IDEAS home Printed from https://ideas.repec.org/p/drm/wpaper/2021-10.html
   My bibliography  Save this paper

European farmers’ responses to higher commodity prices: cropland expansion or forestlands preservation?

Author

Listed:
  • Chouaib Jouf
  • Laté Lawson

Abstract

This paper analyses the impact of European farmers’ responsiveness to changes in agri-commodities prices on their trade-off between agricultural expansion and forestland preservation. We investigate this issue by estimating a recursive model using a comprehensive dataset of European agricultural holdings over the period 2008-2017, covering 128 regions (26 countries). Our main finding is that there is indeed evidence of such a trade-off. An increase in commodity prices leads to higher cropland profitability, which in turn causes deforestation in the 128 European regions considered. Replicating the analysis on different subsamples confirms the robustness of these findings.

Suggested Citation

  • Chouaib Jouf & Laté Lawson, 2021. "European farmers’ responses to higher commodity prices: cropland expansion or forestlands preservation?," EconomiX Working Papers 2021-10, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2021-10
    as

    Download full text from publisher

    File URL: https://www.economix.fr/pdf/dt/2021/WP_EcoX_2021-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Douglas J. Miller & Andrew J. Plantinga, 1999. "Modeling Land Use Decisions with Aggregate Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 180-194.
    2. Kanlaya J. Barr & Bruce A. Babcock & Miguel A. Carriquiry & Andre M. Nassar & Leila Harfuch, 2011. "Agricultural Land Elasticities in the United States and Brazil," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 449-462.
    3. Qiang Liu & Hongwei Xu & Xingmin Mu & Guangju Zhao & Peng Gao & Wenyi Sun, 2020. "Effects of Different Fertilization Regimes on Crop Yield and Soil Water Use Efficiency of Millet and Soybean," Sustainability, MDPI, vol. 12(10), pages 1-13, May.
    4. Blanco, Julien & Sourdril, Anne & Deconchat, Marc & Barnaud, Cécile & San Cristobal, Magali & Andrieu, Emilie, 2020. "How farmers feel about trees: Perceptions of ecosystem services and disservices associated with rural forests in southwestern France," Ecosystem Services, Elsevier, vol. 42(C).
    5. Roman Keeney & Thomas W. Hertel, 2009. "The Indirect Land Use Impacts of United States Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 895-909.
    6. Gallagher, Paul W. & Houck, James P., 1976. "The Price Responsiveness of U.S. Corn Yields," Staff General Research Papers Archive 12563, Iowa State University, Department of Economics.
    7. von Amsberg, Joachim, 1998. "Economic Parameters of Deforestation," The World Bank Economic Review, World Bank, vol. 12(1), pages 133-153, January.
    8. Yongyut Trisurat & Hiroaki Shirakawa & John M. Johnston, 2019. "Land-Use/Land-Cover Change from Socio-Economic Drivers and Their Impact on Biodiversity in Nan Province, Thailand," Sustainability, MDPI, vol. 11(3), pages 1-22, January.
    9. Paswel P. Marenya & Christopher B. Barrett, 2009. "State-conditional Fertilizer Yield Response on Western Kenyan Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 991-1006.
    10. Hertel, Thomas, 2012. "Implications of Agricultural Productivity for Global Cropland Use and GHG Emissions: Borlaug vs. Jevons," GTAP Working Papers 4020, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    11. Williamson, James M., 2011. "The Role of Information and Prices in the Nitrogen Fertilizer Management Decision: New Evidence from the Agricultural Resource Management Survey," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-21.
    12. James P. Houck & Paul W. Gallagher, 1976. "The Price Responsiveness of U.S. Corn Yields," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(4_Part_1), pages 731-734.
    13. Marian Rizov & Jan Pokrivcak & Pavel Ciaian, 2013. "CAP Subsidies and Productivity of the EU Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 537-557, September.
    14. Oliveira, Eduardo & Leuthard, Jasmin & Tobias, Silvia, 2019. "Spatial planning instruments for cropland protection in Western European countries," Land Use Policy, Elsevier, vol. 87(C).
    15. Kuemmerle, Tobias & Levers, Christian & Erb, Karlheinz & Estel, Stephan & Jepsen, Martin R & Müller, Daniel & Plutzar, Christoph & Stürck, Julia & Verkerk, Pieter J & Verburg, Peter H & Reenberg, Anet, 2016. "Hotspots of land use change in Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11(6), pages 1-14.
    16. Enjolras, Geoffroy & Capitanio, Fabian & Aubert, Magali & Adinolfi, Felice, 2012. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122478, European Association of Agricultural Economists.
    17. Ruiqing Miao & Madhu Khanna & Haixiao Huang, 2016. "Responsiveness of Crop Yield and Acreage to Prices and Climate," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 191-211.
    18. William Lin & Robert Dismukes, 2007. "Supply Response under Risk: Implications for Counter-Cyclical Payments' Production Impact," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 64-86.
    19. Richards, Peter D., 2012. "Exchange Rates, Soybean Supply Response, and Deforestation in South America," Graduate Research Master's Degree Plan B Papers 138606, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    20. Hasan DUDU & Zuzana Smeets Kristkova, 2017. "Impact of CAP Pillar II Payments on Agricultural Productivity," JRC Research Reports JRC106591, Joint Research Centre.
    21. Choi, Jung-Sup & Helmberger, Peter G., 1993. "How Sensitive Are Crop Yields To Price Changes And Farm Programs?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 25(1), pages 1-8, July.
    22. 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 257-292, June.
    23. Rao, J. Mohan, 1989. "Agricultural supply response: A survey," Agricultural Economics, Blackwell, vol. 3(1), pages 1-22, March.
    24. Baltagi, Badi H. & Heun Song, Seuck & Cheol Jung, Byoung & Koh, Won, 2007. "Testing for serial correlation, spatial autocorrelation and random effects using panel data," Journal of Econometrics, Elsevier, vol. 140(1), pages 5-51, September.
    25. Indarto, Jarot & Mutaqin, Dadang J., 2016. "An overview of theoretical and empirical studies on deforestation," MPRA Paper 70178, University Library of Munich, Germany.
    26. Angelsen, Arild, 2007. "Forest cover change in space and time : combining the von Thunen and forest transition theories," Policy Research Working Paper Series 4117, The World Bank.
    27. Barr, Kanlaya Jintanakul, 2011. "Agricultural Land Elasticities in the United States and Brazil," Staff General Research Papers Archive 34893, Iowa State University, Department of Economics.
    28. von Amsberg, Joachim & DEC, 1994. "Economic parameters of deforestation," Policy Research Working Paper Series 1350, The World Bank.
    29. J. Mohan Rao, 1989. "Agricultural Supply Response: A Survey," Agricultural Economics, International Association of Agricultural Economists, vol. 3(1), pages 1-22, March.
    30. Choi, Jung-Sup & Helmberger, Peter G., 1993. "How Sensitive are Crop Yields to Price Changes and Farm Programs?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 25(1), pages 237-244, July.
    31. Votsis, Athanasios, 2017. "Planning for green infrastructure: The spatial effects of parks, forests, and fields on Helsinki's apartment prices," Ecological Economics, Elsevier, vol. 132(C), pages 279-289.
    32. Angelsen, Arild, 1999. "Agricultural expansion and deforestation: modelling the impact of population, market forces and property rights," Journal of Development Economics, Elsevier, vol. 58(1), pages 185-218, February.
    33. Miller, Douglas & Plantinga, Andrew J., 1999. "Modeling Land Use Decisions with Aggregate Data," Staff General Research Papers Archive 1487, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jouf, C. & Lawson, L.A., 2022. "European farmers’ responses to higher commodity prices: Cropland expansion or forestlands preservation?," Ecological Economics, Elsevier, vol. 191(C).
    2. Gouel, Christophe & Laborde, David, 2021. "The crucial role of domestic and international market-mediated adaptation to climate change," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    3. Md Zabid Iqbal & Bruce A. Babcock, 2018. "Global growing‐area elasticities of key agricultural crops estimated using dynamic heterogeneous panel methods," Agricultural Economics, International Association of Agricultural Economists, vol. 49(6), pages 681-690, November.
    4. Boussios, David & Barkley, Andrew P., 2012. "Kansas Grain Supply Response to Economic and Biophysical Factors, 1977-2007," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124385, Agricultural and Applied Economics Association.
    5. Magrini, Emiliano & Morales-Opazo, Cristian & Balie, Jean, 2014. "Supply response along the value chain in selected SSA countries: the case of grains," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197193, International Agricultural Trade Research Consortium.
    6. Boussios, David & Barkley, Andrew, 2014. "Producer Expectations and the Extensive Margin in Grain Supply Response," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(3), pages 335-356, December.
    7. Carriquiry, Miguel & Elobeid, Amani & Goodrich, Ryan, 2016. "Comparing the trends and strength of determinants to deforestation in the Brazilian Amazon in consideration of biofuel policies in Brazil and the United States," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235888, Agricultural and Applied Economics Association.
    8. Gouel, Christophe & LaBorde, David, 2017. "The Crucial Role of International Trade in Adaptation to Climate Change," 2017: Globalization Adrift, December 3-5, 2017, Washington, D.C. 266841, International Agricultural Trade Research Consortium.
    9. Weng, Weizhe & Cobourn, Kelly M. & Kemanian, Armen R. & Boyle, Kevin J. & Shi, Yuning & Stachelek, Joseph & White, Charles, 2020. "Quantifying Co-Benefits of Water Quality Policies: An Integrated Assessment Model of Nitrogen Management," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304667, Agricultural and Applied Economics Association.
    10. Keeney, Roman & Hertel, Thomas W., 2008. "Yield Response To Prices: Implications For Policy Modeling," Working papers 45969, Purdue University, Department of Agricultural Economics.
    11. Roman Keeney & Thomas W. Hertel, 2008. "U.S. Market Potential For Dried Distillers Grain With Solubles," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.
    12. Magrini, Emiliano & Balié, Jean & Morales Opazo, Cristian, 2016. "Price signals and supply responses for staple food crops in SSA countries," DARE Discussion Papers 1601, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    13. Miguel Carriquiry & Amani Elobeid & Jerome Dumortier & Ryan Goodrich, 2020. "Incorporating Sub‐National Brazilian Agricultural Production and Land‐Use into U.S. Biofuel Policy Evaluation," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 497-523, September.
    14. Nelson B. Villoria & Derek Byerlee & James Stevenson, 2014. "The Effects of Agricultural Technological Progress on Deforestation: What Do We Really Know?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(2), pages 211-237.
    15. Hyunseok Kim & GianCarlo Moschini, 2018. "The Dynamics of Supply: U.S. Corn and Soybeans in the Biofuel Era," Land Economics, University of Wisconsin Press, vol. 94(4), pages 593-613.
    16. Amalavoyal Chari & Elaine M Liu & Shing-Yi Wang & Yongxiang Wang, 2021. "Property Rights, Land Misallocation, and Agricultural Efficiency in China [Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 1831-1862.
    17. Ortega-Pacheco, Daniel V. & Keeler, Andrew G. & Jiang, Shiguo, 2019. "Climate change mitigation policy in Ecuador: Effects of land-use competition and transaction costs," Land Use Policy, Elsevier, vol. 81(C), pages 302-310.
    18. Donato, Romano & Carraro, Alessandro, 2015. "Modelling Acreage, Production and Yield Supply Response to Domestic Price Volatility," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207278, Italian Association of Agricultural and Applied Economics (AIEAA).
    19. Lunyu Xie & Sarah M. Lewis & Maximilian Auffhammer & Peter Berck, 2019. "Heat in the Heartland: Crop Yield and Coverage Response to Climate Change Along the Mississippi River," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 485-513, June.
    20. Hildegart Ahumada & Magdalena Cornejo, 2021. "Are Soybean Yields Getting a Free Ride from Climate Change? Evidence from Argentine Time Series Data," Econometrics, MDPI, vol. 9(2), pages 1-14, June.

    More about this item

    Keywords

    Agricultural commodities prices; Land-use; Cropland; Woodland.;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2021-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerie Mignon (email available below). General contact details of provider: https://edirc.repec.org/data/modemfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.