Several state legislatures are considering enactment of tight zoning laws to preserve high productivity land for agricultural use. In the vernacular of the day, this land is referred to as "prime" (Raup, pp. 2, 3). Apparently, the myriad of tax preferential policies and other planning devices designed to protect agriculturallands from conversion to other uses have not been very effective (Hansen and Schwartz). Some of our best agricultural land continues to be converted to expanding urbanization, transport, utility easements, and for a variety of public purposes. So it is argued by those who advocate zoning for agricultural land that more drastic measures are now needed to stop this avalanche before "serious" agricultural land shortages occur.Of course, if social action is needed to retain prime land in agricultural use, the land market cannot efficiently allocate land resources among competing uses. The tax preference schemes were enacted to make it less costly to use land for agricultural purposes so that significant quantities of land would be kept in agricultural use that would otherwise shift. But use changes could still occur through the market if value differentials were great enough to offset the production cost advantage created by the tax preference. The crux of the proposed prime land preservation legislation is quite different; it removes the land allocation decisions from the market entirely by using productivity criteria to qualify land for preservation and by granting the power for exemptions and use changes to designated boards.
An optimal control model is used to determine the socially optimal spatial and temporal allocation of groundwater and surface water among agricultural and urban uses. The control model is described briefly and its advantages over other dynamic models are enumerated. Optimal rates of groundwater pumpage over the planning horizon were highly sensitive to increasing energy costs. Groundwater basins are shown to react differently to alternative economic and hydrological parameters. In a dynamic setting, a policy of pump taxes was shown empirically to be superior to pro-rata quotas and uncontrolled pumpage.Key words: control model, groundwater, energy cost, pro-rata allocation, Pigovian taxation.The severe drought in the western United States in 1976-78 brought the problems of allocating extremely limited water resources to the attention of agriculturalists and urbanites alike. Greatly reduced surface water supplies exacerbated the already critical pressure on remaining groundwater stocks in the same areas.The chronic overdraft of many western states groundwater basins can be attributed directly to their common pool nature. The lack of explicit property rights to groundwater stocks results in individual users of the resource evaluating only their own private pumping costs in their decision framework and implicitly assigning a zero opportunity cost to the stock portion of the resource. Thus, the private decision does not take into account any user cost and results in a divergence in the private and the social optimal rate of pumping. 1 The objective of this paper is to describe briefly an optimal control model which can be used to determine the socially optimal spatial and temporal allocation of groundwater and surface water among agricultural and urban uses. The control model is then applied to a representative region of California under several sets of energy costs. Two policies, prorata allocation and taxation, are evaluated empirically as alternatives for accounting for externalities due to the common pool problem. The Conceptual FrameworkSeveral authors have investigated the conjunctive use of groundwater and surface water using various techniques. Buras developed a dynamic programming algorithm to solve the problem of conjunctive use of reservoirs and aquifers. His operating policy, however, considered the physical system as a single unit and thus ignored differences in hydrology that occur in a complex groundwater system. Burt (1964, 1966, 1967a, b) utilized a mathematical programming approach to develop a demand function for irrigation water used in a dynamic programming formulation of the aquifer management problem. Bredehoeft and Young used a simulation model to estimate the solution of problems involving the development of a stream-aquifer system in an economic model of irrigation. Bear and Levin studied optimal utilization of an aquifer as one element of a Jay E. Noel is a resource economist with Auslam and Associates,
T HE federal government owns about 400 million acres of land in the eleven western states. Almost 350 million acres are administered by the Forest Service and Bureau of Land Management. In times past most of this land has been used for grazing by domestic livestock. Only approximately 60 million acres of forest range are presently grazed by livestock, while about 160 million acres of "district" land, administered by the BLM, are grazed.The first section of this paper is a description and critique of current practices used by these agencies to allocate grazing services. The following sections present a proposal to effect changes in allocating and pricing public grazing that would improve economic efficiency, both in getting the permits to livestock operators who value them most highly and in securing more investment in range improvement and in range care and management. Rules for Issuance of Grazing PermitsThe Forest Service and the Bureau of Land Management administer livestock grazing as part of multiple-use programs. Although some minor differences exist, the essential components of their grazing administration procedures are quite similar. Lees briefly look at each system, starting with that of the Forest Service.Within each ranger district of a national forest, the ranges prescribed for livestock grazing are separated into range allotments in order to facilitate grazing administration.The allotments are established so as to conform to natural grazing units insofar as topography, water, adaptability of forage for different classes of livestock, present ownership of improvements and ranch property, and the demand for forest range will permit. The allotment, insofar as possible, should conform to district boundaries.'If an allotment is small enough, it may be allocated to a single permittee; but often allotments are so large they require "community" use by several permittees. o This paper was written while I was a Ford Foundation Faculty Research fellow. I extend thanks to the Foundation for financial support. The Foundation bears no responsibility for the views expressed herein, however; they are entirely my own. Colleagues N. K. Roberts, E. B. Wennergren and Lois Cox have read an earlier manuscript and have made valuable suggestions for its improvement.
M ANY publicly owned, productive services in agriculture are sold at administered prices. Often the prices are set below the value of the marginal product of the services, necessitating non-price rationing to users. Generally a permit or quota enables the user to obtain a given quantity of the service for some specified time period.A consequence of this pricing and allocating procedure is that the permit (quota) takes on a value if there is some way that the permit (quota) can be transferred to persons other than the initial recipient.This paper consists of a methodology which might be used to ascertain whether or not this kind of allocating procedure gives rise to misallocation of the service, assuming that a perfectly competitive market can be used as the optimum allocating device.The example used to illustrate the methodology is the rationing of public grazing among stockmen. However, water rights are similar in many pertinent respects to grazing permits, and the methods used here might fruitfully be considered in evaluating allocative efficiency in water use as well.The FrameworkIn a freely competitive market for the grazing services of range lands, both publicly and privately owned, the equilibrium price (for a given quality of service) would be the same for all buyers (users) and equal to the value of the marginal product of the grazing service. For simplicity suppose that all grazing land resources are homogeneous and that in a free market the price per unit of their services is x. Further, suppose that the private grazing market is perfectly competitive. Let Xp be the price per unit of private grazing. It follows that Xp equals x. Now suppose that the fee per unit charged by the government agencies for public grazing is Xg and that Xg is less than Xp • It follows that Xg is less than the value of the marginal product for the grazing service and the government agencies must use a rationing device to allocate the services of public grazing lands to users. A permit system has been devised for this purpose.o This paper is a segment of a larger study undertaken as a dissertation at the University of Chicago. In the development of the larger work I benefited greatly from suggestions from my dissertation committee, Professors D. Gale Johnson, H. Gregg Lewis, and Zvi Griliches. My former colleague at Brigham Young, Allen LeBaron, read an earlier draft of this paper and made some timely suggestions. 50 at University of Iowa Libraries/Serials Acquisitions on July 24, 2015 http://ajae.oxfordjournals.org/ Downloaded from v.bSALLOCATION IN GRAZING PuBLIC RANGE1 "An animal-unit-month (AUM) is that amount of natural or cultivated feed necessary for the sustenance of one cow or its equivalent for the period of one month.r--The Federal Range Code (Washington: U.S.
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