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The distribution of returns from land efficiency improvement in multistage production systems

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  • Lana Awada
  • Peter W. B. Phillips

Abstract

This paper assesses the distributional consequences of technical changes that improve the efficiency of land and of other inputs in a multifactor crop‐production system. We introduced an equilibrium displacement model (EDM) by using the specification of a factor‐augmenting approach. Given the uncertainty about the EDM parameters, a Monte Carlo simulation is used to produce a distribution of possible return measures. We found that land suppliers (likely farmers) receive a larger share (73%) of total benefits from the adoption of land‐technical change than they do from the adoption of other input technologies. Each input supplier receives a larger share of total benefits from technical change in her own input. However, this result is sensitive to the value of the parameters, especially the value of the elasticity of substitution. We applied the EDM to the case of no‐tillage (NT) to provide insight into how the aggregate return from the adoption of NT was distributed among different groups on the Canadian Prairies. The results of this study can be used by policymakers and funding agencies in order to influence landowners and farming communities to adopt environmentally sound land technologies to achieve both greater agricultural productivity and sustainability. Cet article évalue les conséquences distributives des changements techniques qui améliorent l'efficacité des terres et des autres intrants dans un système de production agricole multifactoriel. Nous avons introduit un modèle de déplacement à l'équilibre (MDE) en utilisant la spécification d'une approche d'augmentation des facteurs. Compte tenu de l'incertitude sur les paramètres MDE, une simulation de Monte Carlo est utilisée pour produire une distribution des mesures de retour possibles. Nous avons constaté que les fournisseurs de terres (probablement les agriculteurs) reçoivent une plus grande part (73%) des avantages totaux de l'adoption du changement technique foncier que de l'adoption d'autres technologies d'intrants. Chaque fournisseur d'intrants reçoit une part plus importante des avantages totaux du changement technique dans son propre intrant. Cependant, ce résultat est sensible à la valeur des paramètres, notamment la valeur de l'élasticité de substitution. Nous avons appliqué le MDE au cas du travail minimal du sol (TMS) pour donner un aperçu de la façon dont le rendement global de l'adoption du TMS était réparti entre différents groupes dans les Prairies canadiennes. Les résultats de cette étude peuvent être utilisés par les décideurs politiques et les agences de financement afin d'inciter les propriétaires fonciers et les communautés agricoles à adopter des technologies foncières respectueuses de l'environnement pour atteindre à la fois une plus grande productivité agricole et une plus grande durabilité.

Suggested Citation

  • Lana Awada & Peter W. B. Phillips, 2021. "The distribution of returns from land efficiency improvement in multistage production systems," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(1), pages 73-92, March.
    • Handle: RePEc:bla:canjag:v:69:y:2021:i:1:p:73-92
    DOI: 10.1111/cjag.12260
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