Economic and environmental impacts of introducing land use policies and rotations on Prince Edward Island potato farms

Abstract

A 2002 Prince Edward Island (PEI) Agricultural Crop Rotations (ACR) Act and other sustainable land use policies regulate what crops can be grown in rotation with potatoes, and the frequency and sequence of specific crops in such rotation systems. Given that there are alternative crops that may be rotated with potatoes and managed for various rotation lengths, the policies raise questions about the economic and environmental implications of such land use policies and legislation on PEI potato-based agriculture. A multi-year linear programming model of a representative potato-based PEI farm was developed and then used to investigate the economic and environmental impacts of introducing various crop rotation systems and land use policy regulations specified under the PEI ACR Act. Results suggest that adoption of legislated rotation systems would lead to considerable reduction in gross margins. The extent of such financial losses increased as the frequency of potatoes in the rotations decreased (i.e., farm losses increased with rotation length). Both crop choice and sequence in a rotation influenced magnitude of the economic impacts of the land use and rotation legislation. For example, among 4-year rotations, gross margins for P–SC–B–RG (potato/silage corn/barley/ryegrass) were higher by $79, 955, when potatoes replaced silage corn in SC–SC–B–RG (silage corn/silage corn/barley/ryegrass). In addition, higher potato yields stemming from nutrient carry-over effects of particular crops (e.g., barley compared to spring wheat), did not necessarily translate into higher overall farm returns for the associated rotation. Economic–environmental trade-off frontier analysis suggest that different rotations generated varying levels of reduction in the use of agricultural chemicals, compared to benchmark production systems. However, environmental improvements associated with such reductions in chemical use required substantial reduction in gross margins to producers.