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Does crop rotation with legumes provide an efficient means to reduce nutrient loads and GHG emissions?

Author

Listed:
  • Sanna Lötjönen

    (Department of Economics and Management, University of Helsinki, P.O. Box 27,FI-00014 Helsinki, Finland)

  • Markku Ollikainen

    (Department of Economics and Management, University of Helsinki, P.O. Box 27,FI-00014 Helsinki, Finland)

Abstract

We investigate crop rotation with legumes from economic and envi-ronmental perspectives by asking how effective they are at providing profitsand reducing nutrient runoff and greenhouse gas emissions compared withmonoculture cultivation. We study this effectiveness in three alternative policyregimes: the free market optimum, the Finnish agri-environmental scheme, andsocially optimal cultivation, and also design policy instruments to achieve thesocially optimal outcomes in land use and fertilization. We first develop ananalytical model to describe crop rotation and the role of legumes, and examineits implications for water and climate policies. Drawing on Finnish agriculturaldata, we then use numerical simulations and show that shifting from monocul-ture cultivation to crop rotation with legumes provides economically and envi-ronmentally better outcomes. Crop rotation with legumes also reduces thevariability in profits caused by stochastic weather. The optimal instrumentsimplementing the social optimum depend on nutrient and climate damage(nitrogen tax), as well as carbon sequestration and nutrient reduction benefits(buffer strip subsidy).

Suggested Citation

  • Sanna Lötjönen & Markku Ollikainen, 2017. "Does crop rotation with legumes provide an efficient means to reduce nutrient loads and GHG emissions?," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 98(4), pages 283-312.
    • Handle: RePEc:rae:jouraf:v:98:y:2017:i:4:p:283-312
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    File URL: https://link.springer.com/content/pdf/10.1007%2Fs41130-018-0063-z.pdf
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    References listed on IDEAS

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    1. Kenneth J. Arrow & Robert C. Lind, 1974. "Uncertainty and the Evaluation of Public Investment Decisions," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 3, pages 54-75, Palgrave Macmillan.
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    Cited by:

    1. Julia Jouan & Aude Ridier & Matthieu Carof, 2019. "Economic Drivers of Legume Production: Approached via Opportunity Costs and Transaction Costs," Sustainability, MDPI, vol. 11(3), pages 1-14, January.
    2. Sanna Lötjönen & Esa Temmes & Markku Ollikainen, 2020. "Dairy Farm Management when Nutrient Runoff and Climate Emissions Count," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 960-981, May.

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