Determination of Soil Conservation Effects on Shadow Price of Soil Quality in Dry-Farmed Wheat in Iran (A Case Study)

Abstract

This study attempts to measure the effects of soil conservation practices on soil quality in dry-farmed wheat in Iran (Zanjan province) using a bio-economic production function. Because of the nature of data (panel data) and information used in this study, error components approach (REM method) was used for estimating the production functions. The results indicate that the shadow price increases with soil depth and its magnitude is greater 72% in average--in conserved soils compared to non-conserved ones. In fact the results support the effectiveness of soil conservation in improving physical, chemical and biochemical properties of soil which contributes to sustainable agriculture. Finally, soil conservation benefits were estimated to be about 29.98 dollar pre hectare. That may be use for extension, payment of green subsidy, investment and adoption of new technologies for soil conservation. In this way, it will increase the real value of farm and farmer's welfare.