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The publication of AREI 1996-97 involved many ERS staff. Tom McDonald and Deana Kussman were timely and efficient proofreaders. A special thanks to William Anderson, who provided guidance and counsel. Naconda Bilbo, Nora McCann, Carol Stillwagon, and Sandy Uhler provided typing assistance. Kathryn Zeimetz helped plan distribution. We also thank those who took the time to review specific chapters and provide their insights, edits, and suggestions for improving the quality of AREI (agency designations are within USDA except as noted): Mary Ahearn (ERS), Arnold Aspelin (EPA), Alex Barbarika (FSA), Daryl Brinkman (NASS), Dale Bucks (ARS), Margriet Caswell (ERS). Betsy Cody (CRS), Gerrit Cuperus (CSREES), James Duffield (ERS), David Ervin (Henry A. Wallace Institute), Craig Faanes (FWS), George Frisvold (ERS), Jon Goldstein (USDI/OPA), LeRoy Hansen (ERS), Malcolm Henning (NRCS), Michael Jawson (ARS), James Johnson (ERS), Robert Kellogg (NRCS), W. Doral Kemper (ARS), Douglas Kleweno (NASS), Charles Lander (NRCS), Gerald Larson (OBPA), Lois Levitan (Cornell University), James Lewis (NRCS), Michael Linsenbigler (FSA), John McClelland (ERS), Ron Marlow (NRCS), Maurice Mausbach (Soil Quality Institute), John Meisinger (ARS), Jeanne Melanson (NRCS), George Norton (ERS), Merritt Padgitt (ERS), David Peacock (ERS), Craig Phillipps (USDI/BOR), Steve Plotkin (NRCS), Carl Pray (Rutgers University), Edward Rall (FSA), Robert Reinsel (ERS), Sam Rives (NASS), Doreen Robb (EPA), Glenn Schaible (ERS), David Schertz (NRCS), Larry Schluntz (USDI/BOR), Robbin Shoemaker (ERS), Benjamin Simon (USDI/OPA), Dan Smith (NRCS), Richard Smith (USGS), James Snow (OGC), Thomas Spofford (NRCS), John Stierna (NRCS), John Sutton (NRCS), Fred Swader (CSREES), Thomas Tice (FSA), Dan Towery (NRCS), Harry Vroomen (Fertilizer Institute), Don Wauchope (ARS), and Mary Wiening (USDC/ITA).

Authors and Contributors

Marcel Aillery, Margot Anderson, Charles Barnard, Leonard Bull, Margriet
Caswell, Lee Christensen, Roger Claassen, Stan Daberkow, Arthur Daugherty,
Kelly Day, Peter Feather, Jorge Fernandez-Cornejo, George Frisvold, Keith
Fuglie, Dwight Gadsby, Mohinder Gill, Noel Gollehon, Catherine Greene,
Ralph Heimlich, Jim Hrubovcak, Wen-yuan Huang, Bengt Hyberg, Kevin In-
gram, Sharon Jans, Paul Johnston, John Jones, C.S. Kim, Cassandra
Klotz-Ingram, Sarah Lynch, Jan Lewandrowski, Richard Magleby, C. Tim Os-
born, Craig Osteen, Merritt Padgitt, Renata Penn, William Quinby, Marc
Ribaudo, Carmen Sandretto, David Schimmelpfennig, Hosein Shapouri, Robbin
Shoemaker, Mark Smith, Harold Taylor, Abebayehu Tegene, Marlow Vesterby,
David Westenbarger, and Keith Wiebe.


This 1996-97 edition of Agricultural Resources and Environmental Indicators
(AREI) updates information provided in the first edition published in December
1994, and expands coverage to include more detailed data and analysis on resource-
conserving production practices. AREI takes stock of how natural resources (land
and water) and commercial inputs (energy, nutrients, pesticides, and machinery) are
used in the agricultural sector; shows how they contribute to environmental quality;
and links use and quality to technological change, production management prac-
tices, and farm programs. Our objective is to provide a comprehensive source of
data and analysis on the factors that affect resource use and quality in American ag-
riculture, and information on the costs and benefits of improving the quality of the
Nation's resources.

Because environmental indicators are used for multiple purposes, no single set can serve all needs. Uses of indicators range from identifying specific resource problems at local levels to providing national assessments of broad aggregates to judging the effectiveness of specific conservation and environmental programs. Most indicators are devoid of economic content: they are primarily physical measures. But indicators can also be constructed and used to help identify cost-effective solutions to solving resource-related problems and to help answer questions about whether we are using natural resources efficiently. For example, water quality indicators may point to a reduction in polluting chemicals in a lake or stream, but it is also important to know the costs associated with achieving such reductions and the value of the benefits provided by the cleaner water.

By focusing on the economic dimension of environmental indicators, AREI fills a unique niche in the indicators literature. Unlike other indicators reports, AREI is not a monitoring report in the sense of establishing an environmental baseline for interspatial or intertemporal comparisons of physical measures of environmental quality. Instead, AREI focuses on examining the complex economic links between agricultural activity and environmental performance and on assessing the costs and benefits associated with changes in resource quality.

Like the first edition, AREI 1996-97 begins with the two major agricultural re-
sources, land and water. We examine both the quantity and quality of land and
water, the factors that affect their use, and the value (market and nonmarket) associ-
ated with each. The subsequent chapters examine commercial inputs used in
agricultural production with a special emphasis on how input use affects the quality
of land, water, and wildlife habitat. We then turn to a set of chapters that examines
production management practices. Here we focus on describing the factors that af-
fect the adoption of these practices and examine how these practices can use
commercial inputs more efficiently and result in less damage to water and land re-
sources. These chapters are followed with an overview of agricultural technology
development, which focuses on how new technologies are developed, what public
policies encourage development and adoption, and how technological change is an
important factor in meeting conservation goals. The final set of chapters is devoted
to conservation and environmental programs with a particular emphasis on water
quality programs, the Conservation Reserve Program, Conservation Compliance,
and wetlands programs. Our goal is not only to describe the programs but to exam-
ine the associated costs and benefits to farmers, taxpayers, and consumers.

To facilitate the use of AREI 1996-97, we have provided an appendix that describes
the agricultural resource surveys and data used throughout the volume, and a sub-
ject index. Most chapters also contain a listing of related recent ERS reports.
AREI 1996-97 is also available on the ERS homepage at
under Briefing Rooms.


1.1 Land Use


The three major uses of land in the contiguous 48 States
are grassland pasture and range, forest-use land, and
cropland, in that order. Total cropland (used for crops,
used for pasture, and idled) has trended down slightly
since the late 1960's. Greater variation has occurred in
cropland used for crops, largely reflecting changes in
cropland idled in Federal crop programs. Also, weather,
such as the drought in 1988 and the heavy rains in 1993,
can strongly influence the mix and acreage of cropland
used for crops.

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Major Land Uses in the Contiguous States Grassland pasture and range, the largest use of land, accounted for 589 million acres (31 percent of major land uses in the 48 States) in 1992 (latest year data are available, table 1.1.2, fig. 1.1.1). (For definitions of land use terms, see "Glossary of Land Use Categories," p. 24.) However, grassland pasture and range has declined since the mid-1960's, when it was 636 million acres. One reason for this decline has


been that farmers-with assistance from the Cooperative State Research, Education and Extension Service, the Natural Resources Conservation Service, and other agencies-have improved the forage quality and productivity of grazing lands. A second reason is

Table 1.1.1-Major uses of land, United States, 1992

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Land use1

48 United States States

Million acres


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Land-Use Choice: Theory and Practice

In theory, land-use choice is straightforward: Land is devoted to the use that provides the greatest value to its owner, as measured by the present value of the stream of returns expected in future years. In reality, land-use choice often involves a complex interaction of factors, including the characteristics of the land, the landowner, and the economic and policy contexts in which the choice is made.

Complexity arises in part because land is a highly differentiated economic resource. The location of land-as measured by proximity to the city center, transportation links, or recreational and aesthetic amenities—is a key determinant of its value for residential or commercial development. Productivity, erodibility, and topography largely determine future returns to crop production, pasture, and forestry. Moreover, land may simultaneously pose characteristics that are favorable to and detract from its value for a particular use, creating tradeoffs in land-use decisions. For example, highly productive land may also be highly erodible. Using such land for crops will result in high yields, but may also mean high erosion control costs or, if erosion is unchecked, loss of future productivity. Finally, technological change may ameliorate land-related limitations to specific uses. One example is the development of rolling land for irrigated crop production following the introduction of center-pivot irrigation technology.

Exactly how these factors are assessed depends on the inclinations, circumstances, and economic expectations of individual landowners. For example, landowners who are optimistic about future returns to crop production will use more land for crops than those who are pessimistic. Other factors that affect land-use choices include management skills; discount of future income (where initial land conversion costs are high or for land uses where returns are delayed, e.g. forestry); risk aversion; and the age, occupation, or residence of the landowners.

Landowner expectations and actions are affected by government policies and programs. Federal farm commodity programs have long been suspected of encouraging crop production on marginally productive or environmentally sensitive land. Under the Sodbuster and Swampbuster provisions of the 1985 Farm Bill, payments are now withheld from farmers who crop highly erodible land without an approved conservation plan or who drain wetlands. Zoning rules and land taxation may be important in urban fringe areas where rural land is being rapidly developed for residential or commercial purposes. For example, a jurisdiction seeking to retain open space may zone land for agricultural purposes or provide "use value" taxation to landowners who use land for agriculture.

that the number of domestic animals, particularly sheep and draft animals, has been declining in recent years.

Forest-use land, the second largest area among major uses, declined from about 32 percent of total land in 1945 to less than 30 percent in 1992. All land with a forest cover comprises an even larger area-nearly 606 million acres (32 percent) in 1992. However, much forested land is in special uses (parks, wilderness areas, and wildlife areas) that prohibits forestry uses such as timber production. These areas increased from 22 million acres in 1945 to 89 million acres in 1992. As a result, land defined as forest-use declined consistently from the 1960's to 1987, while special uses increased rapidly (table 1.1.2). There was a slight increase in forest-use land from 1987 to 1992, primarily in commercial timberland.

Cropland comprises the third largest use of land (24 percent in 1992) (table 1.1.1). Total cropland in the contiguous States varied about 8 percent between 1945 and 1992-ranging from 478 million acres in

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Table 1.1.2-Major uses of land in the contiguous 48 States, 1945-92
Land use1

1945 1949 1954 1959 1964 1969 1974 1978 1982

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93.4 84.0 80.5 78.9 63.0 78.4 90.6 91.9 88.5 93.9


Miscellaneous other land

Total land, 48 States2,3

1,905.4 1,903.8 1,903.8 1,901.8 1,899.6 1,897.0 1,897.0 1,897.0 1,895.7 1,895.7 1,894.1

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