Economic benefits and costs of Sustainable Land Management Technologies: An analysis of WOCAT's global data

Perceived profitability is a key factor in explaining farmers' decision to adopt or not adopt sustainable land management (SLM) technologies. Despite this importance, relatively little is known about the economics of SLM. This paper contributes to the literature by analysing data on costs and perceived cost/benefit ratios of SLM technologies. Data are taken from the World Overview of Conservation Approaches and Technologies technology database and cover 363 case studies conducted in a variety of countries between 1990 and 2012. Based on an in-depth descriptive analysis, we determine what costs accrue to local stakeholders and assess perceived short-term and long-term cost/benefit ratios. Our results show that a large majority of the technologies in our sample are perceived as being profitable: 73% were perceived to have a positive or at least neutral cost/benefit ratio in the short term, while 97% were perceived to have a positive or very positive cost/benefit ratio in the long term. An additional empirical analysis confirms that economic factors are key determinants of land users' decisions to adopt or not adopt SLM technologies. We conclude that a wide range of existing SLM practices generate considerable benefits not only for land users, but for other stakeholders as well. High initial investment costs associated with some practices may, however, constitute a barrier to their adoption; short-term support for land users can help to promote these practices where appropriate.

A case-control study to estimate the effects of acute clinical infection with the Schmallenberg virus on milk yield, fertility and veterinary costs in Swiss dairy herds.

Schmallenberg virus (SBV) was first detected in Switzerland in July 2012 and many Swiss dairy farmers reported acute clinical signs in dairy cattle during the spread of the virus until December 2012. The objectives of the present study were to investigate the effects of an acute infection with SBV on milk yield, fertility and veterinary costs in dairy farms with clinical signs of SBV infection (case farms), and to compare those farms to a matched control group of dairy farms in which cattle did not show clinical signs of SBV infection. Herd size was significantly (p<0.001) larger in case farms (33 cows, n=77) than in control farms (25 cows, n=84). Within case herds, 14.8% (median) of the cows showed acute clinical signs. Managers from case farms indicated to have observed a higher abortion rate during the year with SBV (6.5%) than in the previous year (3.7%). Analysis of fertility parameters based on veterinary bills and data from the breeding associations showed no significant differences between case and control farms. The general veterinary costs per cow from July to December 2012 were significantly higher (p=0.02) in case (CHF 19.80; EUR 16.50) than in control farms (CHF 15.90; EUR 13.25). No differences in milk yield were found between groups, but there was a significant decrease in milk production in case farms in the second half year in 2012 compared to the same period in 2011 (p<0.001) and 2013 (p=0.009). The average daily milk yield per cow (both groups together) was +0.73kg higher (p=0.03) in the second half year 2011 and +0.52kg (p=0.12) in the second half year 2013 compared to the same half year 2012. Fifty-seven percent of the cows with acute clinical signs (n=461) were treated by a veterinarian. The average calculated loss after SBV infection for a standardized farm was CHF 1606 (EUR 1338), which can be considered as low at the national level, but the losses were subject to great fluctuations between farms, so that individual farms could have very high losses (>CHF 10,000, EUR 8333).

Trade Costs, Quality, and The Skill Premium

We develop a monopolistic competition model with nonhomothetic factor input bundles where increasing quality requires increasing use of skilled workers. As a result more skill abundant countries export higher quality, higher priced goods. Using a multicountry dataset we test and confirm the findings in Schott (2004) of a positive effect of skill abundance on unit values identified with US data. We extend the core model with per unit trade costs leading to the Washington-apples effect that goods shipped over larger distance are of higher quality. The combination of high-quality goods being relatively skill intensive with the Washington-apples effect implies that countries at a larger distance from their trading partners display a higher skill premium. Simulating our model we find that a doubling of distance of a country relative to all its trading partners raises the skill premium in a country by about 2.3 percent.