Estimates of the marginal internal rate of return to expenditures for research by the Maine Agricultural Experiment Station are presented. Estimates are performed using ridge regression under an array of specifications, including alternative functional forms, lag structures, costs of public funds, and variable specifications. The results are consistent with many previous results that imply an underinvestment in agricultural research.

The use of chemical pesticides frequently causes minor pests to become serious problems by disturbing the natural controls that keep them in check. As a result, it is possible to suffer heavier crop losses after pesticides are introduced than before their introduction. Efficient use of pesticides requires complete biological modeling that takes the appropriate predator-prey relationships into account. A bioeconomic model is introduced involving three key species: a primary target pest, a secondary pest, and a natural enemy of the secondary pest. Optimal decision rules are derived and contrasted with myopic decision making, which treats the predator-prey system as an externality. The issue of resistance in the secondary pest is examined briefly.

This article explores the speed of adjustment in Indian agricultural labor markets to changing economic circumstances. Agricultural wages in sixteen states during 1970–86 are analyzed. Results indicate that agricultural wages adjust quickly toward their long-run values, completing about one-fifth to one-fourth of the adjustment per year. Results also suggest strong linkages between the agricultural and nonagricultural labor markets. Interstate agricultural productivity differences have risen substantially in the last twenty-five years, and many feel this has led to a disintegration of the agricultural labor market. The findings suggest an indirect integration may be occurring through migration to nonagriculture.

Expected prices and expected net returns from cropping activities are used to estimate soybean acreage response in the Northeast. Futures prices and lagged cash prices constitute proxies for price expectations. Expected net returns appear as good or better than expected prices for estimating acreage response. Short-run and long-run elasticities of soybean acreage with respect to expected net returns from soybeans are estimated as 0.5 and 1.6 for the northeast region. Soybean acreage appears less responsive to changes in expected net returns than to expected changes in prices.

Preliminary forecasts using the Box-Jenkins methodology for supermarket scan data for ground beef and roast item movement are described. The functional form and the accuracy of the forecasts vary by product. Results suggest that further analyses incorporating price and advertising may increase the accuracy of the forecasts.

Growing evidence of surface-water and groundwater contamination has led to demands for federal and state water quality protection policies. Agriculture will be an important target of such policies. Numerous instances of surface-water and groundwater contamination by pesticides and fertilizers have been recorded, and one study estimates that the drinking water of 50 million people in the U.S. is potentially contaminated by agricultural chemicals (Hallberg, Nielsen and Lee).

Agriculture's impact on the environment is a complex research problem. A challenge to future economic research is to account for the interrelationship between agricultural production activities, soil productivity, erosion, and water quality. It will become increasingly important to determine not only the economic consequences, but also the environmental effectiveness of alternative policies aimed at improving resource use and quality. The application of biophysical simulation models to environmental quality problems provides a means to better understand the complex interaction between agricultural production and environmental quality.

Chemical use in agriculture has, over the last fifty years, been the good, the bad, and the uncertain. By all accounts, agricultural productivity increased significantly in the last half century due in part to the introduction and expanded use of agricultural chemicals. More recently, however, some agricultural practices, including increased chemical use, are viewed as having a major impact on the larger ecosystem and as being an important source of environmental nonpoint pollution. Recent groundwater-monitoring programs in the United States sponsored by the U.S. Environmental Protection Agency (EPA) have revealed contamination of underground water supplies by pesticides, nitrates, and other industrial organic chemicals. It has also been questioned whether the high rates of productivity growth that have characterized modern agriculture can be sustained with technologies that disrupt the ecosystem. While there is no doubt that production agriculture does affect the ecosystem, it is not obvious that these effects are necessarily widespread and deleterious to the environment or to long-run productivity, or, if they are, how they should be valued and traded-off with other social objectives.

Control of nonpoint sources of pollution has traditionally been within the domain of local decision makers in recognition of the critical importance of site-specific issues. More recently attention has turned to the issue of what can and should be done at the regional or national level, while recognizing the importance of site-specific attributes. This paper describes and illustrates an approach for analysis of nonpoint pollution problems that focuses jointly at the aggregate and disaggregate levels of the problem. The approach is based on linking two tools of analysis, the microparameter distribution model and the Geographical Information Systems (GIS). Although there are significant challenges to be overcome in implementing such an approach, linkage of these two policy tools has considerable promise in dealing with site-specific issues within an aggregate framework. Furthermore, GIS is potentially an important source of data for economists to exploit, given the momentum of GIS systems throughout the nation and given the relatively disaggregate nature of the data.

Growing concern over resource use and protection of the environment has prompted greater demand for agricultural policy analysis at the local, regional, and national levels. Faced with declining surface-water quality, silting of reservoirs, and contaminated groundwater supplies, the public has demanded greater protection of the environment. With the call for more regulation of agriculture comes the need for policy analysis. What policy is best? Should a national standard apply, or do local conditions warrant local standards? Who will benefit, and who will lose, and by how much?

U.S. farmers are faced with growing environmental concerns and rising costs associated with highly specialized farming operations. They are searching for farming systems that are both ecologically sound and economically viable. They are searching for sustainable systems of farming.

Agricultural development in both the United States and Australia has led to suboptimal levels of environmental degradation. While both countries face similar forms of agricultural environmental degradation, the different resource endowment and population distributions have resulted in a different incidence of the costs of these problems. Increasing demand for environmental services and better information on off-site damages have led to increasing demand for reform of agricultural, rural development, and environmental programs to eliminate biases against practices viewed as more environmentally compatible.

The agricultural policy agenda in the United States, Canada, and in Western Europe has been increasingly influenced by concerns for the sustainability of agricultural production systems. National, state, and provincial governments in North America are becoming increasingly sensitive to the environmental and human-health risks associated with current modes of agricultural production and policy actions, including restrictions on the use of certain agricultural chemicals and inducements to encourage the use of alternative production practices. Many restrictions and inducements have been undertaken or are currently under consideration in many jurisdictions.