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Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector

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  • Gaigné, Carl
  • Le Gallo, Julie
  • Larue, Solène
  • Schmitt, Bertrand

Abstract

The well-known increase in the geographical concentration of hog production suggests the presence of agglomeration economies related to spatial spillovers and inter-dependencies among industries. In this paper, we examine whether the restrictions on land application of manure may weaken productivity gains arising from the agglomeration process. We develop a model of production showing the ambiguous spatial effect of land availability and the restriction on the manure application rate. Indeed, while the regulation of manure application triggers dispersion when manure is applied to land as a crop nutrient, it also prompts farmer to adopt manure treatment that favors agglomeration of hog production. Estimations of a reduced form of the spatial model with a spatial HAC procedure applied to data for French hog production for 1988 and 2000 confirm the ambiguous effect of land limitations induced by the restrictions on manure application. It does not prevent spatial concentration of hog production, and even boosts the role played by spatial spillovers in the agglomeration process.

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  • Gaigné, Carl & Le Gallo, Julie & Larue, Solène & Schmitt, Bertrand, 2011. "Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector," Working Papers 208112, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    • Handle: RePEc:ags:inrasl:208112
    DOI: 10.22004/ag.econ.208112
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    1. Osseni, Abdel & Bareille, Francois & DUPRAZ, Pierre, 2018. "Decoupling Values Of Agricultural Externalities According To Scale: A Spatial Hedonic Approach In Brittany," 2018 Annual Meeting, August 5-7, Washington, D.C. 273998, Agricultural and Applied Economics Association.
    2. Sabine Duvaleix-Tréguer & Carl Gaigné, 2016. "On the nature and magnitude of cost economies in hog production," Agricultural Economics, International Association of Agricultural Economists, vol. 47(4), pages 465-476, July.
    3. Arnold Csonka & Štefan Bojnec & Imre Fertő, 2021. "Spatial Transformation of the Pig Sector in Hungary and Slovenia: A Comparative Analysis," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    4. Gong, Binlei, 2018. "Interstate competition in agriculture: Cheer or fear? Evidence from the United States and China," Food Policy, Elsevier, vol. 81(C), pages 37-47.
    5. Elodie Letort & Pierre Dupraz & Laurent Piet, 2017. "The impact of environmental regulations on the farmland market and farm structures: An agent-based model applied to the Brittany region of France," Working Papers SMART 17-01, INRAE UMR SMART.
    6. Valentin Bellassen & Jean-Sauveur Ay & Mohamed Hilal, 2020. "The drivers of spatial cropping patterns in Burgundy," Working Papers hal-02894116, HAL.
    7. Julie Le Gallo & Antonio Páez, 2013. "Using Synthetic Variables in Instrumental Variable Estimation of Spatial Series Models," Environment and Planning A, , vol. 45(9), pages 2227-2242, September.
    8. Abay Mulatu & Ada Wossink, 2014. "Environmental Regulation and Location of Industrialized Agricultural Production in Europe," Land Economics, University of Wisconsin Press, vol. 90(3), pages 509-537.
    9. Carpentier, Alain & Gohin, Alexandre & Sckokai, Paolo & Thomas, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 131-165, March.
    10. Csonka, Arnold & Fertő, Imre, 2017. "Does Crisis Have Impact on the Agglomeration in the Hungarian Pork Sector?," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261418, European Association of Agricultural Economists.
    11. Azzeddine Azzam & Gibson Nene & Karina Schoengold, 2015. "Hog Industry Structure and the Stringency of Environmental Regulation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(3), pages 333-358, September.
    12. Csonka, Arnold & Fertő, Imre, 2016. "Crisis and Agglomeration in the Hungarian Hog Sector," 149th Seminar, October 27-28, 2016, Rennes, France 244787, European Association of Agricultural Economists.
    13. Niskanen, Olli & Iho, Antti & Kalliovirta, Leena, 2020. "Scenario for structural development of livestock production in the Baltic littoral countries," Agricultural Systems, Elsevier, vol. 179(C).
    14. Wenbin Huang, 2022. "Government Land Regulations and Housing Supply Elasticity in Urban China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 122-148, July.
    15. Yuan, Lingran & Zhang, Qizheng & Wang, Shuo & Hu, Weibin & Gong, Binlei, 2022. "Effects of international trade on world agricultural production and productivity: evidence from a panel of 126 countries 1962-2014," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(2), March.
    16. Fertő, Imre & Csonka, Arnold, 2017. "Válság- és agglomerációs hatások a magyarországi sertéstartásban [Crisis and agglomeration in Hungary s pig production]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-122.
    17. Duvaleix-Treguer, Sabine & Gaigne, Carl, 2012. "Cost Economies in Hog Production: Feed prices matter," Working Papers 125261, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    18. Henry Kankwamba & Mariam Kadzamira & Karl Pauw, 2018. "How diversified is cropping in Malawi? Patterns, determinants and policy implications," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(2), pages 323-338, April.

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    More about this item

    Keywords

    Environmental Economics and Policy; Livestock Production/Industries;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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