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Agricultural Productivity and Soil Carbon Dynamics: A Bioeconomic Model

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  • Julia Berazneva
  • Jon M Conrad
  • David T Güereña
  • Johannes Lehmann
  • Dominic Woolf

Abstract

We examine the dynamic management of a soil resource—the issue at the core of both environmental and development challenges in developing countries. Our theoretical framework extends the traditional bioeconomic model of renewable resources to soil carbon management and investigates the effects of changes in agricultural practices on farmers’ natural resource base and livelihoods. We parameterize the model using an eight-year panel data set from an agronomic experiment and data from household and market surveys in the western Kenyan highlands. The optimal maize yields and soil carbon stocks are higher than those observed in the region. This divergence is partly explained by farmers’ heterogeneous time preferences (with the implied discount rates of 5% to 25%), information barriers, and market imperfections. The steady-state shadow price for soil carbon ranges from $95/Mg to $168/Mg, indicating a significant opportunity cost for soil mismanagement.

Suggested Citation

  • Julia Berazneva & Jon M Conrad & David T Güereña & Johannes Lehmann & Dominic Woolf, 2019. "Agricultural Productivity and Soil Carbon Dynamics: A Bioeconomic Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 1021-1046.
    • Handle: RePEc:oup:ajagec:v:101:y:2019:i:4:p:1021-1046.
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    File URL: http://hdl.handle.net/10.1093/ajae/aaz014
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    Cited by:

    1. Cheu, Sungmin & Gammans, Matthew, 2023. "The Effect of Ethanol Capacity on Cover Crop Use in the Midwest," 2023 Annual Meeting, July 23-25, Washington D.C. 335819, Agricultural and Applied Economics Association.
    2. Carmen Camacho & Alexandre Cornet, 2021. "Diffusion of soil pollution in an agricultural economy. The emergence of regions, frontiers and spatial patterns," Working Papers halshs-02652191, HAL.
    3. Stefan Seifert & Christoph Kahle & Silke Hüttel, 2021. "Price Dispersion in Farmland Markets: What Is the Role of Asymmetric Information?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1545-1568, August.
    4. Pierre D. Ouattara & Eugene Kouassi & Aklesso Y. G. Egbendewe & Oluyele Akinkugbe, 2018. "Climate Uncertainty And Agricultural Soil Conservation Investment Decisions," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-23, May.
    5. Olson, David W. & Mason, Nicole M., 2017. "Maize Marketing Boards and Sustainable Intensification: Panel Survey Evidence from Kenya," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258093, Agricultural and Applied Economics Association.
    6. Amadu, Festus O. & McNamara, Paul E. & Davis, Kristin E., 2021. "Soil health and grain yield impacts of climate resilient agriculture projects: Evidence from southern Malawi," Agricultural Systems, Elsevier, vol. 193(C).
    7. Tolulope E. Oladimeji & Oyakhilomen Oyinbo & Abubakar A. Hassan & Oseni Yusuf, 2020. "Understanding the Interdependence and Temporal Dynamics of Smallholders’ Adoption of Soil Conservation Practices: Evidence from Nigeria," Sustainability, MDPI, vol. 12(7), pages 1-21, March.
    8. Sihvonen, Matti & Pihlainen, Sampo & Lai, Tin-Yu & Salo, Tapio & Hyytiäinen, Kari, 2021. "Crop production, water pollution, or climate change mitigation—Which drives socially optimal fertilization management most?," Agricultural Systems, Elsevier, vol. 186(C).
    9. Berazneva, Julia & Maertens, Annemie & Mhango, Wezi & Michelson, Hope, 2023. "Paying for agricultural information in Malawi: The role of soil heterogeneity," Journal of Development Economics, Elsevier, vol. 165(C).
    10. Berazneva, Julia & Woolf, Dominic & Lee, David R., 2021. "Local lignocellulosic biofuel and biochar co-production in Sub-Saharan Africa: The role of feedstock provision in economic viability," Energy Economics, Elsevier, vol. 93(C).
    11. Rattan Lal, 2015. "Restoring Soil Quality to Mitigate Soil Degradation," Sustainability, MDPI, vol. 7(5), pages 1-21, May.
    12. Carmen Camacho & Alexandre Cornet, 2021. "Diffusion of soil pollution in an agricultural economy. The emergence of regions, frontiers and spatial patterns," PSE Working Papers halshs-02652191, HAL.
    13. Murphy, David M. A. & Berazneva, Julia & Lee, David R., 2015. "Fuelwood Source Substitution and Shadow Prices in Western Kenya," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205084, Agricultural and Applied Economics Association.

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