Improving Environmental Quality in South Florida through Silvopasture: An Economic Approach
Stainback, G. Andrew, Alavalapati, Janaki R. R., Shrestha, Ram K., Larkin, Sherry, Wong, Grace, Journal of Agricultural and Applied Economics
A dynamic optimization model is used to compare the profitability of silvopasture with traditional cattle ranching in south Florida. Silvopasture can reduce phosphorus runoff from cattle ranching-a major environmental concern for Lake Okeechobee and the Everglades. Silvopasture can also sequester carbon, thereby offsetting global climate change. The effectiveness of phosphorus runoff taxes and carbon sequestration payments for inducing landowners to adopt silvopasture is investigated. We find that phosphorus taxes alone would not induce landowners to adopt silvopasture. However, payments to landowners to sequester carbon, alone or in conjunction with phosphorus runoff taxes, can make silvopasture financially competitive with traditional ranching.
Key Words: carbon sequestration, cattle ranching, Faustmann model, global climate change, phosphorus runoff, silvopasture, slash pine, tax
JEL Classifications: Q57, Q23
Cattle ranching is an important agricultural enterprise in Florida, covering over 6 million acres and producing over $300 million each year with over 1.8 million cattle. Florida is the 10th largest cattle producer in the United States. Over 60% of cattle production in Florida occurs near Lake Okeechobee and the Everglades (South Florida), which is a subtropical ecosystem that is naturally low in phosphorus content. Since phosphorus runoff from cattle ranching can cause significant ecological degradation to Lake Okeechobee and the Everglades, cattle ranching has long been a significant environmental concern in this region. In this study we assess economic impacts of taxes to reduce phosphorus runoff and payments for carbon sequestration when trees are grown on ranchlands in the Lake Okeechobee watershed.
Lake Okeechobee is a large freshwater lake of 730 square miles and a drainage basin of approximately 5,000 square miles (Harvey and Havens). Historically, Lake Okeechobee would overflow in response to heavy rains and feed the Everglades-a vast slow-moving shallow river that empties into Florida Bay. During the last century, Lake Okeechobee and the Everglades have been subjected to massive water control projects by the Army Corps of Engineers and the South Florida Water Management District (SFWMD). Levees, drainage canals, and pump stations were constructed under these projects to drain parts of the Everglades, protect areas from flooding, and to make land available for agriculture (including cattle ranching) and urban development. The resulting land use changes have had a profound impact on environmental quality in South Florida. In particular, the phosphorus content of Lake Okeechobee has more than doubled over the past century, causing eutrophication and subsequent damage to its aquatic life (Harvey and Havens). The phosphorus content of the downstream Everglades ecosystem has also increased, causing a displacement of native sawgrass prairies with cattail and other plants (Rizzardi).
These environmental concerns were part of the impetus for the U.S. federal government and the state of Florida to adopt the Comprehensive Everglades Restoration Plan (CERP) in the late 1990s. CERP is a massive initiative projected to cost more than $7.8 billion over 30 years. The aim of this plan is to partly restore the Everglades and Lake Okeechobee ecosystems and to provide for the water needs of the agricultural industry and expanding urban areas in South Florida. In addition, in 1999 the SFWMD issued the Lake Okeechobee Action Plan in which it recommended that reduction of phosphorus runoff should be a major part of restoration of the lake and downstream Everglades (Harvey and Havens). These programs do not address alternative land uses or the incentives for land use changes that could be more effective at achieving the desired lower phosphorus levels.
Silvopasture, jointly managing the production of trees and livestock forage, may be an economically viable way to improve environmental quality associated with cattle ranching in South Florida. …