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

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.

Suggested Citation

  • Carl Gaigné & Julie Le Gallo & Solène Larue & Bertrand Schmitt, 2011. "Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector," Working Papers SMART - LERECO 11-02, INRA UMR SMART-LERECO.
  • Handle: RePEc:rae:wpaper:201102
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    References listed on IDEAS

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    1. repec:eee:jfpoli:v:81:y:2018:i:c:p:37-47 is not listed on IDEAS
    2. repec:rae:jourae:v:96:y:2015:i:1:p:131-166 is not listed on IDEAS
    3. Alain CARPENTIER & Alexandre GOHIN & Paolo SCKOKAI & Alban THOMAS, 2015. "Economic modelling of agricultural production:past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(1), pages 131-166.
    4. Abdel Fawaz Osseni & François Bareille & Pierre Dupraz, 2019. "Decoupling values of agricultural externalities according to scale: a spatial hedonic approach in Brittany," Working Papers hal-02154536, HAL.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. repec:spr:ssefpa:v:10:y:2018:i:2:d:10.1007_s12571-018-0771-x is not listed on IDEAS
    11. 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.
    12. 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.
    13. 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).

    More about this item

    Keywords

    hog production; land availability; manure application regulation; agglomeration economies; spatial econometrics;

    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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