Research Accomplishment Reports 2007

Benefits and Cost of Natural Resources Policies Affecting Public and Private Lands

R.A. Fleming
Department of Agricultural Economics

 

Project Description

Evaluation of the Environmental Quality Incentives Program (EQIP) in Kentucky is intended to add information that could assist the Natural Resources Conservation Service (NRCS) allocate funding for effectively (i.e., become more efficient). If EQIP funding goes where county leaders think there is a problem, but the problem does not, in fact, exist, then the program is inefficient. Results indicate that Kentucky's EQIP program is inefficient. Better program coordination, such that funding arrives in areas of need, will generate both program and environmental benefits. However, these benefits were not measured.

This Project determined whether expenditures on Kentucky superfund projects generated public benefits in terms of higher property values, a more diverse community, and higher incomes. We assessed whether remediation costs are offset by benefits associated with increases in income and the housing values at former superfund sites. Secondly we attempted to quantify potential community benefit. Benefits associated with leasing private land for consumptive and non-consumptive uses by the public, makes the case for eco-entrepreneurship. We also assessed gains to communities in rural Appalachia as a result of an increase in the number of eco-related businesses.

Impact

Setback distances are a common zoning device used to minimize the offsite impacts of a livestock operation and conflicts between farms and non-farm neighbors. Using a model of the benefits of livestock odor reduction and livestock odor abatement cost reported in Bazen and Fleming (2004), it can be shown that Kentucky's legally defined odor setback lengths from swine production facilities are too short for the conditions modeled. Livestock production firms pay more with longer setback lengths, but the losses to surrounding home owners far exceed firm gains at the mandated setback lengths. Worse yet, because they are complying with state law, swine producers are given a false sense of security. Because surrounding residential properties are being damaged, swine producers can be sued at great cost to themselves. For example, rural residences worth $60,000 on average 2,000 feet from swine production facilities are being damaged as much as $4.4 million per farm although damages are assumed to be 0 at 1,500 feet (the state mandated setback length). In 2002 there were 81 Kentucky farms with 1,000 or more pigs that were potentially required to comply with the 1,500 feet setback lengths. Buying all land within 2,000 feet of any residence (an expensive abatement option) would cost the farm $433,000 at $1,500 per acre.

Publications

Pagoulatos, A. and Fleming, R. A. The Environmental Quality Incentives Program In Kentucky: Does It Address Environmental Quality Problems? Journal of Applied Economics and Policy. 24(2005): 33-61

Bazen, E.F. and Fleming, R.A., "An Economic Evaluation of Livestock Odor Regulation Distances," Journal of Environmental Quality. 33(November-December, 2004):1997-2001

Fleming, R.A., "An econometric analysis of the environmental benefits provided by the conservation reserve program." Journal of Agriculture & Applied Economics. 36(August, 2004):399-413

Fleming, R.A., and Thomas, M., "Analyzing opportunities presented by the revised federal provisions governing concentrated animal feeding operations." Journal of Agriculture & Applied Economics" 36 (August, 2004):313-316.