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Crop biodiversity, risk management and the implications of agricultural assistance

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  • Di Falco, Salvatore
  • Perrings, Charles

Abstract

This paper presents a theoretical and empirical analysis of the impact of financial assistance to farms on crop biodiversity in an uncertain setting. The findings reveal that risk aversion is an important driving force for crop biodiversity conservation. Risk averse farmers can hedge against the uncertainty they face by allocating land to different crop species. However, policies intended to stabilize revenues by supporting particular species may alter this link by delinking crop biodiversity from the management of revenues risk.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 55 (2005)
Issue (Month): 4 (December)
Pages: 459-466

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Handle: RePEc:eee:ecolec:v:55:y:2005:i:4:p:459-466

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  1. Salvatore Di Falco & Charles Perrings, 2003. "Crop Genetic Diversity, Productivity and Stability of Agroecosystems. A Theoretical and Empirical Investigation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 207-216, 05.
  2. Melinda Smale & Jason Hartell & Paul W. Heisey & Ben Senauer, 1998. "The Contribution of Genetic Resources and Diversity to Wheat Production in the Punjab of Pakistan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 482-493.
  3. Hild Rygnestad & Rob Fraser, 1996. "Land Heterogeneity And The Effectiveness Of Cap Set-Aside," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 255-260.
  4. Jeffrey T. LaFrance, 1992. "Do Increased Commodity Prices Lead To More Or Less Soil Degradation?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 36(1), pages 57-82, 04.
  5. E. Meng, M. Smale & Brennan, J.P. & Hu, Ruifa, 2003. "Determinants of spatial diversity in modern wheat: examples from Australia and China," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 28(1), January.
  6. Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521337465.
  7. Brush, Stephen B. & Taylor, J. Edward & Bellon, Mauricio R., 1992. "Technology adoption and biological diversity in Andean potato agriculture," Journal of Development Economics, Elsevier, vol. 39(2), pages 365-387, October.
  8. Derek Byerlee & Edward Souza, 1997. "Wheat Rusts and the Costs of Genetic Diversity in the Punjab of Pakistan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 726-737.
  9. Moschini, GianCarlo & Hennessy, David A., 2001. "Uncertainty, Risk Aversion, and Risk Management for Agricultural Producers," Staff General Research Papers 5323, Iowa State University, Department of Economics.
  10. Smale, M. & Meng, E. & Brennan, J. P. & Hu, Ruifa, 2003. "Determinants of spatial diversity in modern wheat: examples from Australia and China," Agricultural Economics, Blackwell, vol. 28(1), pages 13-26, January.
  11. Grepperud, Sverre, 2000. "Optimal soil depletion with output and price uncertainty," Environment and Development Economics, Cambridge University Press, vol. 5(03), pages 221-240, July.
  12. Grepperud, Sverre, 1997. "Poverty, Land Degradation and Climatic Uncertainty," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 586-608, October.
  13. Smale, Melinda & Bellon, Mauricio R & Aguirre Gomez, Jose Alfonso, 2001. "Maize Diversity, Variety Attributes, and Farmers' Choices in Southeastern Guanajuato, Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 50(1), pages 201-25, October.
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