer; and

excessively wet soil conditions prevent the application

of nitrogen in the growing season (Hoeft, 1984;

Nelson and Huber, 1987; Scharf and Alley, 1988).

The greatest potential benefit occurs when farmers use

nitrification inhibitors at or below the optimal nitrogen application rate. However, recent survey results

reveal that corn growers in the Corn Belt likely apply

more nitrogen fertilizer when they also use a nitrification inhibitor. Such a practice not only diminishes the

economic benefit associated with using a nitrification

inhibitor, but also increases the amount of residual

nitrogen left on the field for leaching (Huang and

Taylor, 1996).

Other Factors

Conservation tillage requires fewer trips across a field

and saves the operator time and fuel. Farmers began

adopting no-till during the energy crisis of the early

1980's to save fuel (Ladewig and Garibay, 1983). A

1981 survey showed that although Ohio farmers considered savings in fuel and labor the most important

reasons for adopting conservation tillage, erosion and

water quality issues were also very important

(Ladewig and Garibay, 1983).15 Another study found

that 46 percent of farmers who adopted no-till considered both cost and time savings and conservation

goals in their decision (Gadsby and others, 1987).

Budgets prepared for an analysis of a wheat-fallow

rotation in Kansas demonstrated labor costs and fuel

and oil costs decreased by 32 and 35 percent, respectively, for conservation tillage relative to conventional

tillage (Williams, 1988). Similarly, in Michigan,

labor and fuel and oil costs decreased by 47 and 64

percent, respectively for corn grown with conservation compared to conventional tillage (Krause and

Black, 1995). 

Conservation tillage may also involve a decline in

machinery costs. Initially, adopting any new technology may require new or modified machinery.

Eventually, costs would likely decline because conservation tillage requires a smaller machinery complement (USDA, ERS, 1994). However, for some farmers an initial investment in machinery could pose an 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 23

14While weather, soil type, and other locational variables

may affect the adoption decision, statistical considerations

often limit their use. Dummy variables for States or regions

within a State serve as locational proxies to account for the

effect of environmental factors on adoption.

15Surface residue can slow runoff and filter out sediment and

sediment-adsorbed chemicals that can reduce the pollutant

concentrations and quantity of runoff.
obstacle to adopting conservation tillage (Doster and

others, 1983; Epplin and Tice, 1986; Krause and

Black, 1995).

According to conventional wisdom, pesticide use

increases with the adoption of conservation tillage to

compensate for a reduction in tillage operations that

controlled weeds. Empirical evidence on the link

between adoption of conservation tillage technology

and herbicide use contradicts this conventional wisdom. Duffy and Hanthorn (1984) found little difference in herbicide use between conventional and conservation tillage for corn and soybeans. Baker and

others (1987) rejected the hypothesis that pesticide

use increases with conservation tillage. Lin and others (1993) also investigated pesticide use under a

range of tillage options. They looked at a continuum

of tillage operations including no-till, ridge-till,

mulch-till, conventional tillage without a moldboard

plow, and conventional tillage with a moldboard plow.

They found herbicide use increased when they compared the most extreme change from conventional

tillage with a moldboard plow to no-till. However,

among some of the more intermediate tillage categories, pesticide use did not significantly change. A

study of herbicide use by tillage system by Bull and

others (1993) also proved inconclusive.

Some farmers may also employ crop rotations with

leguminous crops to supply nitrogen to the field.

While such rotations increase nitrogen to crops and

decrease susceptibility to pests and diseases, farmers

generally earn greater profits through monocultures of

crops. For example, corn that received deficiency

payments and was in rotation with soybeans generally

was less profitable than continuous corn production in

Iowa (Huang and Lantin, 1993) and Nebraska (Huang

and Daberkow, 1996). The relative profitability of

monoculture may be partially attributed to deficiency

payments received by participation in a commodity

program. With the phase-out of crop subsidies (elimination of deficiency payments), rotations may become

more competitive. 

While animal waste could serve as an inexpensive and

significant supply of nitrogen, the economic benefits

of manure for crop production appear limited by

available storage and the transportation distance

(Bouldin and others, 1984). The effects of storage 

and transportation distance vary by crop production

region. Numerous studies have shown the economic

benefits of use of manure in crop production. For

example, farmers in Iowa have found application of

manure in corn production to be profitable (Chase and

others, 1991). Transfer of poultry litter from the litter-surplus areas to litter-deficiency areas in Virginia

is economically viable (Bosch and Napit, 1992). 

Precision agriculture will be more valuable in situations where farmers work with more variable resource

conditions than in situations with relatively uniform

resource conditions. While operators know the current costs of equipment associated with precision agriculture, the rapid adoption and evolution of the technology will cause future costs to fall. We know much

less about the labor required, the amount of time

needed to integrate the systems and keep them running, and the costs of true custom rates if "unbundled"

from other services provided by farm chemical and

input dealers. 

The costs presented in table 10 have been developed

from the literature by adjusting assumptions about

useful life, repair costs, amortization, soil sample grid

size, and the number of acres. A difference exists

between what these practices will cost farmers who

might spread the costs over 1,000 acres and, hypothetically, have much higher opportunity costs for labor,

and the costs from a dealer who can spread the cost

over more acres and hire labor at relatively low rates.

Most of the costs a farmer would bear accrue from

acquiring information about soils, yields, and pest

problems. Grid soil sampling costs $3 to $7 per acre

on a 3-acre grid at plow depths, but can increase 3 to

5 times if rooting depths for the crop (such as sugar

beets) are sensitive to fertilizer concentrations at

greater depth. Yield monitors for common field crops

like corn and soybeans cost $1.45 to $1.66 per acre,

assuming 1,000 acres are farmed. A global positioning system (GPS) receiver for precise location information adds another $0.75 to $1.45 per acre, depending on whether a farmer needs a differential correction. Weekly scouting during the cropping season

costs a minimum of $4 per acre for common field

crops. To take advantage of the precision information

obtained, farmers need to add variable rate controllers

to sprayers and applicators (VRT), adding $1 to $5

per acre for retrofitting existing equipment. Variable 

24 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
fertilizer application from a dealer, where available,

adds an additional $3 to $7 per acre.16

Chemical dealers will more likely make the major

investments in precision agricultural equipment

because they can spread the costs over many farmers'

fields, reducing the cost per acre. Assuming a dealer

will treat a total of 5,000 acres, compared to 1,000

acres for an individual farmer, the costs for differential GPS receivers and the differential correction systems needed range from $0.23 to $0.79 per acre,

about half of what the farmer would incur. The ATV

or pickup-mounted grid sampling system would cost

$0.62 to $1.60 per acre, assuming a 5-year useful life.

This does not consider the labor costs of collecting the

samples or the laboratory costs of analyzing them.

Equipment for variable rate lime application by dealers costs about $1 per acre. Variable rate equipment

for fertilizer application varies from $0.22 per acre for

retrofitting variable controls on anhydrous ammonia

applicators to more than $10 per acre for the largest

Soilteq truck-based applicator designed for on-the-go

mixing and variable rate application.

Despite the unsettled economic questions, some farmers have assessed their own values of precision agriculture. A survey of farmers about precision agriculture's prospects found that 75 percent of respondents

would pay $5 per acre for the benefits of precision

agriculture, while 50 percent would pay $10 per acre.

However, no respondents valued precision agriculture

at $20 per acre (Giacchetti, 1996). A survey of 200

corn growers by Mike Buckley and Associates found

that 46 percent thought precision agriculture would

reduce inputs and 42 percent thought it would

improve profits (Whipker and Akridge, 1996).

However, 48 percent expressed concern about the cost

of new equipment and 38 percent expressed uncertainty about the drawbacks associated with precision agriculture. A survey of 44 farm managers in Indiana

found, on average, that respondents valued information from yield monitors at $3.06 per acre

(Lowenberg-DeBoer, 1996). The 11 respondents that

managed farms with yield monitors in 1995 valued

the information less highly ($2.31 per acre) than the

33 respondents that did not manage farms with yield

monitors ($3.44 per acre). While these surveys are

certainly not definitive, they indicate the interest and

enthusiasm with which farmers consider precision

agriculture. 

Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 25

Table 10Summary of precision agriculture costs

Item Cost range (per acre) Sources1

Farmer cost:2

Grid soil sampling (plow depth, 3-acre grid) $3-$7 1,2

Grid soil sampling (4-foot depth, 3-acre grid) $16-$22 3

Yield monitor $1.45-$1.66 1

GPS receiver $0.75-$1.45 1

Scouting package, weekly $4 2

VRT controllers, various applicators $1-$5 1

Variable rate fertilizer application (difference) $3-$7 1,2

Dealer cost:3

DGPS receiver $0.23-$0.79 4

Grid soil sampling unit $0.62-$1.60 4

Yield mapping computer and software $0.33-$1.16 4

Liming application unit $1.09 4

VRT fertilizer unit $0.22-$10 4

1Source: 1 = Lowenborg-DeBoer and Swinton, 1995; 2 = Giacchetti, 1996; 3 = Berglund and Freeburg, 1995; 4 = Kohls.

2Assumes 3-year useful life for equipment, 6% interest rate, 3% repair cost, and 1,000 acres.

3Assumes 3-year useful life for equipment (except 5 and 10 years for liming, soil sampling, and VRT equipment), 6% interest rate, 3%

repair cost, and 5,000 acres. 

16Remote sensing technology for precision agriculture has

entirely different costs than GPS/GIS/VRT technologies

(Corbley, 1996; DeQuattro, 1996). Imagery from airborne

sensors, such as those used in the prototype system developed

by NASA and now managed by a consortia called Resource

21, and from satellites such as the LANDSAT Thematic

Mapper or SPOT. However, no individual farmer would find

it economical to purchase raw data. Data providers acquire

imagery in near real-time over the season, process it, and print

images for a farmers fields (Lamb, 1996).
26 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

V. Conclusions

For an economy to move along a more sustainable

path of economic development, the economic needs of

a growing population must be satisfied. A more sustainable path of economic development for agriculture

is one that meets the growing demands for food at

reasonable costs to consumers. These costs include

any environmental damages to current and future gen -

erations caused by agricultural production. An important lesson learned in this report is that no institutional

mechanism exists to steer the agricultural sector along

a more sustainable path of economic development.

Historically, government programs have tried to correct such market failures by directly conserving natural resources. For example, programs such as the

Conservation Reserve Program, albeit imperfectly,

take the place of market prices and provide incentives

for resource conservation. Recently, investment in

green technologies has received a great deal of atten -

tion because of their potential to increase farm profits

and improve the environmental performance of agricultural production. However, simply making a technology available does not necessarily mean it will be

adopted. Until markets are developed for the environ -

mental attributes associated with green technologies,

farmers will under-use these technologies.

Several conclusions emerge from this report. First,

the environmental and natural resource effects of a

technology are location-specific. A given technology

may be profitable for one farm but not for others

within the same region. This limits the power of

inferences that can be drawn from individual case

studies such as those reviewed in Appendix 1. This is

equally true of the environmental benefits of a green

technology, which may also exhibit significant spatial

variation.

Second, even when a green technology is profitable,

there are many impediments to adoption and diffusion

such as structural barriers, risk, and heterogeneity of

the farm resource base. As a result, a number of policy instruments must be used to encourage adoption of

green technologies. Economic incentives alone may

not be enough, as policymakers may need to consider

risk management strategies, for example, to deal with

the risk associated with adoption of a green technolo -

gy. Historically, increased adoption has been

achieved through two approaches: regulations (e.g.,

pesticide registration) and incentives (e.g., cost sharing). Our findings indicate that these approaches can

be complemented with other approaches. 17

Third, the heterogeneity of the resource base implies

that technology transfer programs must be tailored to

regional conditions. This follows because the envi -

ronmental benefits-profitability nexus exhibits spatial

variation. A green technology may work in one

region but may be totally inappropriate for another

region. The empirical findings of this report caution

against adopting a "one size fits all" approach to

adoption of green technologies. 

Finally, there can be environmental trade-offs associated with the technologies examined (e.g., controlling

one type of problem might exacerbate another). For

example, it is possible that conservation tillage may

increase herbicide use while reducing soil erosion. It

is necessary to consider such tradeoffs between environmental problems while formulating policy

approaches.

The in-depth study of four green technologies has provided information on the potential tradeoffs between

environmental quality, natural resource conservation,

and the choice of technology. This information provides some background for developing policy impli -

cations to move agriculture in a more sustainable

direction.

17These findings were reinforced by participants at a workshop co-sponsored by ERS. Workshop participants suggested

a number of policies that could be adopted to steer agriculture

in a more sustainable direction (see Appendix 2 and Vasavada,

Hrubovcak, and Aldy, 1997).
Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 27

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34 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

Appendix 1— Farm Level Case Studies on

Profitability-Environment Tradeoffs 

There are many sustainable agriculture success stories. Typically, these stories detail how shifting from

a conventional to an alternative production system can

provide economic and environmental benefits.

Several institutions have developed research programs

in sustainable agriculture. In general, these institu -

tions have targeted research projects that would otherwise be ignored by traditional institutions of agricul -

tural research. We review some case study evidence

on economic and environmental trade-offs developed

by these institutions below.

National Research Council Interviews with

Sustainable Farm Operators

The National Research Council conducted interviews

with farm operators who adopted sustainable production practices. Anecdotal evidence obtained from

those interviewed was then collated and published

(National Research Council, 1989). We abstract some

examples of National Research Council interviews

below.

The Spray brothers' 720-acre Ohio farm includes 400

acres of cropland: 100 acres of corn, 88 acres of soybeans, 12 acres of adzuki beans, 100 acres of wheat

and oats, and 100 acres of red clover, some of which

receives premium prices as seed. The farm controls

weeds with rotations, frequent cultivation, and by

hand. Over half of the corn is fed to 32 dairy cows

and 40 to 50 head of beef cattle. The farm does not

participate in the feed grain program, but receives premium prices for oats, soybeans, and adzuki beans

from health food stores because of its organic certification. No lime, fertilizer, or pesticides have been

purchased since 1971.

The Kutztown farm in eastern Pennsylvania is 305

acres, with slopes reaching 25 percent. The farm finishes 250 to 290 beef cattle and 50 to 250 hogs, annually. Except for a small amount of starter fertilizer,

fertilizer needs are satisfied with the livestock

manure. The farm controls weeds with cultivation

and crop rotation, with occasional herbicide applications on about half of the acreage. Most of the fields

are contour-farmed in strips 100 to 200 feet wide.

Although erosion exceeds the level needed for soil

replacement, it is below the State average. 

The Rodale Institute

The Rodale Institute began one of the earliest longterm studies in 1981 for examining the process of

converting to low-input cropping systems (National

Research Council, 1991b). The Institute compared a

conventional rotation of corn and soybeans using typical levels of purchased inputs with two low-input systems. One of the alternative systems incorporated a

5-year rotation of corn, soybeans, small grains,

legume hay and corn silage combined with cattle, and

the other included a low-input cash grain system.

During the transition period of 1981-84, a change in

the equilibrium between plant growth and soil

microorganisms was manifested in lower corn yields

for both alternative systems. All systems have had

similar yields since that time.

The Institute also found a higher level of microbiolog -

ical activity and more microarthropods in the alternative systems, and attributed these to the variety of

crops in the rotation, rather than simply the absence of

pesticides (National Research Council, 1991b). A

comparison of 9 years of data revealed that the cash

grain rotation would have earned about 8 percent

more profits than the conventional system, in the

absence of government support payments. In addition, larger profits were subject to less annual 

variation. 

Northwest Area Foundation

The Northwest Area Foundation (1994) reported on a

6-year $4.5-million research project it funded to

investigate the economic, environmental, and social

impacts of sustainable agricultural systems in seven

States. The report characterizes sustainable farms as:

more diversified in crops and livestock than conven -

tional farms; maintaining soil productivity with soilbuilding crop rotations, nutrient cycling, and tillage

practices; and using a greater amount of labor, but in

ways that spread it out over the year. Sustainable

farms had fewer assets, although they tended to own

more of their land. As a group, they tended to be less

competitive than conventional farms, but the upper

one-third performed competitively with conventional

farms. Management appears to be the key to being

competitive. Sustainable farmers were also younger

than their conventional counterparts and adopted sustainable practices early in their careers, suggesting

that education may encourage sustainable farming.
The Leopold Center

The Leopold Center funds studies on the feasibility

and effectiveness of new resource management tech -

niques for cattle and crops. Most of the studies are

focused on specific aspects of the farm, rather than

the total farm. The Center has funded research on the

scale of swine operations in a loose housing arrange -

ment, rotational grazing on highly erodible land, a

simulation model of farm decisionmaking, manure

management, reaction of a desired predator to a natural fertilizer, and educational videos about managed

grazing. Some of the findings of these studies are: 

1) small swine farmers can be more competitive with

larger producers by using a computerized feeding,

loose housing operation; 2) paddocks for cattle and

interseeding grassy pastures are feasible alternatives

to row cropping on land after removal from the

Conservation Reserve Program (CRP); 3) late spring

testing of soil, corn stalks, and manure provides more

accurate information on the needs of crops at crucial

times; 4) manure management reduces fertilizer costs;

and 5) urea and fresh manure inhibit the effectiveness

of biological control agents on black cutworms

(Leopold Center for Sustainable Agriculture, 1996).

Long-Term Trials

Long-term crop trials attempt to measure the effect of

selected treatments on a small number of variables

such as crop yield or profitability. Chase and Duffy

(1991) reported on a 12-year comparison of crop rotations carried out at the Northeast Research Center of

Iowa State University. The three rotations were continuous corn (C-C), corn-soybeans (C-Sb), and cornoats-meadow (C-O-M). Chase and Duffy noted that

monoculture and limited rotations are viewed as

increasing soil erosion and reducing soil productivity

that must be made up by increases in fertilization.

Conventional pesticide and fertilizer applications were

made on the C-C and C-Sb rotations. For the C-O-M

system, manure was used as the nutrient source and

pesticides were applied only as pests exceeded thresh -

old levels, as determined by the farm manager. The

meadow was an alfalfa hay with oats as a companion

crop. The alfalfa was harvested in the year after the

oats and was plowed under after the last cutting in

preparation for the following year's corn crop. Labor

costs were the highest for the C-O-M rotation because

labor was used as a substitute for machinery, chemicals, and other nonfarm inputs. Excluding labor, the

C-O-M rotation had average production costs of $96

per acre, compared with $159 per acre for C-Sb and

$207 per acre for C-C. Returns to land, labor, and

management were similar for the C-C rotation and the

C-O-M rotation, but nearly 60 percent higher for the

C-Sb rotation. No assessment of the effects on environmental quality was made, but appropriate pricing

of reduced chemical residues would raise the relative

return to C-O-M.

Luna and others (1994) reported on a systems-wide

trial begun in 1987 by a team of seven researchers

representing six departments at Virginia Polytechnic

Institute and State University, intended to last 10

years. The object was to compare a crop-livestock

system using integrated pest management (IPM) with

an alternative system intended to maintain or improve

profitability and soil productivity while reducing soil

erosion and chemical use. Preliminary conclusions

suggest that similar levels of productivity can be

achieved on both systems, and the need for nitrogen

fertilizer and pesticides can be decreased by using

managed grazing and an alfalfa rotation. Manure

from feeding of corn silage provides most of the nutrients for the following year's corn crop. Luna and others noted it is difficult to draw inferences that can be

extended much beyond the specific systems com -

pared, and even those inferences are location specific

as well. Furthermore, it is difficult to assign cause

and effect in such trials because many factors are

operating simultaneously and over time.

In the livestock sector, operators have also employed

more environmentally benign practices. Rotational

grazing, for example, involves managing livestock on

a series of pastures. Farmers effectively rotate herds

across this series of pastures through the year to maximize profits. A key component to the success of rotational grazing is the planting of forage crops that

mature at different times through the year. This

allows for farmers to rotate their herds to pastures

with sufficient forage throughout the year. Both dairy

and beef cattle farmers have used rotational grazing.

Through rotational grazing, some farmers have gained

significant cost savings by reducing the amount of

supplemental feed necessary for their herds. By moving herds to fields with forage at its optimal growth

stage, farmers can ensure their herds consume both

high-quality and high-quantity forage. In some cases,

dairy cattle have been found to graze 50 percent more

forage on productive fields than expected. In addition, rotational grazing can decrease labor requireEconomic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 35
ments for herd management. These economic bene -

fits have yielded substantial profit increases for dairy

farmers in Vermont and South Carolina and beef

farmers in Iowa. 

A well-managed rotational pasture system allows a

farmer to substitute natural resource inputs (forage)

for capital inputs (feed). Given that the farmer moves

the herd from field to field, this substitution is sustain -

able because grazing does not exceed a field's rate of

regrowth. Several researchers have experimented

with rotational grazing as an alternative to row crop

agriculture on environmentally sensitive lands cov -

ered by soon-to-expire Conservation Reserve Program

(CRP) contracts. They have found that rotational

grazing ensures soil cover and yields, and in some

locations, greater profits than row crops. In these

cases, CRP land can return to active agricultural productivity without losing the environmental benefits

associated with the program (USDA, Sustainable

Agriculture Research and Education Program, 1995).

Similar economic considerations apply for explaining

the barriers to the adoption and availability of more

environmentally benign production practices in the

livestock sector.

The literature reviewed above indicates there may be

some potential for achieving sustainability goals by

increasing the availability of green technologies.

This, however, may be easier said than done because

the success of these technologies on a particular farm

may not be easily replicated to all farm resource situations. Significant impediments may exist in replicat -

ing the success of a particular technology on a large

scale.

36 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA
Economic Research Service/USDA Green Technologies for a More Sustainable Agriculture / AIB-752 37

Appendix 2Workshop on the Economics

of Sustainable Agriculture

The workshop "Economics of Sustainable

Agriculture" was held in Washington, DC, on October

21-22, 1996. USDA's Economic Research

Service/Resource Economics Division (ERS/RED)

and the Farm Foundation co-sponsored this workshop.

Workshop Goals

The goals of this workshop were:

 to solicit input on the complex issue of sustainable agriculture from a diverse group of

individuals including farmers, public interest groups, academic and government economists, and former and current policymakers within the government.

 to present a preliminary draft of the

Resource Economics Division's sustainability research report and to invite critical

feedback on improving this report. 

A broad cross section of stakeholders was invited to

this workshop, including farmers (both conventional

and sustainable), public interest groups, academic and

government economists, and policymakers in government. A list of participants attending this workshop is

provided below.

Policy Recommendations

Are existing policy instruments adequate to steer agriculture along a more sustainable path of economic

development? The workshop considered this question

and sought to identify policies that could effectively

steer agriculture in a more sustainable direction. 

Some of these ideas are extensions of ideas reflected

in the 1996 Farm Bill. For example, the idea of program flexibility was determined to be critical in program implementation. The idea of flexibility is clearly evident in the Environmental Quality Incentives

Program (EQIP) and Wildlife Habitat Incentives

Program (WHIP). Under EQIP and WHIP, USDA's

Natural Resources Conservation Service (NRCS) has

leadership for the program. To advise NRCS, local

conservation districts will convene local work groups,

comprised of the districts, NRCS, USDA's Farm

Service Agency (FSA), FSA county committees,

USDA's Cooperative State, Research, Education, and

Extension Service, tribes, and others interested in natural resource conservation.

Other ideas presented at the workshop include the 

following:

Policy goals for a more sustainable agriculture must

be well articulated. The sustainable agriculture community, and others involved in policy design, must

provide well-defined goals to be achieved to move

along a more sustainable path of economic development. Achievement of goals should be defined in

terms of outputs and not inputs. For example,

achievements should be measured in terms of soil erosion reduced or improvements in surface- and groundwater quality, and not be the number of farmers that

adopt conservation tillage or IPM.

Flexibility in implementing Federal programs is

essential because of the diversity of our natural

resource base and the need to target specific issues

related to sustainability. For example, for farmers

with shallow soils, wind erosion may be a significant

obstacle to sustainability in the Northern Plains while

sheet and rill erosion pose a more serious threat to

sustainability in the Corn Belt. A "one size fits all"

approach to sustainability will not work because there

is a need to customize programs to match local needs.

The 1996 Farm Bill approach, which allowed greater

planting flexibility to farmers, is an appropriate model

to tailor future sustainability programs. The

Swampbuster provisions of the 1996 Farm Bill also

made it easier for landowners to mitigate wetland conversions by restoring other wetlands.

In addition to allowing local flexibility in targeting

issues related to sustainability, policies must also

allow for flexibility in solving problems. There is a

role for the government to make more sustainable

technologies available, but the government should not

prescribe specific technologies to achieve sustainability. Prescribing specific technologies does not provide

adequate incentives to develop or adopt less costly

alternatives. 

Identifying the limits to adoption and implementation

of alternative technologies is also critical in implementing policy. It is important to determine if the

adoption and implementation of a practice is limited

by farm size, labor availability, access to credit,

access to information (structure); geography (resource
heterogeneity); economic efficiency (profits, risk); or

if the private benefits from implementation are significantly different from the social benefits from implementation (lack of markets). 

Market development for more environmentally friendly crops is also a key to moving toward a more sustainable agriculture. The creation of organic standards

is an example of market development. By developing

markets, especially for high-value products, producers

who use sustainable production practices can obtain a

premium for choosing to exercise environmental

stewardship. 

The government should provide insurance as a way to

encourage the adoption of sustainable practices.

Impeding adoption of more sustainable practices is the

risk associated with switching from the time-tested

conventional mode of production. Further analysis of

the feasibility of providing insurance against such

risks is needed. 

Access to credit can also impede adoption of sustainable production practices. To encourage adoption,

policy can be restructured so that farmers who wish to

adopt can finance the costs of switching to a new

technology regime.

Rural development policies should focus on mitigating the shock of changing economic and social realities. Rather than attempting to isolate rural communities from change, such policies should ease the pain of

rural adjustment due to changing economic and social

realities. 

Research and development should focus on the problems faced by producers who adopt sustainable technologies. Greater emphasis should be placed on interdisciplinary research and on evaluating the tradeoffs

between environmental quality and profitability for

both conventional and sustainable technologies. It is

also imperative that researchers focus on tightening

the definition of "sustainable" technologies. 

38 Green Technologies for a More Sustainable Agriculture / AIB-752 Economic Research Service/USDA

List of Workshop Participants

Academic Economists: Farmers:

Darrell Bosch, Virginia Polytechnic Institute Varel Bailey, Bailey Farms, Inc.

and State University Fred Kirschenman, Kirschenman Farms, Inc.

George Frisvold, University of Arizona William Richards, Richards Farms, Inc.

Randall Kramer, Duke University Thomas Trantham, Trantham Farms, Inc.

Timothy Phipps, West Virginia University

John Reilly, Massachusetts Institute of Technology Government:

Vernon Ruttan, University of Minnesota Mary Ahearn, USDA/ERS

Kathleen Segerson, University of Connecticut William Anderson, USDA/ERS

James Shortle, The Pennsylvania State University Joe Aldy, Council of Economic Advisors

David Sunding, University of California Margot Anderson, USDA/Office of Chief Economist

David Zilberman, University of California-Berkeley Linda Calvin,USDA/ERS

Jorge Fernandez-Cornejo, USDA/ERS

Ralph Heimlich, USDA/ERS

Environmental and Non-Profit Organizations: Robert House, USDA/ERS

Norman Berg, Soil and Water Conservation Society James Hrubovcak, USDA/ERS

Pierre Crosson, Resources for the Future Wen Huang, USDA/ERS

David Ervin, Henry Wallace Institute of Alternative Bengt Hyberg, USDA/Natural Resources 

Agriculture Conservation Service

Ferd Hoefner, Sustainable Agriculture Coalition Carol Kramer-LeBlanc, USDA/Center for Nutrition 

Robbin Marks, Natural Resources Defense Council Policy and Promotion

Megan Moynihan, W.K. Kellogg Foundation Barbara Meister, USDA/Research, Education, and 

Economics

Industry: Parveen Setia, USDA/Office of Civil Rights

Thomas Gilding, American Crop Protection Association Robbin Shoemaker, USDA/ERS

Janis McFarland, Ciba-Geigy, Inc. Utpal Vasavada, USDA/ERS