Author: Jagjit Singh Brar

Publisher:

Published: 1972

Total Pages: 236

ISBN-13:

Open field burning is the lowest-cost method of harvest residue disposal used extensively by grass seed producers in the Willamette Valley of Oregon. The beneficial effects of open field burning include effective disease control and increased seed yields. However, smoke produced by open burning in the late summer pollutes valley air, reduces visibility, and possibly poses traffic and health hazards. The growing concern among Oregon citizenry coupled with increased national interest in environmental quality has led Oregon authorities to legislate controls on open field burning. However, such controls by changing resource allocation in Oregon's seed industry would impose costs upon society. The major objective of this study was to estimate costs of three alternative field burning control policies in terms of the changes in consumers' surplus and producers' rents associated with each policy. To accomplish this objective an econometric model of demand and supply relationships for the six grass seeds raised in the Willamette Valley was developed. To establish a reasonable range for policy-induced changes in consumers' surplus and producers' rents, three alternative supply situations were postulated, and costs of grass seed production under each policy were assumed to increase by $5.00, $9.00, and $13.00 per acre, respectively. Supply situation I assumed positively-sloped Oregon and non-Oregon supply curves whereas situation II assumed a perfectly inelastic Oregon supply curve and a positively-sloped non-Oregon supply curve. Supply situation III postulated a perfectly elastic non-Oregon and a positively-sloped Oregon supply curve. In supply situation I, depending upon policy and assumed increase in costs of seed production, the relative decrease in consumers' surplus varied from 3 to 15 percent at national level when aggregated over all six grass seeds. Oregon producers' rents were predicted to decline by 4 to 20 percent. The increases in non-Oregon rents under each policy and assumed cost increase were only about 20 percent of the losses in Oregon rents. Consequently, the relative decreases in the sum of consumers' surplus and producers' rents (Oregon and non-Oregon) were approximately equal to the decreases in consumers' surplus. Since under supply situation II and III seed prices remained unchanged, only changes in Oregon producers' rents needed estimation. Decreases in Oregon rents in situation II were 6 to 12 percent smaller than in situation I. In contrast, the results for supply situation III suggested that, other things equal, the greater the responsiveness of non-Oregon supplies to price, the greater the losses in Oregon producers' rents. To provide additional perspective on the possible economic impacts of regulating open field burning, changes in earnings in grass seed production were translated into changes in the value of agricultural land now in seed production in the Willamette Valley. To accomplish this objective, the relative decreases in seed production earnings were estimated for supply situations I and II, and a model of the determinants of Willamette Valley grass seed land values was developed. The model predicted that land values in the Willamette Valley would typically decline by approximately two to nine percent depending upon the type of controls imposed on open field burning and the associated cost increase. Although the methodological approach followed in this study is traditional, new measurement techniques are employed to estimate changes in the economic well-being of grass seed producers in Oregon. Furthermore, the extension of partial welfare analysis to predict the effects of Oregon's regulatory policies on the well-being of non-Oregon producers also distinguishes the findings of this study from those of other studies with similar methodological approaches.