|Abstract or Summary
- 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.