Document Type

Journal Article

Publication Date

12-8-2022

Publication Title

American Journal of Agricultural Economics

College/School

Hutson School of Agriculture

Abstract

Growers have increasingly expressed frustration over the negative externalities created by their neighbor's production practices. These spatial agricultural network problems include issues such as cross-pollination and herbicide drift. We develop novel methods for estimating parameters that allow us to adapt and apply general network diffusion models to these spatial agricultural network problems. Doing so allows us to calculate externality damage within a region and calculate cost-effective policies for alleviating that externality. We empirically illustrate, motivate, and test this approach by applying it to hemp. We find that network structure is an important factor in externality size and cost-effective policy response for spatial agricultural network problems. We also find that policies that are implemented early and proactively are more likely to be successful and cost effective than policies implemented retroactively. Finally, we find that in our application of limiting the cross-pollination damage experienced by growers of feminized hemp from non-feminized hemp growers, the most cost-effective policy is to establish a regional quota on non-feminized production combined with intertemporal cultivar spacing. This policy response will likely change across time and region as economic and network variables evolve.

Comments

This is an Accepted Manuscript of a peer-reviewed article published by Wiley in American Journal of Agricultural Economics, available at https://doi.org/10.1111/ajae.12359

This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited."


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