Land sharing vs. land sparing for biodiversity: How agricultural markets make the difference
We show that between intensive and extensive farming, the production method most beneficial to biodiversity depends on the equilibrium of agricultural markets. All other things equal, as long as demand reacts to prices and extensive farming has higher production costs, extensive farming tends to be more beneficial to biodiversity than intensive farming, except when there is a very high degree of convexity between biodiversity and yield. Extensive farming is detrimental to consumers when their surplus is evaluated restrictively, as increasing in quantities consumed, while its effect on agricultural producers is indeterminate. Extensive farming has no straightforward effect on food security, but could decrease the pressure on protected areas. Any increase in demand, notably for animal feed or biofuels, decreases biodiversity, regardless of the production method employed. However, additional demand reinforces the preference for extensive farming, especially in the case of animal feed, for which price elasticity is higher.
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