Estimating Soil Erosion and Fuel Use Changes and Their Monetary Values with AGSIM: A Case Study for Triazine Herbicides

Paul D. Mitchell []
Staff Paper Series No. 563, November 2011, 97p.
This technical report describes a method to use the AGSIM policy model to estimate changes in soil erosion and diesel fuel consumption for tillage that result from agricultural policy changes. This report uses triazine herbicides as a case study to explain the development of the method and illustrate its use. The method assumes farmers shift their adoption of different tillage systems as a result of the agricultural policy being examined. Based on these shifts in tillage adoption rates, changes in farmer costs, erosion rates, and consumption of diesel fuel for tillage occur. The changes in farm costs are used as input by AGSIM, along with other changes in costs and/or yields due to the agricultural policy being examined. Based on these inputs, AGSIM then projects crop acreage and prices, as well as changes in consumer surplus, that would occur as a result of the policy. Based on projected crop acreage changes, the method estimates changes in soil erosion and consumption of diesel fuel for tillage, as well as the monetary value of soil erosion changes and the carbon dioxide emission changes resulting from the fuel use changes. As an illustration of the method, this report presents an updated assessment of the benefits of triazine herbicides to the U.S. economy. For the base year of 2009, this assessment finds that triazine herbicides provide total benefits to the U.S. economy of $3.8 to $4.8 billion per year. Because the triazine herbicides increase the total supply of corn and sorghum, which decreases grain prices, most of these benefits accrue to consumers, especially the livestock and ethanol industries that are major users of corn. These consumer benefits are the sum of the benefits flowing to everyone along the supply chain – livestock farmers, processors and handlers, distributors, retailers, and final consumers. Triazine herbicides also reduce the use of tillage for crop production and the conversion of land to crop production, which reduces soil erosion from U.S. cropland by 56 to 85 million tons per year. Based on these reductions, triazine herbicides provide $210 to $350 million per year in benefits from reduced soil erosion as part of this total benefit to the U.S. economy. In addition, triazine herbicides reduce consumption of diesel fuel for tillage by 18 to 28 million gallons per year, implying a decrease in carbon dioxide emissions of 180,000 to 280,000 metric tons per year. This total benefit of $3.8 to $4.8 billion is a lower bound on the full value of triazine herbicides to the U.S. economy, because several benefits are not accounted for in this assessment. Among the most substantial benefits missing from this assessment are estimates of the resistance management benefits of triazine herbicides for other herbicides and crops, environmental benefits other than reduced soil erosion, and the benefits to crops not modeled by AGSIM (e.g., sweet corn, sugarcane, citrus, grapes, and other fruits and nuts).