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March-April 1997 CSAS Newsletter

                     March-April 1997 CSAS Newsletter

The Center for Sustainable Agricultural Systems (CSAS) in the 
Institute of Agriculture and Natural Resources (IANR) at the 
University of Nebraska-Lincoln (UNL) is an interdisciplinary
center formed in 1991 for the purpose of bringing together people
and resources to promote an agriculture that is efficient,
competitive, profitable, environmentally and socially sustainable
for the indefinite future. The electronic version of this
bimonthly newsletter is sent to SANET and PENPages
10-14 days before those on our mailing list receive their hard
copy. The newsletters are also available along with other
sustainable ag information on our World Wide Web page:

Note: The electronic version is not sent to individual e-mail
addresses. To be added to the "hard copy" newsletter mailing list
(not sent to overseas addresses), or for questions or comments,
contact the newsletter editor, Pam Murray, Coordinator, Center
for Sustainable Agricultural Systems, PO Box 830949, University
of Nebraska, Lincoln, NE 68583-0949, 402-472-2056, fax -4104,
e-mail: csas001@unlvm.unl.edu.

                              * * *
                              * * *


Second in a four-part series: Economics

[With primary funding from an Agriculture in Concert with the Environment
(ACE) grant, a team of UNL researchers conducted one of six regional studies
that will be aggregated to assess the national impact of moving toward a
more sustainable agriculture. The goal of the Nebraska project was to study
existing whole-farm system groups along a continuum from "conventional" to
"alternative" and compare the economic, environmental, and sociological
performance/characteristics of each group. Team members of the 1993-1996
study were Glenn Helmers, Kevin Bernhardt, John Allen, Alice Jones, and
William Powers. For more information, contact Pam Murray in the CSAS office.]

Whole Farm System Optimization

Diversified cropping using rotations involves several potential advantages
compared to monocultures. These include yield interactions, reduced
operating inputs, and reduced machinery ownership and labor costs. The
latter arises because diversified cropping can reduce "peak load" problems.
Unfortunately, crop budgets and crop programming studies are almost always
developed from a single-crop framework without allowing for joint-products.

A multiple integer linear programming (MILP) model was used to address these
whole-farm system issues. The model considers machinery selection, crop
rotations (combinations of corn, soybeans, oats, and alfalfa), labor, and
pest control alternatives, and can also include yield interactions. Its
major feature is the inclusion of timeliness windows for completing field
work. Using this model, the optimization process allows machinery to
substitute for labor, crop mix to conjunctively adjust, and
herbicide-tillage alternatives for each crop to be chosen simultaneously.

Considering only reduced machinery-labor and machine operating costs, the
largest benefits were found relative to monoculture corn, with reduced costs
ranging from $37 to $85 per acre across all farm sizes. It was found that
across a wide range of cropping systems, corn and soybeans both provide
diversification (reduced cost) advantages, with less advantages for oats.

Analysis using the detailed model showed that mixing of herbicide-tillage
systems is an alternative to mixing crop systems alone. However, the
greatest benefit arose when both aspects were allowed to mix, a phenomenon
often witnessed among the producers participating in the on-farm interviews.
This suggests that in many cases mixing crops may not achieve all cost
advantages that exist when herbicide-tillage systems can also be mixed.

Technical Efficiency

Technical efficiency is a necessary but not a sufficient condition for
economic efficiency, which, in turn, is a necessary but not a sufficient
condition for economic sustainability. Two questions are specifically
addressed: (1) Are alternative corn production systems equally technically
efficient? and (2) What are the potential reasons for technical efficiency
differences (other than type of production systems)?

Five conventional and alternative production systems were classified
analyzing 59 crop production characteristics. In addition to mail survey
data, on-farm interviews were conducted and field level production
practices, yields, and physical land characteristics were collected for the
years 1992-94. The data were analyzed to determine potential causes of
technical efficiency differences. Seventy-eight percent of the total
variability of corn production was explained by technical efficiency which
ranged from 52% to 96% and 76% to 95% at the field and farm levels,
respectively. While crop scouting, age, and the type of production system
used had some effect on technical efficiency, the vast majority of technical
efficiency differences was explained by the productivity of the soil  a
factor not always within the producers control, especially in the short run.
We found that profit maximizing behavior fairly closely paralleled overall
efficiency when environmental factors were included.

Government Program Effects

The third area of economic study was examination of government policies and
their effects on farming system choices. MILP models were used to assess
base-building incentives and the effect of target price changes. Studies
conducted under this project support the conclusion that a producer's level
of farm program involvement is not driven solely, or even in large part, by
program incentives. Rather, participation is a function of economic
incentives outside the farm program, which suggests that if programs were
eliminated, the type of production system employed would not substantially

Program payments are paid to a base and the permitted acreage of program
crops (and other crops) is relatively wide, particularly under flexing
rules. In an analysis conducted related to the positive and negative biases
of current programs toward sustainable agriculture, it was found that the
biases are only potential rather than real in Nebraska dryland agriculture.
Thus, nonprogram crop prices would need to be far higher than they currently
are to induce farmers to move away from that crop mix grown under programs.

Also, some have argued that program base adjustments are induced by program
provisions leading to economic incentives to have high program bases. Our
analysis does not agree. Rather, large opportunity costs arise from
potential base-building behavior. Thus, the analysis demonstrates that the
level of program base largely follows basic economic phenomena rather than
leading it.

Whole-Farm Profitability

The final area of economic study was an analysis of farm returns of
producers. One interesting result in the mail survey was that there were no
significant differences in net household income between the cluster groups
(see first article in series for cluster definitions). Analysis using tax
return data for 1992, 1993 and 1994 supports this finding. The data also
show that the alternative farm systems such as the integrated and near
organic groups have less variability than the integrated monocroppers and
young technocrats.

In summary, the evidence supports that movement from one type of production
system to another as defined by the cluster groups may not change
profitability, but may have an effect on variability.

Editor's Note: The first article in this series discussed how the
producers/production systems were classified into clusters; the next article
will address the environmental aspects of the study.


Farm size is not necessarily an indicator of sustainability in today's
agriculture. North Dakota organic farmer and livestock producer Fred
Kirschenmann explored the impacts of farm scale during a keynote speech at
the Nebraska Sustainable Agriculture Society's annual meeting in Columbus in
February. He then described ways we can learn to farm economically and still
follow an ecological standard.

Kirschenmann first presented four clues to the answers of size, efficiency,
and sustainability in farming:

1. Smaller is not necessarily better. New generation pesticides provide a
technology that uses drastically lower amounts of active ingredient, leaving
residues so minute that they are barely detectable; this does not mean they
are harmless. A certain level of scale is necessary to create biological
diversity in time (rotations) and space (multiple species in field).

2. Bigger is not always worse, but at some scale it can be. Livestock
concentration converts a valuable resource (manure) into a waste product
that causes an expensive disposal problem. Another example is the vast
acreage of monocropped wheat. An estimated 450 trillion global stalks of
wheat in 1994 suggest this crop is far from endangered, yet the opposite is
true when we consider the  genetic uniformity of the varieties used.

3. While economies of scale do play a role, bigness does not assure
efficiency or productivity. Green revolution technology gave higher yielding
varieties, but when health costs are factored in, many of the gains are
canceled out. Punjabi wheat production has helped to feed India, but it has
depleted the groundwater, replaced grain legume crops, and reduced
efficiency of use of scarce production inputs.

4. The issue is not bigness or smallness, but the appropriateness of
technology. To farm ecologically, we need to think like a biotic community.
What is used from nature must be returned to nature without harming living
organisms. Three principles apply: we must use current energy, all waste
must become food in the cycle, and diversity is essential for stability and
system integrity.

Kirschenmann, a nationally known sustainable agriculture advocate, then gave
some guidelines on how to farm economically by an ecological standard. He
cited the dependence of industrial agriculture on fossil energy, and a
narrow focus on 15 plant species to provide more than 90% of our crop-based
production; neither is sustainable. We need a conversion from old economies
of mass produced food at a cheap price, to niche products and flexible crops
with multiple uses. We must learn to adapt, unlike the Vikings who settled
Greenland about 900 years ago and then disappeared, unable to sustain a
transplanted system they were unwilling to change. The First Peoples
survived very well in that same place in the same conditions.

Kirschenmann concluded that organic agriculture must not fall into the trap
of pursuing success based on the industrial model, simply substituting
"natural" inputs for synthetic ones. If organic agriculture mirrors itself
after the industrial food system, rather than enhancing its differentiation
by developing diverse and ecologically designed systems and focusing on
developing local foodshed, it will lose its market advantage.
                                                 Submitted by Chuck Francis


The January/February 1997 Kerr Center Newsletter (see
http://kerrcenter.com/) announced that it was adding "rural development" to
its program. Suddenly, given the Fund for Rural America, everyone is
interested in developing us. Ironically, the lead article in the newsletter,
"Future of the Beef Industry," points us in a direction that can not
possibly lead to any real rural development. It suggests that most of the
problems the beef industry is facing could be solved through vertical
integration, much like the swine and poultry industries. Producers would be
paid a salary to raise calves to a specific weight and receive a bonus for
good performance. The article goes on to say that "raising cattle is a hobby
and not a business" when herds are only 100 cows or less (50% of the beef
cows in the U.S. are in herds of this size according to a 1995 USDA report). 

Well, I would have expected something like this in Beef or the Farm Journal.
I was really surprised to find it in a "sustainable agriculture" newsletter.
Apparently Will Lathrop, the author of the article and a "livestock
specialist," is not aware of several facts.

The economic viability and environmental benefits of herds of less than 100
cows that are fully integrated in crop/livestock systems have been well
established. Several North Dakota State University studies on integrated
crop livestock systems demonstrated that:
- When 60 beef cows were integrated into a cropping system so that the cows
could make use of corn stover and other crop residues, the return for labor
was $22 per hour. Feed costs were minimal since cows were making use of crop
waste, and it also reduced cropping costs since the cow manure was used to
supply nutrients for the cropping system. Any time farmers can turn waste
into income and make $22 an hour doing it, they are on the path to economic
- When 85 cows were added to a cropping system, the return to the cropping
system increased by $24,000 annually in conventional farming systems, and
$27,000 annually in conservation tillage systems.
- When crop residues were fed to cows, 71% of the nitrogen consumed by the
cows was returned to the field in the form of manure.

Crop/livestock integration, then, is one of the key ways to improve economic
and ecological sustainability  and herd size can be well under 100.
Furthermore, it is precisely such integrated crop/livestock systems that
enable producers to develop ecologically elegant systems  surely one of the
hallmarks of sustainability. 

Contrast this with the model Lathrop proposes: the broiler industry. An
October 26, 1992 issue of Time magazine pointed out that farmers who had
contracted with Tyson to produce chicken for them had become "serfs on their
own land." Since Tyson was the only market, farmers were in no position to
bargain or auction for better prices. They had not received an increase for
their labor in 11 years, despite the fact that their costs had increased by
50%. In the processing plants, workers received minimum wages in extremely
harsh working conditions that now make "fowl processing one of the nation's
most hazardous jobs." Furthermore, the manure overload from the massive
concentration of chickens is creating an intolerable waste disposal problem
that has numerous detrimental environmental impacts. Is this the
"sustainable" future that Lathrop sees for beef producers and the rural
communities in which beef is produced?

Ours is a 3100 acre grain and livestock farm with 114 beef brood cows. The
beef cattle are fully integrated into the cropping system. We feed our
cattle no cash grain, only forages and crop residues. We generate, on
average, $300,000 gross revenue annually, and haven't borrowed any operating
funds in 20 years. I assure you this is not a hobby farm. Over the past 10
years we have always received top dollar for our backgrounded calves  not
because we are part of a vertically integrated, industry-managed quality
control system, but because our calves are healthy, grass-fed, and ready to
perform well when they hit the feedlot.

Lathrop does suggest that producers need to cooperate. I agree. But they
need to cooperate with one another (not corporations), develop direct
markets where possible, and pool their capital to recapture part of the
market sector by building locally owned processing plants with products
produced to meet specific market niches that the IBP's of the world can not
compete with  like high quality grass- and forage-fed beef. That way the
wealth generated by beef enterprises will stay in local communities instead
of being drained off to distant investors. That is real rural development.
                                        Submitted by Fred Kirschenmann


The 1996 Farm Bill authorizes several cost-share programs to encourage tree
and shrub planting for conservation purposes. The highlights of key programs
are noted below. For more information, contact the NRCS State Office
(402-437-4112) or Nebraska Forest Service State Forester (402-472-5822).

Continuous Conservation Reserve Program (CRP):
The Continuous CRP has tremendous potential to increase tree and shrub
planting for conservation purposes in Nebraska. Special "environmental
priority" practices are offered to solve critical conservation problems. The
following is a summary of eligible CRP practices that include tree planting,
contract lengths, and incentive bonuses available for the Continuous CRP.

(For table below, numbers in brackets are CRP-1 length [years], and the % is
percent of incentive bonus for that practice.)

Practice	Title
CP5A	Field Windbreak Establishment [10-15], 20%
CP16A	Shelterbelt Establishment [10-15], 0%
CP17A	Living Snowfences [10], 0%
CP18C	Permanent Salt Tolerant Vegetation Estab. [10], 0%
CP22	Riparian Buffers [10-15], 20%
*CP3	Tree Planting [10], 10%
*CP3A	Hardwood Tree Planting [10-15], 10%
*CP4D	Permanent Wildlife Habitat [10], 10%

*Apply to "Wellhead Protection Areas" only.

The following provisions apply to all Continuous CRP practices:
- The program began September 4, 1996, and is currently in effect.
- Contract acres are eligible for either 10 or 10-15 year contracts.
- 50% cost-share is available for site preparation and planting.
- Water conservation mulch (plastic fabric) is eligible west of the 25 inch
rainfall line.
- Contract rental rates are based on the average soil rental rate of the
three dominant soils within the contract areas. A 10 or 20% incentive
"bonus" is added to the average soil rental rate for high priority practices.
- Each contract also receives a $5/acre/year maintenance fee.
- All Continuous CRP contracts must be on eligible cropland, generally
defined as land planted or considered planted to an agricultural commodity
during any 2 of the crop years 1992-1996.
- No bidding is required. Acreage will be automatically accepted if
eligibility requirements are met.
- The 25% county cropland enrollment limit does not apply.
- A Forest Stewardship Plan is not required.
- Practices must meet NRCS FOTG standards.
Environmental Quality Incentives Program (EQIP):
EQIP intends to distribute cost-share dollars based on environmental needs
of geographic priority areas as determined by local working groups. Tree
planting practices, such as windbreaks, riparian buffers and others may be
eligible depending upon the needs identified within the approved geographic
priority areas or identified as statewide natural resource concerns.

Stewardship Incentives Program (SIP):
Nebraska SIP provides cost-share to help landowners plant trees and improve
existing woodlands for conservation purposes. Six SIP practices are
available that address windbreak establishment, riparian improvement, soil
and water protection, wildlife habitat, forest improvement, and other
conservation needs. The Nebraska Forest Service administers SIP. An approved
Forest Stewardship Management Plan is required to qualify for SIP cost-share.

Wildlife Habitat Improvement Program (WHIP):
The WHIP allows opportunities for tree and shrub planting to enhance
wildlife benefits, but the extent is dependent upon the recommendations from
local working groups regarding wildlife needs in the local area.
Forestry Incentives Program (FIP):
FIP provides cost-share for tree planting and forest management practices
primarily for timber production. A minimum of 10 acres must be enrolled.
Producers interested in FIP should be referred to the Nebraska Forest
Service for technical assistance.


"Linking People, Purpose, and Place: An Ecosystem Approach to Agriculture"
is the theme for this year's North Central Sustainable Agriculture Training
Program workshops to be held: June 18-20 in Wooster, OH; July 9-11 in
Manhattan, KS; July 28-30 in Morris, MN. Contact Heidi Carter for details,
402-472-0917, csas007@unlvm.unl.edu.


Herbicide Resistant Crops: Agricultural, Economic, Environmental, Regulatory
and Technological Aspects. Provides overview of herbicides and herbicide
resistant crops, and discusses role of biotechnology in developing herbicide
resistance. Examines environmental concerns, regulations and risk assessment
of herbicide resistant crops. Range of contributors include representatives
of agrochemical companies, university agriculture departments and NGOs.
$89.95. CRC Press, Inc., Lewis Publishers, 2000 Corporate Blvd., NW, Boca
Raton, FL 33431, 1-800-272-7737, fax 1-800-374-3401.

The Guide to a Sustainable Future. $35. Disk containing comprehensive guide
for learning and taking action for a sustainable future. Included are four
sections outlining the transformation of design, energy systems,
agriculture, and materials flow necessary for a positive future: Ecological
Building and Design; Organic and Sustainable Agriculture; Wood Conservation
and Alternative Fibers; Renewable and Clean Energy. Each of the four
sections contains extensive background articles, news, and resource
listings. The Green Disk, POB 32224, Washington, DC 20007, 1-888-GRN-DISK,
greendisk@igc.org, http://www.igc.org/greendisk

Direct Marketing and Related Topics. Free. Citations from the AGRICOLA
database. Alternative Farming Systems Information Center, National
Agricultural Library, USDA, 10301 Baltimore Ave., Room 304, Beltsville, MD
20705-2351, 301-504-6559; e-mail afsic@nal.usda.gov.

Linking Science and Technology to Society's Environmental Goals. $69.95.
National Research Council. Evaluates how science and technology can help
advance environmental goals. Examines several broad environmental issues,
including risk assessment, environmental monitoring and chemical
contamination. Makes recommendations for improving monitoring of
environmental conditions and using technology to achieve environmental
objectives. National Academy Press, 2101 Constitution Avenue, NW, Lockbox
285, Washington, DC 20055, 1-800-624-6242, http://www.nap.edu

Synergy Magazine. $22.00/yr in Canada, or $32.00 for a Canadian corporate or
institutional subscription (in U.S. and other countries add $3.00 to cover
increased postal costs, or for convenience pay in U.S. funds). Quarterly
magazine carrying articles geared for  the Western Provinces and Northern
Plains States relating to organic agriculture, sustainable forestry
practices, alternative energy technology, policy analysis, profiles of
farmers and communities who are putting these alternative ideas to work, and
practical "how-to" stories about people and their innovations. Synergy
Magazine, Box 8803, Saskatoon, Sask. S7K 6S6, synergy@link.ca.

New SAN Web Site. Farmers and ranchers, researchers, agricultural
professionals, students and consumers can access the latest information on
sustainable agriculture at a new, user-friendly Web site maintained by the
Sustainable Agriculture Network. The site features on-line books and a
database of more than 1,000 research projects funded by the USDA's
Sustainable Agriculture Research and Education program, a searchable third
edition of the Sustainable Agriculture Directory of Expertise, and much more.


Contact CSAS office for more information.
May 18-21  Feeding People without Poisons  PAN International Meeting, La
Habana, Cuba
May 23-25  Feeding Our World and Having It, Too: How Can We Combine
Sustainable Farming and Forestry with Protecting Biodiversity? The Land
Institute's Prairie Festival, Salina, KS
May 25-28  8th Global Warming International Conference & Expo, New York, NY
June 3-5  Wind Erosion: An International Symposium/Workshop, Manhattan, KS
June 8-9  XVIII International Grassland Congress '97, Manitoba and
Saskatchewan, Canada
June 21-22  Pacific Northwest Bamboo Agro-forestry Workshop, Ft. Worden,
Port Townsend, WA
June 25-28  3rd International Interdisciplinary Conference on the
Environment, Boston, MA
June 13-26  Training Workshop on Sustainable Agroecosystems and
Environmental Issues, 
West Texas A&M University
July 23-26  Soil and Water Conservation Society Annual Conference (focusing
on ecosystem management within watersheds), Toronto, Ontario
July 30-31  Leopold Center for Sustainable Agriculture's 10th Anniversary
Ames, IA
Aug. 20-23  International Symposium on Sustainable Agricultural Technology,
Bejing, China
Nov. 2-6  3rd North American Workshop of Farming Systems Research &
Extension Association (Food & Natural Resource Systems:  Integrating
Diversity, Inquiry, & Action), Mt. Hood, OR

Of Note...
CSAS Director Charles Francis was presented with the 1997 Agricultural
Stewardship Award at the annual meeting of the Nebraska Sustainable
Agriculture Society, February 22.

Did You Know...
Only 20% of the world's major virgin forests remain, almost all of them in
the far north of Russia and Canada and in Brazil's Amazon region, the World
Resources Institute said on 3/4/97.

Did You Know...
The U.S. loses nearly 50 acres of prime farmland an hour to urban
development, according to the American Farmland Trust.

                     #          #          #
Pam Murray, Coordinator
Center for Grassland Studies and
Center for Sustainable Agricultural Systems
PO Box 830949
University of Nebraska
Lincoln, NE 68583-0949
phone: 402-472-9383
fax:   402-472-4104
e-mail: csas001@unlvm.unl.edu