Hostname: page-component-586b7cd67f-gb8f7 Total loading time: 0 Render date: 2024-11-22T19:43:26.152Z Has data issue: false hasContentIssue false
  • English
  • Français

Potential effects on rural economies of conversion to sustainable farming systems

Published online by Cambridge University Press:  30 October 2009

Thomas L. Dobbs  and
John D. Cole
Thomas L. Dobbs
Affiliation:
Professor Economics Department, South Dakota State University, Brookings, SD 57007-0895.
John D. Cole
Affiliation:
Former Research Assistant, Economics Department, South Dakota State University, Brookings, SD 57007-0895.
Get access

Abstract

Conversions from conventional to sustainable farming systems could affect local rural economies either positively or negatively, by several means: changes in income of agricultural households; backward linkages to input supply firms; forward linkages to transportation, processing, and marketing firms; and changes in consumer expenditures by agricultural and other households. We estimated these effects for five local rural economies in South Dakota, representing different agroclimatic and population settlement patterns. Whole-farm economic models of case study conventional and sustainable farms in each area were used to estimate differences in input purchase and marketing patterns. We found declines in on-farm personal income (returns to farm labor and management) in four of the five case comparisons under a conversion to sustainable farming systems if organic price premiums are ignored; we found increases in three of five cases if applicable organic premiums are included. In all five study areas, total off-farm personal income drops in the portions of local economies connected to farming through backward linkages. It also drops in four of the five study areas in the portions of local economies connected through forward linkages if organic premiums are ignored (all five if organic premiums are included). However, net forward linkage effects are usually much smaller than net backward linkage effects, and on-farm personal income effects are substantially greater than either backward or forward off-farm linkage effects in most cases. The total (on-and off-farm) personal income effect of converting to sustainable systems is positive in only one area without organic premiums, and in one additional area with premiums. The ratio of total to on-farm personal income effects within local economies, considering only first round effects on backward- and forward-linked firms, averages 1.2 without organic premiums, or 0.6 with them. Taking account of more complete multiplier effects, which also consider changes in consumer expenditures and changes in expenditures for supplies by backward- and forward-linked firms, the average is 1.8 without organic premiums, or 0.8 with them. With more time for changes in sustainable production techniques and in the structure of farms and the rural economy, the overall economic effects of conversions to sustainable farming are likely to be more positive than our estimates.

Keywords

sustainable agricultureorganic farmingrural economymultiplier effectsforward linkagesbackward linkagesnet farm income
Type
Articles
Information
American Journal of Alternative Agriculture , Volume 7 , Issue 1-2: Special Issue on Soil Quality , June 1992 , pp. 70 - 80
Copyright
Copyright © Cambridge University Press 1992

Access options

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

References

1.Becker, D.L., Dobbs, T.L., and Taylor, D.C.. 1990. Crop enterprise and principal rotation budgets for sustainable farms in South Dakota. Economics Research Report 90–2. Economics Dept, South Dakota State Univ., Brookings.Google Scholar
2.Cole, J.D., and Dobbs, T.L.. 1990. Crop enterprise and whole-farm budgets for “conventional” farming systems in five areas of South Dakota. Economics Research Report 90–3. Economics Dept., South Dakota State Univ., Brookings.Google Scholar
3.Darling, D.L. 1990. Estimating the role of production agriculture in a county's economy. Community Development Series. Cooperative Extension Service, Kansas State Univ., Manhattan.Google Scholar
4.Devino, G., Van Dyne, D., and Braschler, C.. 1987. Potential impacts of the Conservation Reserve Program on farm supply sales and grain merchandising in north Missouri. AER 1987–9. Agric. Economics Dept., Univ. of Missouri, Columbia.Google Scholar
5.Dobbs, T.L. 1979. Some business and public sector effects of irrigation development: A tentative analysis of the proposed Forest City Project in Potter County, South Dakota. Economics Dept., South Dakota State Univ., Brookings.Google Scholar
6.Dobbs, T.L., and Cole, J.D.. 1991. Rural economy implications of farms converting to sustainable agricultural practices: Some estimates for South Dakota. Economics Research Report 91–1. Economics Dept., South Dakota State Univ., Brookings.Google Scholar
7.Dobbs, T.L., Weiss, L.A., and Leddy, M.G.. 1987. Costs of production and net returns for alternative farming systems in northeastern South Dakota: 1986 and “normalized” situations. Economics Research Report 87–5. Economics DepL, South Dakota State Univ., Brookings.Google Scholar
8.Dobbs, T.L., Leddy, M.G., and Smolik, J.D.. 1988. Factors influencing the economic potential for alternative farming systems: Case analyses in South Dakota. Amer. J. Alternative Agric. 3(1):26–34.CrossRefGoogle Scholar
9.Dobbs, T.L., Becker, D.L., and Taylor, D.C.. 1991a. Sustainable agriculture policy analyses: South Dakota on-farm case studies. J. Farming Systems Research-Extension 2(2):109–24.Google Scholar
10.Dobbs, T.L., Smolik, J.D., and Mends, C.. 1991b. On-farm research comparing conventional and low input/sustainable agricultural systems in the Northern Great Plains. In Sustainable Agriculture Research and Education in the Field: A Proceedings. Board on Agriculture, National Research Council. National Academy Press, Washington, D.C. pp. 250–65.Google Scholar
11.Goreham, G.A., Leistritz, F.L., and Rathge, R.W.. 1986. Trade and marketing patterns of North Dakota farm and ranch operators. Agric. Economics Misc. Report 98. Agric. Economics Dept, North Dakota State Univ., Fargo.Google Scholar
12.Hassebrook, C. 1990. Developing a socially sustainable agriculture. Amer. J. Alternative Agric. 5(2):50, 96.CrossRefGoogle Scholar
13.Hustedde, R., Shaffer, R., and Pulver, G.. 1984. Community economic analysis: A how to manual. North Central Regional Center for Rural Development, Ames, Iowa.Google Scholar
14.Ikerd, J.E. 1990. An emerging view of the natural environment: Implications for rural communities. Rural Development News (North Central Regional Center for Rural Development) 14(6):11–12.Google Scholar
15.Leistritz, F.L., Ekstrom, B.L., and Vreugdenhil, H.G.. 1987. Selected characteristics of business operators in North Dakota agricultural trade centers. Agric. Economics Report 217. Agric. Economics Dept., North Dakota State Univ., Fargo.Google Scholar
16.Leistritz, F.L., Mortensen, T., Bastow-Shop, H., Braaten-Grabanski, J., Schuler, A., and Fedorenko, J.. 1989. Revitalizing the retail trade sector in rural communities: Experiences of 13 North Dakota towns. Agric. Economics Report 250. Agric. Economics Dept., North Dakota State Univ., Fargo.Google Scholar
17.Lockeretz, W. 1989. Comparative local economic benefits of conventional and alternative cropping systems. Amer. J. Alternative Agric. 4(2):75–83.CrossRefGoogle Scholar
18.Owens, W.W., and Vangsness, E.C.. 1973. Trade areas in North Dakota. Extension Bull. 20. Cooperative Extension Service, North Dakota State Univ., Fargo.Google Scholar
19.Taylor, D.C., Dobbs, T. L., Becker, D.L., and Smolik, J.D.. 1989. Crop and livestock enterprises, risk evaluation, and management strategies on South Dakota sustainable farms. Economics Research Report 89–5. Economics Dept., South Dakota State Univ., Brookings.Google Scholar
20.Taylor, D.C., Mends, C., and Dobbs, T.L.. 1990. Livestock budgets and whole-farm economic analysis: South Dakota sustainable agriculture case farms. Economics Research Report 90–7. Economics Dept., South Dakota State Univ., Brookings.Google Scholar
21.U.S. Dept. of Commerce. 1977. Industry-specific gross output multipliers for BEA economic areas. Bureau of Economic Analysis, Washington, D.C.Google Scholar
22.U.S. Dept of Commerce. 1989a. 1987 Census of Wholesale Trade, South Dakota. Bureau of the Census, Washington, D.C.Google Scholar
23.U.S. Dept of Commerce. 1989b. 1987 Census of Wholesale Trade, U.S. summary. Bureau of the Census, Washington, D.C.Google Scholar
24.U.S. Dept. of Commerce. 1989c. 1987 Census of Service Industries, South Dakota. Bureau of the Census, Washington, D.C.Google Scholar
25.U.S. Dept. of Commerce. 1989d. 1987 Census of Service Industries, U.S. Summary. Bureau of the Census, Washington, D.C.Google Scholar