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Agricultural Land Retirement and Slippage: Lessons from an Australian Case Study

Listed author(s):
  • Iain Fraser
  • Robert Waschik

This paper uses a Computable General Equilibrium (CGE) model to examine the economic implications of agricultural land retirement from wool production for conservation in Australia. Employing an innovative specific-factors characterization of production to generate short-run and long-run results, we show that the potential welfare gains from land retirement can be significant. However, in several scenarios examined we find that slippage in agricultural production is significant, resulting in reduced welfare. Our slippage results provide insights into the relationship between the potential causes of slippage and describe how a land retirement policy can be designed to minimize this effect.

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File URL: http://le.uwpress.org/cgi/reprint/81/2/206
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Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 81 (2005)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:uwp:landec:v:81:y:2005:i:2:p206-226
Contact details of provider: Web page: http://le.uwpress.org/

References listed on IDEAS
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  1. LaFrance, Jeffrey T., 1992. "Do Increased Commodity Prices Lead To More Or Less Soil Degradation?," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(01), April.
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  4. 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.
  5. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  6. Paul Wilson & James Gibbons & Stephen Ramsden, 2003. "The Impact of Cereal Prices and Policy on Crop Rotations and Supply Response," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(2), pages 313-323.
  7. Brian C. Murray & Bruce A. McCarl & Heng-Chi Lee, 2004. "Estimating Leakage from Forest Carbon Sequestration Programs," Land Economics, University of Wisconsin Press, vol. 80(1), pages 109-124.
  8. Rob Fraser, 2001. "Using Principal-Agent Theory to Deal with Output Slippage in the European Union Set-Aside Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 29-41.
  9. Marc O. Ribaudo & C. Tim Osborn & Kazim Konyar, 1994. "Land Retirement as a Tool for Reducing Agricultural Nonpoint Source Pollution," Land Economics, University of Wisconsin Press, vol. 70(1), pages 77-87.
  10. JunJie Wu, 2000. "Slippage Effects of the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 979-992.
  11. Michael J. Roberts & Shawn Bucholtz, 2005. "Slippage in the Conservation Reserve Program or Spurious Correlation? A Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 244-250.
  12. Harry R. Clarke, 1992. "The Supply Of Non‐Degraded Agricultural Land," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 36(1), pages 31-56, 04.
  13. Productivity Commission, 2002. "Pastoral leases and non-pastoral land use," Urban/Regional 0207002, EconWPA.
  14. Blamey, Russell K. & Rolfe, John & Bennett, Jeffrey W. & Morrison, Mark, 2000. "Valuing remnant vegetation in Central Queensland using choice modelling," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(3), September.
  15. Hertel, Thomas W., 2002. "Applied general equilibrium analysis of agricultural and resource policies," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 26, pages 1373-1419 Elsevier.
  16. Christian M. Dufournaud & Michael Jerrett & CJohn T. Quinn & Virginia Maclaren, 2000. "Economy-Wide Effects of Forest Policies: A General Equilibrium Assessment from Vietnam," Land Economics, University of Wisconsin Press, vol. 76(1), pages 15-27.
  17. Schweinberger, A. G., 2002. "Foreign aid, tariffs and nontraded private or public goods," Journal of Development Economics, Elsevier, vol. 69(1), pages 255-275, October.
  18. Haszler, Henry, et al, 1996. "The Wool Debt, the Wool Stockpile and the National Interest: Did the Garnaut Committee Get It Right?," The Economic Record, The Economic Society of Australia, vol. 72(218), pages 260-271, September.
  19. Adams, Philip D., 1987. "Agricultural Supply Response in ORANI," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 55(03), December.
  20. Peter G. Warr, 2001. "Welfare Effects of an Export Tax: Thailand's Rice Premium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 903-920.
  21. A. T. Blake & A. J. Rayner & G. V. Reed, 1999. "A Computable General Equilibrium Analysis of Agricultural Liberalisation: The Uruguay Round and Common Agricultural Policy Reform," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 400-424.
  22. A. Barry Carr, 1969. "Long-Term Versus Short-Term Land Retirement," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(5), pages 1524-1527.
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