Amber Waves of Grain

EconTalk Extra
by Amy Willis
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Pete Geddes on the American Pr... Tim O'Reilly on Technology and...

If you've started playing a drinking game for every time EconTalk host RussRoberts has said the word "prairie" in recent episodes, this week's conversation with Pete Geddes of the American Prairie Reserve is sure to top your favorites list!

What are your thoughts on this attempt to re-create a prairie? Please respond to the prompts below. As always, we love to hear from you.

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1. The role of incentives in conservation is a dominant theme throughout the conversation, and Geddes notes early on that part of his objective is to "flip" the incentives of the ranchers surrounding the reserve. What do you think of his proposals for doing so? What additional incentive modifications would you suggest?

2. Geddes stresses that the "problem" the American Prairie Reserve is trying to fix is a sociological, not an economic, one. What does he mean by this? How is his organization trying to solve the problem.

3. Long-time listeners have had the opportunity to get to know more and more about Russ Roberts. We know he loves Broadway musicals, baseball, and national parks as emphasized in this week's episode. To what extent do you think Roberts romanticizes such things? Is there a problem with romanticizing as such or is it a good thing?

4. Some might wonder what prairies have to do with economics. But this week's episode contains an elegant example of a classic insight from a great economist and past EconTalk guest. What is that insight and who is that economist?

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COMMENTS (3 to date)
Bill Flemming writes:

The proposals Geddes provides for aligning incentives to ranchers who view wildlife as a cost rather than a benefit are intriguing. He's listening to those who own land and cattle around him. By taking unique and individualized actions in the form of guarantees via contracts a net benefit is created.

As long as consumers are willing to pay the premium Geddes is paying to ranchers, or Geddes is willing to forgo some margin compared to his competitors the model could work.

Would love to hear a follow up on this in a couple years as the story progresses, similar to the original podcast on millennium development goals and follow up last year.

Michael Byrnes writes:

4. I'm guessing there may be more than one correct answer here, but I'll go with Coase on externalities. Specifically, Coase's insight that many externalities are bilateral and may best be addressed through negotiation between the parties. In this case, neighboring farmers build fences to prevent wildlife from coming in and eating their crops, livestock, etc., but those fences prevent wildlife from entering the reserve. This is a two-way externality because allowing wildlife to enter their property presents a risk to the neigboring farmers, but fencing them out would prevent the prarie reserve from achieving its goals. In this particular example, the prarie reserve and some of the neighboring farmers seem to have a reached a negotiated solution.

Adam Long writes:

1. Overall I was quite impressed, in principle, with the idea to provide market based incentives (i.e. offering to pay people money and letting them decide for themselves rather than coercing them with well-intentioned but cumbersome and heavy handed regulations) for acting in ways that would help wildlife thrive.

But I found (and find) myself stuck on a practical question of just how dangerous animals such as wolves and bears are.

I recall Pete Geddes addressing this at two points during the interview. First, in discussing the premium to be paid to ranchers who participate in the program, he said that, in the event a rancher's cow (or, I suppose, cows) were killed by a wild predator then the rancher would NOT be paid any extra for that animal because as far as APR is concerned the rancher has ALREADY been compensated by the premium paid. Second, he mentioned, to my ear off-handedly, that of course you would not want to allow a wolf on your property in the vicinity of your children playing on the back porch (that's not a wholly accurate paraphrase but it's the best that I can remember) As to the first point, well, I suppose the market will decide whether the ranchers feel they are being adequately compensated for lost live stock. But I wonder how much lost live stock we are talking about, and I wonder how the behavior of these predators might change over time as they become accustomed to hunting, e.g. cattle. My sense is that many many decades ago the ranchers of the time killed many (all?) of the wolves and bears because of hard experience with these predators killing lots of their stock. And as to the second question, i.e. predators in the vicinity of humans, I'm not quite following what Geddes was saying. I guess another way to put it is, if Geddes were running a ranch in that area, what steps would he take to ensure that neither he nor his family were in danger. I hasten to add that there may very well be basic precautions that a rancher can take to ensure (1) that wild predators can thrive in his area and pass through his land while (2) that his family is safe. I'm just curious to find out what those steps are.

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