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Do Increased Commodity Prices Lead To More Or Less Soil Degradation?

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Author Info
Lafrance, Jeffrey T.

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Abstract

In this paper, a dynamic economic model is used to analyze the conflicting impacts of crop increasing/land degrading inputs with those of soil conserving/crop reducing inputs in problems of soil degradation in agriculture. Soil is a renewable resource that is generated naturally at a slow, essentially autonomous rate. Cultivation enhances crop production and degrades the soil, while conservation is unproductive for the crop but improves the soil resource. If the effects of cultivation dominate the effects of conservation in the soil dynamics, an increase in the price of the crop accelerates the rate of soil degradation In the short-run and decreases the long-run stock of the soil resource. On the other hand, if the effects of conservation dominate the effects of cultivation, an increase in the price of the crop decelerates the rate of soil degradation in the short run and increases the long-run stock of the soil resource. It is shown that subsidies on conservation activities or taxes on cultivation intensity may well decrease the long-run soil stock, although strong conditions must be satisfied for either of these results to hold. It also is shown that a reduction in the real discount rate or a direct per unit tax on soil losses is certain to increase the long-run soil stock and reduce the short-run rate of soil degradation.

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Publisher Info
Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.

Volume (Year): 36 (1992)
Issue (Month): 01 (April)
Pages:
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Handle: RePEc:ags:ajaeau:22478

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Keywords: Land Economics/Use;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kamien, Morton I. & Schwartz, Nancy L., 1971. "Sufficient conditions in optimal control theory," Journal of Economic Theory, Elsevier, vol. 3(2), pages 207-214, June. [Downloadable!] (restricted)
  2. Hartl, Richard F., 1987. "A simple proof of the monotonicity of the state trajectories in autonomous control problems," Journal of Economic Theory, Elsevier, vol. 41(1), pages 211-215, February. [Downloadable!] (restricted)
  3. Moore, Walter B. & McCarl, Bruce A., 1987. "Off-Site Costs Of Soil Erosion: A Case Study In The Willamette Valley," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(01), July. [Downloadable!]
  4. Caputo, Michael R., 1990. "How to do comparative dynamics on the back of an envelope in optimal control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 655-683, October. [Downloadable!] (restricted)
  5. Araujo, A & Scheinkman, Jose A, 1977. "Smoothness, Comparative Dynamics, and the Turnpike Property," Econometrica, Econometric Society, vol. 45(3), pages 601-20, April. [Downloadable!] (restricted)
  6. Askari, Hossein & Cummings, John Thomas, 1977. "Estimating Agricultural Supply Response with the Nerlove Model: A Survey," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 257-92, June. [Downloadable!] (restricted)
  7. Caputo, Michael R, 1990. "Comparative Dynamics via Envelope Methods in Variational Calculus," Review of Economic Studies, Blackwell Publishing, vol. 57(4), pages 689-97, October. [Downloadable!] (restricted)
  8. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April. [Downloadable!] (restricted)
  9. McLaren, Keith R & Cooper, Russel J, 1980. "Intertemporal Duality: Application to the Theory of the Firm," Econometrica, Econometric Society, vol. 48(7), pages 1755-62, November. [Downloadable!] (restricted)
  10. Oniki, Hajime, 1973. "Comparative dynamics (sensitivity analysis) in optimal control theory," Journal of Economic Theory, Elsevier, vol. 6(3), pages 265-283, June. [Downloadable!] (restricted)
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  1. Pender, John & Jagger, Pamela & Nkonya, Ephraim & Sserunkuuma, Dick, 2002. "Development Pathways And Land Management In Uganda: Causes And Implications," 2002 Annual meeting, July 28-31, Long Beach, CA 19814, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
  2. Pender, John L. & Scherr, Sara J. & Durón, Guadalupe, 1999. "Pathways of development in the hillsides of Honduras: causes and implications for agricultural production, poverty, and sustainable resource use," EPTD discussion papers 45, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Ananda, Jayanath & Herath, Gamini, 2001. "Price and Subsidy Policy on Soil Conservation: Application to Smallholder Tea Growers," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 31(2), pages 99-110, September. [Downloadable!]
  4. Bond, Craig A. & Farzin, Y. Hossein, 2004. "A Portfolio Of Nutrients: Soil And Sustainability," 2004 Annual meeting, August 1-4, Denver, CO 20035, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  5. Oueslati, Walid, 2005. "Optimal Soil Management and Environmental Policy," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24533, European Association of Agricultural Economists. [Downloadable!]
  6. Deal, John, 2004. "Crop Insurance, Government Agricultural Policies, And Soil Erosion," 2004 Annual meeting, August 1-4, Denver, CO 20159, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  7. Ian A. COXHEAD, 1995. "Economic Modeling Of Land Degradation In Developing Countries," Staff Papers 385, University of Wisconsin Madison, AAE, revised May 1996. [Downloadable!]
  8. LAFFORGUE Gilles & OUESLATI Walid, 2006. "Optimal Soil Management and Environmental Policy," Working Papers 06.15.208, LERNA, University of Toulouse. [Downloadable!]
  9. Nkonya, Ephraim & Barkley, Andrew & Hamilton, Steve & Bernardo, Daniel, 1999. "Environmental And Economic Impacts Of Soil Erosion And Fertility Mining In Northern Tanzania," 1999 Annual meeting, August 8-11, Nashville, TN 21623, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  10. Ian A. Coxhead, 1995. "Economic Modeling of Land Degradation in Developing Countries," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 385, Wisconsin-Madison Agricultural and Applied Economics Department. [Downloadable!]
  11. Stefano Pagiola, 1996. "Price policy and returns to soil conservation in semi-arid Kenya," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 8(3), pages 225-271, October. [Downloadable!] (restricted)
  12. Gilles Lafforgue & Walid Oueslati, 2007. "Optimal soil management and environmental policy," Economics Bulletin, Economics Bulletin, vol. 17(3), pages 1-10. [Downloadable!]
  13. Templeton, Scott R. & Scherr, Sara J., 1997. "Population pressure and the microeconomy of land management in hills and mountains of developing countries:," EPTD discussion papers 26, International Food Policy Research Institute (IFPRI). [Downloadable!]
  14. Herath Gunatileke & Ujjayant Chakravorty, 2003. "Protecting Forests Through Farming. A Dynamic Model of Nontimber Forest Extraction," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(1), pages 1-26, January. [Downloadable!] (restricted)
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