Modeling Costs and Benefits of Biodegradable Mulches SCRI BDM Economics Working Group Srinivasa Ponnaluru June 1, 2011

Introduction Agricultural production results in an array of emissions.  Mulch residues in soil  Toxic fumes from burning of plastics Build up of pollutants in soil, and environment can affect production. Stock of pollutants changes over time due to  Additional loads (mulch usage)  Decay of existing stocks 2

Model Net benefits can be specified as: 3 B –benefits TC –total cost of production D –damages from pollutant C –cost of emission control E – current emissions S –stock of pollutant P –price of output Q –quantity of output x –traditional inputs

Costs… Costs of emission control  Collection, transportation, landfill fees Costs of production  Input costs, labor, operational costs Maintenance costs  Wind, hail, flooding damage… 4

Benefits Revenues from sale of produce Price premiums  Early maturity  Higher yield  Higher quality  Longer shelf life Reduced plant protection chemical usage  Lower pest and disease incidence (...?) Soil quality changes (…benefits…?) Irrigation water savings (…?) 5

WA Enterprise Budget: High tunnel Tomato 6

Variable costs 7

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Fixed costs 9

Comparison per 1000 ft 2 10

Summary Specification of damage function Data needs for estimating price premiums Enterprise budgets  Open field tomato  High tunnel tomato 11

Thank You 12