Masters Theses

Date of Award

12-1981

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Luther H. Keller

Committee Members

Mundy, Badenhop

Abstract

The purpose of this study was to determine the cost of construct-ing gradient, parallel, and combinations of gradient-parallel terraces and their associated structures for 12 counties in West Tennessee. West Tennessee was chosen as the study area because of persistent problems of flooding, poor drainage, soil erosion, and sedimentation. Furthermore, relatively high prices for soybeans over the last few years have motivated landowners to convert forest and grassland into row crop production. Primary data were collected relative to the estimated and actual costs of constructing terraces and related structures over a wide range of situations in early 1981. Data were obtained from a question-naire completed by the district conservationist in each of the 12 counties of the study area. The data were categorized and analyzed by cost-benefit analysis. The major findings of the study were that the costs of a terrace system are dependent upon the terrace type and the number of components that make up the system. The land slope, amount of land level-ing required, and soil characteristics all have an effect on total cost. From the farmers point-of-view, terraces are more likely to be Justified by potential yield declines if built upon severely eroded slopes, and with a planning span of at least 20 years. However, the feasibility of a terrace system would also depend upon its initial cost, the long term expectation of crop prices, and the discount rate. The lower the initial cost of the system, and the longer the planning span, the more likely a terrace system can be justified by the poten-tial yield decline. Data indicates that farmers with initial high yields would find it easier to finance a terrace system than those who have low yields. However, those farmers who own high-yielding land would probably not have the projected yield declines necessary to justify terrace systems, particularly the more expensive systems, even over a 20 year period. Expected yield declines high enough to justify terraces are more likely on marginal land, but in this case net returns per acre may be too low to cover the additional cost of terraces. Assuming that the public costs due to soil erosion are greater than or equal to the private costs of constructing and maintaining terraces, subsidies could be used to induce investments in water control structures. Public funds could be targeted in an efficient manner if the cost of saving a ton of soil, and the percent subsidy required, were minimized for specific situations. The results of this study should be interpreted with caution. Tax incentives as well as gains in field efficiency due to the installation of terraces were not considered. In addition, farmers may have non-economic objectives when deciding upon the installation of a terrace system.

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