2. View the waste as a resource. This approach focuses
on finding the (best) option that maximizes
the net benefits.
Whichever approach is adopted, the results (i.e.,
ranking of options) are the same, as one set of results
is only a “miror image” of the other. A benefit is the
same as a negative cost (i.e., a cost offset), and a cost
is the same as a negative benefit. The second approach
is the one adopted in this study i.e., all the
evaluations are conducted in terms of net benefits.
The net benefits of the options in pig waste management
are analysed from a socio-economic costbenefit
analysis (CBA) perspective, and a private
financial analysis perspective. CBA is a tool that
will help pig farmers make better informed decisions
about their resource allocations. By measuring and
comparing the costs and consequences of various
interventions, relative efficiencies can be assessed
and future budget requirements estimated. Efficiency
is defined as achieving a specific goal at the highest
net benefit. A CBA is undertaken for each alternative
and the results are presented as net present values
(NPVs). The alternative that has the highest net
benefit is the most efficient and preferred. There are
some important differences between the economic
and financial analyses of the options. These are discussed
below in the context of the present study.
An economic analysis is conducted from the perspective
of the community as a whole. It focuses on
“real” resource costs and benefits, including any
“external” environmental costs and benefits that
affect the broader community. Loan repayments
and/or subsidies are not part of a socio-economic
assessment. Only real resource costs, incurred at the
time of their utilisation, count in a socio-economic
analysis. The farmers are members of the community
and the costs and benefits they face will necessarily
be a major component of the social costs and benefits
of the whole community. But farmers do not incur
the costs and benefits of externalities of pig waste
disposal. Their welfare depends mainly on their aftertax
financial returns. This means that their welfare
has to be assessed using financial evaluation
techniques. The external costs caused by unpleasant
odours and other pollutants associated with the different
waste management options are, however, taken
into account in an economic analysis. Part of such
costs can be measured in terms of property value
differentials. Properties affected by offensive odours
and pollution will tend to have lower values than
those in a non-polluted environment. The differentials
in property values (i.e., the extent to which
property values are lower because of pollution) provide
an estimate of the damage cost.
2. View the waste as a resource. This approach focuses
on finding the (best) option that maximizes
the net benefits.
Whichever approach is adopted, the results (i.e.,
ranking of options) are the same, as one set of results
is only a “miror image” of the other. A benefit is the
same as a negative cost (i.e., a cost offset), and a cost
is the same as a negative benefit. The second approach
is the one adopted in this study i.e., all the
evaluations are conducted in terms of net benefits.
The net benefits of the options in pig waste management
are analysed from a socio-economic costbenefit
analysis (CBA) perspective, and a private
financial analysis perspective. CBA is a tool that
will help pig farmers make better informed decisions
about their resource allocations. By measuring and
comparing the costs and consequences of various
interventions, relative efficiencies can be assessed
and future budget requirements estimated. Efficiency
is defined as achieving a specific goal at the highest
net benefit. A CBA is undertaken for each alternative
and the results are presented as net present values
(NPVs). The alternative that has the highest net
benefit is the most efficient and preferred. There are
some important differences between the economic
and financial analyses of the options. These are discussed
below in the context of the present study.
An economic analysis is conducted from the perspective
of the community as a whole. It focuses on
“real” resource costs and benefits, including any
“external” environmental costs and benefits that
affect the broader community. Loan repayments
and/or subsidies are not part of a socio-economic
assessment. Only real resource costs, incurred at the
time of their utilisation, count in a socio-economic
analysis. The farmers are members of the community
and the costs and benefits they face will necessarily
be a major component of the social costs and benefits
of the whole community. But farmers do not incur
the costs and benefits of externalities of pig waste
disposal. Their welfare depends mainly on their aftertax
financial returns. This means that their welfare
has to be assessed using financial evaluation
techniques. The external costs caused by unpleasant
odours and other pollutants associated with the different
waste management options are, however, taken
into account in an economic analysis. Part of such
costs can be measured in terms of property value
differentials. Properties affected by offensive odours
and pollution will tend to have lower values than
those in a non-polluted environment. The differentials
in property values (i.e., the extent to which
property values are lower because of pollution) provide
an estimate of the damage cost.
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2. View the waste as a resource. This approach focuses
on finding the (best) option that maximizes
the net benefits.
Whichever approach is adopted, the results (i.e.,
ranking of options) are the same, as one set of results
is only a “miror image” of the other. A benefit is the
same as a negative cost (i.e., a cost offset), and a cost
is the same as a negative benefit. The second approach
is the one adopted in this study i.e., all the
evaluations are conducted in terms of net benefits.
The net benefits of the options in pig waste management
are analysed from a socio-economic costbenefit
analysis (CBA) perspective, and a private
financial analysis perspective. CBA is a tool that
will help pig farmers make better informed decisions
about their resource allocations. By measuring and
comparing the costs and consequences of various
interventions, relative efficiencies can be assessed
and future budget requirements estimated. Efficiency
is defined as achieving a specific goal at the highest
net benefit. A CBA is undertaken for each alternative
and the results are presented as net present values
(NPVs). The alternative that has the highest net
benefit is the most efficient and preferred. There are
some important differences between the economic
and financial analyses of the options. These are discussed
below in the context of the present study.
An economic analysis is conducted from the perspective
of the community as a whole. It focuses on
“real” resource costs and benefits, including any
“external” environmental costs and benefits that
affect the broader community. Loan repayments
and/or subsidies are not part of a socio-economic
assessment. Only real resource costs, incurred at the
time of their utilisation, count in a socio-economic
analysis. The farmers are members of the community
and the costs and benefits they face will necessarily
be a major component of the social costs and benefits
of the whole community. But farmers do not incur
the costs and benefits of externalities of pig waste
disposal. Their welfare depends mainly on their aftertax
financial returns. This means that their welfare
has to be assessed using financial evaluation
techniques. The external costs caused by unpleasant
odours and other pollutants associated with the different
waste management options are, however, taken
into account in an economic analysis. Part of such
costs can be measured in terms of property value
differentials. Properties affected by offensive odours
and pollution will tend to have lower values than
those in a non-polluted environment. The differentials
in property values (i.e., the extent to which
property values are lower because of pollution) provide
an estimate of the damage cost.
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