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Agricultural Amenities and Optimal Land Use: The Case of Israel. Iddo Kan, §† David Haim. † Mickey Rapaport-Rom † and Mordechai Shechter † § The Department of Agricultural Economics and Management; The Robert H. Smith Faculty of Agriculture, Food and - PowerPoint PPT Presentation
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Agricultural Amenities and Agricultural Amenities and Optimal Land Use:Optimal Land Use:The Case of IsraelThe Case of Israel
Iddo Kan, Iddo Kan, §† §† David Haim.David Haim.†† Mickey Rapaport-Rom Mickey Rapaport-Rom†† and Mordechai Shechterand Mordechai Shechter††
§ The Department of Agricultural Economics and Management; § The Department of Agricultural Economics and Management; The Robert H. Smith Faculty of Agriculture, Food and The Robert H. Smith Faculty of Agriculture, Food and Environment; The Hebrew University of Jerusalem, Israel.Environment; The Hebrew University of Jerusalem, Israel.
† † Natural Resources and Environmental Research Center; Natural Resources and Environmental Research Center; University of Haifa, Israel.University of Haifa, Israel.
Conservation of LandConservation of Land
Fostering Water ResourcesFostering Water Resources
Preservation of the Natural EnvironmentPreservation of the Natural Environment
Development of Favorable Landscapes (Development of Favorable Landscapes (AmenitiesAmenities))
Maintenance of Cultural HeritageMaintenance of Cultural Heritage
Recreation/RelaxationRecreation/Relaxation
Viability of Rural CommunityViability of Rural Community
Food SecurityFood Security
Multi-Functionality of AgricultureMulti-Functionality of Agriculture
Studies on Agricultural AmenitiesStudies on Agricultural Amenities
Evaluations of positive effects of agricultural landscapes
USA - Halstead (1984), Bergstrom et al. (1985), Beasley et al.
(1986), Ready et al. (1997);
Canada - Bowker and Didychuk (1994);
Austria - Hackl and Pruckner (1997);
Israel - Fleischer and Tsur (2003, 2009).
Impacts of agricultural amenities on urban-rural land allocation
McConnell (1989), Lopez et al. (1994), Brunstad et al. (1999),
Fleischer and Tsus (2009).
Estimations of amenity values associated with different crops
Drake (1992), Brunstad et al. (1999), and Fleischer and Tsur (2009).
Fleischer and Tsur analyze the impact of amenities on rural-urban land allocation under population growth.
They assume constant-return-to-scale of agricultural activities.
In other words, they ignore changes in intra-agricultural land allocation among crops.
Our study focuses on improving social welfare by re-allocation of land among crops.
AssumptionsAssumptions
Policy: Regional communities consider setting a policy to encourage farmers to replace the profit maximization (PM) land allocation with the socially optimal (SO) land allocation;E.g., by compensating farmers for the profit-loss associated with the deviation from the PM solution.
Amenity Benefits: Each community takes into account only the amenities provided by the region’s agricultural lands, and only to the local residents.
Land Allocation: Rural-urban land allocations are not affected by the policy.
Research QuestionsResearch Questions
What is the impact of agricultural amenities on the socially optimal intra-agricultural land allocation among crops?
What is the welfare loss associated with ignoring the amenity value?
How the size of regional areas influences the benefits obtained from encouraging the growing of high-amenity crops?
Developing a regional scale agricultural land-use positive-Developing a regional scale agricultural land-use positive-
mathematical programming model (based on Howitt, 1995):mathematical programming model (based on Howitt, 1995):
(Suitable when only limited amount of land-use data is available)(Suitable when only limited amount of land-use data is available)
Stage I.Stage I. Calibrating the model such that it reproduces land use Calibrating the model such that it reproduces land use
observed in a base-year (2002)observed in a base-year (2002)
(the assumed profit-maximization solution).(the assumed profit-maximization solution).
Stage II.Stage II. Computing optimal allocation of land among crops Computing optimal allocation of land among crops
when the amenity value is introduced into the objective when the amenity value is introduced into the objective
function function
(the socially-optimal solution).(the socially-optimal solution).
MethodologyMethodology
Ll
ts
lllypΠ
I
ii
I
iiiiiiii
ll I
1
1
2
,...,
..
max1
The Mathematical Programming ModelThe Mathematical Programming Model
IllNA ,...,, 1
First StageCalibrating the cost functions based on the assumed profit maximization solution
Second Stage Adding the amenity-value function and calculating the socially optimal solution
0
200
400
600
800
1000
0 100 200 300 400 500
py-Fpy-F
py-Fpy-F
Tomato (Greenhouse)Tomato (Greenhouse) Wheat (Open field)Wheat (Open field)
py-py---((ll))py-py---(500-(500-ll))
Calibrating for land allocation under the PM solutionCalibrating for land allocation under the PM solutionand solving for the SO land allocationand solving for the SO land allocation
Land (hectares)
$/he
ctar
e-ye
ar py-py---(500-(500-ll))++AA
Profit Loss
Welfare Increase
PM Solution
SO Solution
Amenity Value Increase
Ll
ts
llNAlyplW
I
ii
I
I
iiiiiii
ll I
1
11
,...,
..
,...,,max1
The Mathematical Programming ModelThe Mathematical Programming Modelunder the Socially-Optimal Solutionunder the Socially-Optimal Solution
322331132112
22
13
11,...,, LLγLLγLLγ)LρL(μNllNA nn
nnnI
Fleischer & Tsur (2009):
L1 = Orchards & Citrus
L2 = Vegetables, Field Crops & Preserved Open Spaces
L3 = Greenhouses
Depends on regional specific factors (income, etc.)
0
0.5
1
1.5
2
0 5000 10000 15000 20000 25000
Regional Agricultural Land (ha)
cen
t/h
ouse
hol
d-h
a-yr
0
0.5
1
1.5
2
0 5000 10000 15000 20000 25000
Regional Agricultural Land (ha)
cen
t/h
ouse
hol
d-h
a-yr
All Crops
L1 - Orchards & Citrus
L2 - Vegetables & Field Crops
L3 - Greenhouse
0
0.5
1
1.5
2
0 5000 10000 15000 20000 25000
Regional Agricultural Land (ha)
cent
/hou
seho
ld-h
a-yr
Lopez (1994) - Deerfield Mass., US
Lopez (1994) - East Longmeadow Mass., US
Lopez (1994) - Alaska, US
Fleischer & Tsur (2008) - Israel
Marginal (maximal) Amenity Value:Marginal (maximal) Amenity Value:Variation with Regional Agricultural SizeVariation with Regional Agricultural Size
0L
L 1 - Orchards & Citrus
L 2 - Vegetables, Field Crops & Open Spaces
L 3 - Greenhouses
0500
1,0001,5002,0002,5003,0003,5004,0004,500
0 5,000 10,000 15,000 20,000 25,000 30,000
L1 (
ha)
Maximum Amenity
0
5,000
10,000
15,000
20,000
25,000
30,000
0 5,000 10,000 15,000 20,000 25,000 30,000
L2 (
ha)
0
500
1,000
1,500
2,000
2,500
3,000
0 5,000 10,000 15,000 20,000 25,000 30,000Regional Agricultural Land (ha)
L3 (
ha)
Regional Regional Size Effect Size Effect
0L
0
0.5
1
1.5
2
0 5000 10000 15000 20000 25000
Regional Agricultural Land (ha)
cen
t/h
ouse
hol
d-h
a-yr
All Crops
L1 - Orchards & Citrus
L2 - Vegetables & Field Crops
L3 - Greenhouse
Israel -Israel -Partitioning Partitioning intointoNatural ZonesNatural Zones
Natural Regions
Observed Nationwide Land Allocation among 45 CropsObserved Nationwide Land Allocation among 45 Crops (2002, The Assumed Profit-Maximization Solution) (2002, The Assumed Profit-Maximization Solution)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Ora
nge
Gra
pefr
uit
Lem
ons
App
les
Pea
r
Pea
ch
Plu
m
Tab
le G
rape
s
Win
e G
rape
s
Ban
ana
Oli
ves
non-
irri
gate
d
Oli
ve I
rrig
ated
Alm
ond
Avo
cado
Pal
m
Pot
ato
Tom
ato
open
-fie
ld
Egg
plan
t
Veg
etab
le M
arro
w
Oni
on
Car
rot
Let
tuce
Cab
bage
Cau
liflo
wer
Cel
ery
Rad
ish
Art
icho
ke
Gar
lic
Bea
n
Whe
at
Bar
ley
Cot
ton
Chi
ckpe
a
Cor
n
Pea
Gro
undn
ut
Sun
flow
er
Win
ter
For
age
Sum
mer
For
age
Wat
er-m
elon
Sug
ar-m
elon
Tom
ato
gree
nhou
se
Cuc
umbe
r
Pep
per
Str
awbe
rry
Lan
d (
ha)
Orchards & CitrusOrchards & Citrus Vegetables & Field CropsVegetables & Field Crops GreenhouseGreenhouse
Nationwide Results Nationwide Results
Profit Maximization
Socially Optimum Difference Difference (%)
PM SO SO-PM 100(SO-PM)/SO
Welfare Elements (106 $/yr)
Farming Profits 456.5 454.0 -2.5 -0.5
Amenity Value 212.4 231.0 18.6 8.8
Social Welfare 668.9 685.1 16.2 2.4
Land Allocation (ha)
Orchards and Citrus 61,179 61,659 480 0.8
Vegetables & Field Crops 310,794 309,002 -1791 -0.6
Greenhouses 16,189 17,579 1390 8.6
30%
18.6/2.5≈7.5
Regional Scale Changes in Welfare ElementsRegional Scale Changes in Welfare Elements($/yr)($/yr)
0
0.5
1
1.5
2
2.5
3
Her
mon
(29
1)
Hul
a B
asin
(21
1)
Nor
ther
n G
olan
(29
2)
Eas
tern
Upp
er G
alil
ee (
212)
Elo
n (2
44)
Nah
ariy
ya (
245)
Mid
dle
Gol
an (
293)
Yeh
i'am
(24
3)
Haz
or (
213)
Akk
o (2
46)
Kin
nero
t (22
1)
Sou
ther
n G
olan
(29
4)
Eas
tern
Low
er G
alil
ee (
222)
She
far'a
m (
241)
Kar
mi'e
l (24
2)
Hai
fa (
311)
Naz
aret
h M
ount
ains
(23
7)
Hof
HaK
arm
el (
321)
Zik
hron
Ya'
aqov
(32
2)
Jezr
ael V
alle
y (2
34)
Yoq
ne'a
m (
235)
Kok
hav
Pla
teau
(23
3)
Men
ashe
(23
6)
Har
od V
alle
y (2
32)
Bet
She
'an
Bas
in (
231)
Ale
xand
er M
ount
ain
(323
)
Had
era
(324
)
Wes
t S
haro
n (4
11)
Eas
t S
haro
n (
412)
Sou
ther
n S
haro
n (4
21)
Pet
ah T
iqw
a (4
22)
Lod
(43
1)
Ris
hon
Lez
iyyo
n (4
42)
Tel
Avi
v (5
11)
Ram
at G
an (
512)
Hol
on (
513)
Reh
ovot
(44
1)
Ash
dod
(613
)
Jude
an M
ount
ains
(11
1)
Jude
an F
ooth
ills
(11
2)
Mal
'akh
i (61
1)
Ash
qelo
n (6
14)
Lak
hish
(61
2)
106 $
/yea
r
Profit Reduction
Welfare Increase
Regional Scale Changes in Welfare Elements (%)Regional Scale Changes in Welfare Elements (%)
0
2
4
6
8
10
12
14
16
Her
mon
(29
1)
Hul
a B
asin
(21
1)
Nor
ther
n G
olan
(29
2)
Eas
tern
Upp
er G
alile
e (2
12)
Elo
n (2
44)
Nah
ariy
ya (
245)
Mid
dle
Gol
an (
293)
Yeh
i'am
(24
3)
Haz
or (
213)
Akk
o (2
46)
Kin
nero
t (22
1)
Sou
ther
n G
olan
(29
4)
Eas
tern
Low
er G
alile
e (2
22)
She
far'a
m (
241)
Kar
mi'e
l (24
2)
Hai
fa (
311)
Naz
aret
h M
ount
ains
(23
7)
Hof
HaK
arm
el (
321)
Zik
hron
Ya'
aqov
(32
2)
Jezr
ael V
alle
y (2
34)
Yoq
ne'a
m (
235)
Kok
hav
Pla
teau
(23
3)
Men
ashe
(23
6)
Har
od V
alle
y (2
32)
Bet
She
'an
Bas
in (
231)
Ale
xand
er M
ount
ain
(323
)
Had
era
(324
)
Wes
t S
haro
n (4
11)
Eas
t S
haro
n (
412)
Sou
ther
n S
haro
n (4
21)
Pet
ah T
iqw
a (4
22)
Lod
(43
1)
Ris
hon
Lez
iyyo
n (4
42)
Tel
Avi
v (5
11)
Ram
at G
an (
512)
Hol
on (
513)
Reh
ovot
(44
1)
Ash
dod
(613
)
Jude
an M
ount
ains
(11
1)
Jude
an F
ooth
ills
(112
)
Mal
'akh
i (61
1)
Ash
qelo
n (6
14)
Lak
hish
(61
2)
%
Profit Reduction
Welfare Increase
ConclusionAllow local communities to decide on policy implementation,rather than applying a nationwide program.
L 1 - Orchards & Citrus
L 2 - Vegetables, Field Crops & Open Spaces
L 3 - Greenhouses
0500
1,0001,5002,0002,5003,0003,5004,0004,500
0 5,000 10,000 15,000 20,000 25,000 30,000
L1 (
ha)
Maximum Amenity
0
5,000
10,000
15,000
20,000
25,000
30,000
0 5,000 10,000 15,000 20,000 25,000 30,000
L2 (
ha)
0
500
1,000
1,500
2,000
2,500
3,000
0 5,000 10,000 15,000 20,000 25,000 30,000Regional Agricultural Land (ha)
L3 (
ha)
L 1 - Orchards & Citrus
L 2 - Vegetables, Field Crops & Open Spaces
L 3 - Greenhouses
0500
1,0001,5002,0002,5003,0003,5004,0004,500
0 5,000 10,000 15,000 20,000 25,000 30,000
L1 (
ha)
Maximum Amenity
Profit Maximization
0
5,000
10,000
15,000
20,000
25,000
30,000
0 5,000 10,000 15,000 20,000 25,000 30,000
L2 (
ha)
0
500
1,000
1,500
2,000
2,500
3,000
0 5,000 10,000 15,000 20,000 25,000 30,000Regional Agricultural Land (ha)
L3 (
ha)
L 1 - Orchards & Citrus
L 2 - Vegetables, Field Crops & Open Spaces
L 3 - Greenhouses
0500
1,0001,5002,0002,5003,0003,5004,0004,500
0 5,000 10,000 15,000 20,000 25,000 30,000
L1 (
ha)
Maximum Amenity
Profit Maximization
Socially Optimum
0
5,000
10,000
15,000
20,000
25,000
30,000
0 5,000 10,000 15,000 20,000 25,000 30,000
L2 (
ha)
0
500
1,000
1,500
2,000
2,500
3,000
0 5,000 10,000 15,000 20,000 25,000 30,000Regional Agricultural Land (ha)
L3 (
ha)
Regional Regional Size Effect Size Effect
0L
0
0.5
1
1.5
2
0 5000 10000 15000 20000 25000
Regional Agricultural Land (ha)
cen
t/h
ouse
hol
d-h
a-yr
All Crops
L1 - Orchards & Citrus
L2 - Vegetables & Field Crops
L3 - Greenhouse
In regions larger than L0, the PM land allocation may also be the SO land allocation.
Partitioning the country into larger regions increases the probability of such events.
However, the amenity-value function itself may depend on the regional scale.
Thus, it is essential to conduct such an analysis while using an amenity-value function, which is estimated based on the same regional partition.
Nationwide benefits are estimated at only 2.4%, whereas regional benefits amount to up to 15%. Therefore:
It is recommended to grant local communities the authority to decide on policy implementation, instead of applying a nationwide program.
Why are the SO and PM land allocations so similar?a) Willingness to pay may be small.b) The preferred agricultural landscape may be similar to the observed
one due to adaptation of the population to its surrounding. What are the implications of the regional size effect? a) It is essential to use an amenity-value function, which is estimated
based on the same regional scale, as done here.b) However, it is unknown whether the selected partitioning of the
country into “natural zones” represents the actual exposure of residents to the agricultural landscape in their surrounding.
Concluding RemarksConcluding Remarks
Thank you for your Thank you for your attention!attention!