An after tax economic analysis of home equity conversion for the elderly

The FHA program to insure reverse mortgages has brought additional attention to the use of home equity conversion to increase income to the elderly. Using simulation, this study compares the economic consequences of the FHA reverse mortgage with two alternative conversion vehicles: sale of a remainder interest and sale-leaseback. An FHA insured plan is devised for each vehicle, structured to represent fair substitutes for the FHA mortgage. In addition, the FHA mortgage is adjusted to allow for a 4 percent annual increase in distributions to the homeowner. The viability of each plan for the homeowner, the financial institution and the FHA is investigated using different assumptions for house appreciation, tax rates, and homeowners' initial ages. For the homeowner, the return of each vehicle is compared with the choice of not employing home equity conversion. The study examines the impact of tax and accounting rules on the selection of alternatives. The study investigates the sensitivity of the FHA model to some of its assumptions.^ Although none of the vehicles is Pareato optimal, the study shows that neither the sale of a remainder interest nor the sale-leaseback is a viable alternative vehicle to the homeowner. While each of these vehicles is profitable to the financial institution, the profits are not high enough to transfer benefits to the homeowner and still be workable. The effects of tax rate, house appreciation rate, and homeowner's initial age are surprisingly small. As a general rule, none of these factors materially impact the decision of either the homeowner or the financial institution. Tax and accounting rules were found to have minimal impact on the selection of vehicles. The sensitivity analysis indicates that none of the variables studied alone is likely to materially affect the FHA's profitability. ^

Left behind: A farmer's fate in the age of sustainable development

Globalization is eroding the livelihoods of small farmers, a significant and vulnerable class, particularly in the developing world. The cost-price squeeze stemming from trade liberalization places farmers in a race to the bottom that leads to displacement, poverty, and environmental degradation. Scholars and activists have proposed that alternative trade initiatives offer a unique opportunity to reverse this trend by harnessing the power of the markets to reward producers of goods with embedded superior cultural, environmental, and social values. Alternative trade via certification schemes have become a de facto prescription for any location where there is a need to conciliate economic interest with conservation imperatives. Partnerships among commodity production farmers, elite manufacturers and wealthy northern consumers/activists do not necessarily have win-win outcomes. Paradoxically, the partnerships of farmers with external agencies have unexpected results. These partnerships develop into dependent relationships that become unsustainable in the absence of further transfers of capital. The institutions born of these partnerships are fragile. When these fledging institutions fail, farmers are left in the same situation that they were before the partnership, with only minor improvements to show after spending considerable amounts of social and financial capital. I hypothesize that these failures are born out of a belief in a universal understanding of sustainability. A discursive emphasis on consensus, equity and mutual benefit hides the fact that what for consumers it is a matter of choice, for producers is a matter of survival. The growth in consumers’ demand for certified products creates a race for farmers to meet these standards. My findings suggest that this race generates economically perverse effects. First, producers enter into a certification treadmill. Second, the local need for economic sustainability is ignored. Third, commodity based alternative trade schemes increase the exposure of communities to global shocks. I conclude by calling for a careful reassessment of sustainable development projects that promote certification schemes. The designers and implementers of these programs must include farmers’ agenda in the planning of these programs.

Hydro-physical characterization of media used in agricultural systems to develop the best management practices for operation of an environmentally sustainable agricultural enterprise

Florida is the second leading horticulture state in the United States with a total annual industry sale of over $12 Billion. Due to its competitive nature, agricultural plant production represents an extremely intensive practice with large amounts of water and fertilizer usage. Agrochemical and water management are vital for efficient functioning of any agricultural enterprise, and the subsequent nutrient loading from such agricultural practices has been a concern for environmentalists. A thorough understanding of the agrochemical and the soil amendments used in these agricultural systems is of special interest as contamination of soils can cause surface and groundwater pollution leading to ecosystem toxicity. The presence of fragile ecosystems such as the Everglades, Biscayne Bay and Big Cypress near enterprises that use such agricultural systems makes the whole issue even more imminent. Although significant research has been conducted with soils and soil mix, there is no acceptable method for determining the hydraulic properties of mixtures that have been subjected to organic and inorganic soil amendments. Hydro-physical characterization of such mixtures can facilitate the understanding of water retention and permeation characteristics of the commonly used mix which can further allow modeling of soil water interactions. The objective of this study was to characterize some of the locally and commercially available plant growth mixtures for their hydro-physical properties and develop mathematical models to correlate these acquired basic properties to the hydraulic conductivity of the mixture. The objective was also to model the response patterns of soil amendments present in those mixtures to different water and fertilizer use scenarios using the characterized hydro-physical properties with the help of Everglades-Agro-Hydrology Model. The presence of organic amendments helps the mixtures retain more water while the inorganic amendments tend to adsorb more nutrients due to their high surface area. The results of these types of characterization can provide a scientific basis for understanding the non-point source water pollution from horticulture production systems and assist in the development of the best management practices for the operation of environmentally sustainable agricultural enterprise

Hydro-Physical Characterization of Media Used in Agricultural Systems to Develop the Best Management Practices for operation of an Environmentally Sustainable Agricultural Enterprise

Florida is the second leading horticulture state in the United States with a total annual industry sale of over $12 Billion. Due to its competitive nature, agricultural plant production represents an extremely intensive practice with large amounts of water and fertilizer usage. Agrochemical and water management are vital for efficient functioning of any agricultural enterprise, and the subsequent nutrient loading from such agricultural practices has been a concern for environmentalists. A thorough understanding of the agrochemical and the soil amendments used in these agricultural systems is of special interest as contamination of soils can cause surface and groundwater pollution leading to ecosystem toxicity. The presence of fragile ecosystems such as the Everglades, Biscayne Bay and Big Cypress near enterprises that use such agricultural systems makes the whole issue even more imminent. Although significant research has been conducted with soils and soil mix, there is no acceptable method for determining the hydraulic properties of mixtures that have been subjected to organic and inorganic soil amendments. Hydro-physical characterization of such mixtures can facilitate the understanding of water retention and permeation characteristics of the commonly used mix which can further allow modeling of soil water interactions. The objective of this study was to characterize some of the locally and commercially available plant growth mixtures for their hydro-physical properties and develop mathematical models to correlate these acquired basic properties to the hydraulic conductivity of the mixture. The objective was also to model the response patterns of soil amendments present in those mixtures to different water and fertilizer use scenarios using the characterized hydro-physical properties with the help of Everglades-Agro-Hydrology Model. The presence of organic amendments helps the mixtures retain more water while the inorganic amendments tend to adsorb more nutrients due to their high surface area. The results of these types of characterization can provide a scientific basis for understanding the non-point source water pollution from horticulture production systems and assist in the development of the best management practices for the operation of environmentally sustainable agricultural enterprise