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On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling

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  • Carpentier, Alain
  • Gohin, Alexandre

Abstract

Crop rotations are known to have two main kinds of economic effects: direct effects on potential yields and on the productivity of different inputs, and indirect effects on economically optimal input levels, especially pesticides and fertilizers. The main objective of this article is to uncover the mechanisms through which crop rotation effects affect the acreage choices of forward-looking farmers, in a dynamic programming framework. Whereas most models considering acreage choices with crop rotation effects are based on discrete choice models at the plot level, our model considers a farm level strategy. This implies that our theoretical modeling framework is closely related to the models commonly used for empirically investigating farmers’ acreage choices, either in the multicrop econometric literature or in the mathematical programming literature. We provide original results aimed at characterizing the properties of optimal acreage choices accounting for crop rotation effects and constraints in an uncertain context. Using a stochastic programming approach together with a Lagrangian approach we show that optimal dynamic acreage choices can be formally characterized as static acreage choices with contingent renting/lending markets for acreages with specific preceding crops. The crop rotation constraint Lagrange multipliers provide the renting/lending prices of acreages with specific crop histories. The results presented in the article are mainly theoretical. Our modeling framework can easily be implemented in practice since it mainly considers quadratic programming problems and their solution functions.

Suggested Citation

  • Carpentier, Alain & Gohin, Alexandre, 2015. "On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling," Working Papers 205299, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    • Handle: RePEc:ags:inrasl:205299
    DOI: 10.22004/ag.econ.205299
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    2. Cholez, Celia & Magrini, Marie-Benoit & Galliano, Danielle, 2016. "Technical knowledge and production contracts between a company and its suppliers: lessons from a French case-study," 149th Seminar, October 27-28, 2016, Rennes, France 244775, European Association of Agricultural Economists.
    3. Bareille, François & Dupraz, Pierre, 2016. "Biodiversity productive effects in milk farms of western France: a multi-output primal system," 149th Seminar, October 27-28, 2016, Rennes, France 244774, European Association of Agricultural Economists.
    4. Bareille, Francois & Dupraz, Pierre, 2017. "Biodiversity Productive Capacity in Mixed Farms of North-West of France: a Multi-output Primal System," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261288, European Association of Agricultural Economists.

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    More about this item

    Keywords

    Agricultural and Food Policy; Crop Production/Industries;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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