Best Management Practices in Canada:
An Economic Perspective and Some
Considerations
B. James Deaton1
Associate Professor
1. The general direction of this presentation and some slides come from
Dr. James Vercammen’s scheduled presentation. His slides are identified.
AAFC & OMAFRA
• “A profitable and innovative agriculture, agri-food and
agri-based products industry that seizes opportunities in
responding to market demands and contributes to the
health and well-being of Canadians.” AAFC Growing
Forward Vision Statement
• OMAFRA definition of BMP:
“A practical, affordable approach to conserving a farm’s
soil and water resources without sacrificing
productivity.”
http://www.omafra.gov.on.ca/english/environment/bmp/series.htm
BMP Policy
•
Federal & Provincial
– e.g., (COFSP)
• AAFC & OMAFRA
•
– Administration &
Implementation
• Ontario Federation of
Agriculture
• Ontario Soil and Crop
Improvement Association
Process for eligible producers
– Environmental Farm Plan (EFP)
– Cost-share funds for projects
•
Examples:
– Runoff controls
• e.g. Diversion around
farmyard operations.
• Constructed wetlands
– Buffer establishment in riparian
areas
– Fencing
– Windbreaks
– Precision Agriculture (GPS)
– Anaerobic Digester
V
James Vercammen
Market System & Externality
Adam Smith
A.C. Pigou
Ronald Coase
Questions
• The effect of BMP on net-farm income?
– Increase
– Reduce
– Neutral
• Cost-Effectiveness
– How to target to maximize net-benefits to
society?
1. See The Porter Hypothesis at 20: Ambec, S., M. Cohen, S. Elgie and P. Lanoie
BMP Adoption and Farm Profitability
• L. Valentin, D.J. Bernardo, Kasten. 2004.
Review of Agricultural Economics
– Nutrient BMPs had a positive effect on net
farm income
– Herbicide BMPs had a negative impact on
income.
Is Federal Government Expenditure on
BMP Cost-Sharing Cost-Efficient?
• As of 2008 Federal government has spent $175
million on 43,000 projects (more than 25% were
GPS Cropping Systems on the Prairies).
• Would the farmer have purchased a GPS-based
cropping system without program?
• Targeting difficult due to farmer heterogeneity.
James Vercammen
Watershed Evaluation of BMPs (WEBS)
• WEBS (initiated by AAFC in 2004) measures the
effectiveness of BMPs designed to reduce nutrient
seepage into waterways.
• BMPs include fencing waterways, conservation
tillage and containment pods.
• BMPs are found to be environmentally effective but
generally provide a low private return.
James Vercammen
Targeting Considerations
James Vercammen
James Vercammen
Farm and non-farm population in Canada, 1931 to 2006
Source: Statistics Canada (http://www.statcan.gc.ca/pub/16-201-x/2009000/ct045-
15
Who is the other?
% of Rental Land by Landlord
Category
2
4
5
16
10
19
7
Active Farmer
Retired Farmer
Widow(er)
Rural Residence
Owner Invest
Invest Company
Government
none of the above
36
16
Observations 392 Research conducted with James Bryan and A. Weersink
Riparian Buffer Case Study
• A riparian buffer is vegetation that separates
farmland from a waterway
• The buffer reduces the seepage of nutrients such as
manure from the land into the waterway
• AAFC combined data from 2006 Farm
Environmental Management Survey (FEMS) with
2006 Census of Agriculture data
• The survey asked the following question: “Do you
maintain a riparian buffer area around permanent
wetlands?”
James Vercammen
James Vercammen