Factors underlying the investment decision in energy-saving systems in Dutch horticulture

In the Netherlands the greenhouse sector is a major user of energy. It accounts for 7% of the total national energy use and for 79% of the total energy use in agriculture. In order to sustain this sector on the long term, it is important that its use of energy is lowered. One way of reducing energy use by horticultural producers is investing in energy-saving systems. The purpose of this paper is to provide a better understanding of the investment behavior of firm operators in the adoption of energy-saving systems. Research objectives of the paper are (1) to analyze factors underlying the decision to invest, (2) to explore factors underlying the optimal size of investments. Three investment theories were used to construct an empirical model of investment. Consequently, this model was estimated in a two-stage procedure to analyze the factors influencing the decision of farmers to invest and the level of investments. The paper ends with policy implications.     

Economic feasibility of recirculating aquaculture systems in pangasius farming

This study aims to analyze the economic feasibility of recirculating aquaculture systems (RAS) in pangasius farming in Vietnam. The study uses a capital budgeting approach and accounts for uncertainty in key parameters. Stochastic simulation is used to simulate the economic performance of medium and large farms operating with a traditional system or RAS. Data are obtained through structured surveys and a workshop in the Mekong River Delta. Results show that for large farms, net present value increases from an average of 589,000 USD/ha to 916,000 USD/ha after implementing RAS. Overall, the probability that RAS is a profitable investment is found to be 99% for both farm sizes. With RAS, the crucial parameters determining profitability are price, yield, costs of fingerling, feed, and initial investment. Findings on the robustness of the economic performance of RAS are useful to support public and private decision making towards increasing the sustainability of pangasius production.     

Modeling the rejection probability in plant imports

Phytosanitary inspection of imported plants and flowers is a major means for preventing pest invasions through international trade, but in a majority of countries availability of resources prevents inspection of all imports. Prediction of the likelihood of pest infestation in imported shipments could help maximize the efficiency of inspection by targeting inspection on shipments with the highest likelihood of infestation. This paper applies a multinomial logistic (MNL) regression model to data on import inspections of ornamental plant commodities in the Netherlands from 1998 to 2001 to investigate whether it is possible to predict the probability that a shipment will be (i) accepted for import, (ii) rejected for import because of detected pests, or (iii) rejected due to other reasons. Four models were estimated: (i) an all-species model, including all plant imports (136,251 shipments) in the data set, (ii) a four-species model, including records on the four ornamental commodities that accounted for 28.9% of inspected and 49.5% of rejected shipments, and two models for single commodities with large import volumes and percentages of rejections, (iii) Dianthus (16.9% of inspected and 46.3% of rejected shipments), and (iv) Chrysanthemum (6.9 and 8.6%, respectively). All models were highly significant (P < 0.001). The models for Dianthus and Chrysanthemum and for the set of four ornamental commodities showed a better fit to data than the model for all ornamental commodities. Variables that characterized the imported shipment's region of origin, the shipment's size, the company that imported the shipment, and season and year of import, were significant in most of the estimated models. The combined results of this study suggest that the MNL model can be a useful tool for modeling the probability of rejecting imported commodities even with a small set of explanatory variables. The MNL model can be helpful in better targeting of resources for import inspection. The inspecting agencies could enable development of these models by appropriately recording inspection results.     

Effects of incorporating environmental cost and risk aversion on economic values of pig breeding goal traits

Economic values (EVs) of traits, accounting for environmental impacts and risk preferences of farmers, are required to design breeding goals that contribute to both economic and environmental sustainability. The objective of this study was to assess the effects of incorporating environmental costs and the risk preferences of farmers on the EVs of pig breeding goal traits. A breeding goal consisting of both sow efficiency and production traits was defined for a typical Brazilian farrow‐to‐finish pig farm with 1,500 productive sows. A mean‐variance utility function was employed for deriving the EVs at finishing pig level assuming fixed slaughter weight. The inclusion of risk and risk aversion reduces the economic weights of sow efficiency traits (17%) while increasing the importance of production traits (7%). For a risk‐neutral producer, inclusion of environmental cost reduces the economic importance of sow efficiency traits (3%) while increasing the importance of production traits (1%). Genetic changes of breeding goal traits by their genetic standard deviations reduce emissions of greenhouse gases, and excretions of nitrogen and phosphorus per finished pig by up to 6% while increasing farm profit. The estimated EVs could be used to improve selection criteria and thereby contribute to the sustainability of pig production systems.     

Effects of Environmental Stress on Forest Crown Condition in Europe. Part IV: Statistical Analysis of Relationships

Site-specific estimates for various environmentalstress factors were related with measured crowncondition data at a systematic 16 ×: 16 km² gridover Europe, according to previously statedhypotheses, using a multiple regression approach,including interactions, and lagged effects of stressfactors. Methodological differences among countriesaccounted for >30% of the variation in defoliation.Nevertheless, crown condition was found to varynaturally with tree age, altitude, drought stress and,most likely, also pathogenic fungi and insects.Significant impacts of air pollution (specificallyozone but also NO_x, SO_x and acid deposition)were found at regional levels in parts of centralEurope, particularly for deciduous species. Impactsseemed less significant for conifers, especially forspruce, but this might be affected by confoundingeffects or strong correlations between (a harsh)climate and (low) atmospheric deposition in the areawhere spruce predominates. National studies indicatethat ozone and acid deposition can have a significanteffect on the defoliation of spruce as well. Weconclude that while forest condition varies naturally,continued emissions will contribute further to forestdecline in the long term.     

Cost-effective control of a quarantine disease: a quantitative exploration using "design of experiments" methodology and bio-economic modeling

ABSTRACT An integrated approach to control of quarantine diseases at the level of the plant production chain is complicated. The involved actors have different interests and the system is complex. Consequently, control policies may not be cost effective. By means of a bio-economic model for brown rot in the Dutch potato production chain, the efficacy of different control options was quantitatively analyzed. An impact analysis was performed using the methodology of "design of experiments" to quantify the effect of factors in interaction on incidence and costs of brown rot. Factors can be grouped as policy, sector, economic, and exogenous factors. Results show that brown rot incidence and economic consequences are determined predominantly by policy and sector factors and, to a lesser extent, by economic and exogenous factors. Scenario studies were performed to elucidate how the government and sector can optimize the cost-effectiveness of brown rot control. Optimal cost-effectiveness of control requires cooperation of the sector and government, in which case brown rot incidence can be reduced by 75% and the costs of control can be reduced by at least 2 million euros per year. This study demonstrates quantitatively the potential contribution of an integrated approach to cost-effective disease control at chain level.     

Economic impact assessment in pest risk analysis

According to international treaties, phytosanitary measures against introduction and spread of invasive plant pests must be justified by a science-based pest risk analysis (PRA). Part of the PRA consists of an assessment of potential economic consequences. This paper evaluates the main available techniques for quantitative economic impact assessment: partial budgeting, partial equilibrium analysis, input output analysis, and computable general equilibrium analysis. These techniques differ in width of scope with respect to market mechanisms (relationships between supply, demand, and prices), and linkages between agriculture and other sectors of the economy. As a consequence, techniques differ in their ability to assess direct and indirect (e.g. economy-wide) effects of pest introduction. We provide an overview of traits of the available methods to support the selection of the most appropriate technique for conducting a PRA. Techniques with a wider scope require more elaborate data, and greater effort to conduct the analysis. Uncertainties are compounded as methods with greater scope are used. We propose that partial budgeting should be conducted in any risk assessment, while more sophisticated techniques should be employed if the expected gains in insight outweigh the costs and compounded uncertainties.     

Bio‐economic modelling of potato brown rot in the Netherlands*

A research project is being undertaken to design a bio‐economic model of potato brown rot (Ralstonia solanacearum) in the Netherlands. The first part of the project consists of an analysis of the past and current brown rot policy for its effectiveness and costs. Then, a stochastic, bio‐economic model will be designed that shows the relationship between the costs of control measures and their effect on the probability of brown rot. This model will eventually be used to determine optimal control strategies and to make recommendations for improvement of the Dutch brown rot policy.     

Economic justification for quarantine status – the case study of ‘Candidatus Liberibacter solanacearum’ in the European Union

International agreements on plant health and trade require that regulating a pest should be justified by economic impact assessment. Economic impact assessments are usually qualitative, weakening the objective and transparency of the regulation decision. This study assessed the potential economic impacts of the invasion of the plant pathogenic bacterium ‘Candidatus Liberibacter solanacearum’ into the European Union in order to economically justify a decision on its quarantine status. Direct economic impacts resulting from yield loss in potato and tomato were computed using partial budgeting at a regional scale, while total economic impacts on the potato and tomato markets were computed using partial equilibrium modelling at the EU scale. Annual direct impacts at the most likely infestation level were estimated at €222 m for the whole EU. Uncertainty analysis showed a distribution of foreseeable annual impacts with a 5th percentile of €192 m, and a 95th percentile of €512 m. Increased market prices of potato and tomato resulting from reduced supply were found to increase profits for non‐infested producers and to compensate in part for the production losses of infested producers, with consumers paying for this mitigation of impacts on producers. The expected negative impact on societal welfare at the most likely infestation level is less than the estimated direct impacts, viz. €114 m/year. The potential economic impacts of ‘Ca. L. solanacearum’ in the European Union are demonstrably of major importance. Therefore, a decision to categorize this organism as a quarantine pest is supported.