optimal farm size in an uncertain land market the case of kyrgyz republic this article applies a real options model to the problem of land development making use of the 1998 2001 kyrgyz household budget survey we show that when the hypothesis of decreasing return to scale holds the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive in addition the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land the direct consequence is that in the first case smaller farms will be more willing to rent land and exercise the option where in the second case larger farms will exercise first the results suggest three main conclusions i the combination of uncertainty and irreversibility is an important factor in land development decisions ii farmer behavior is consistent with the continuous profit maximization model and iii farming unit revenue tends to be positively related to farm size once uncertainty is properly accounted for

deforestation and the rule of law in a cross section of countries relationships between deforestation and population pressure income growth and insecure property rights are examined with data from 120 countries insecure property rights are hypothesized to arise from two sources government instability or inability to enforce ownership and an absence of government accountability the former source is captured by measures of general lawlessness such as guerrilla warfare revolution and frequent constitutional change the latter is proxied by variables indicating the type of government executive frequency of political purges and the existence of an elected legislature general support is indicated for the property rights hypothesis and for the effects of population growth

deforestation and development in a small open economy abstract our economy faces world prices and starts with a large endowment of land in forest and a small endowment of land in agriculture clearing of forested land yields marketable timber and a unit of land for agriculture early the high price of agricultural land drives the clearing process later the profit from marketing timber from the cleared land drives the process dates of phase transitions are endogenous we also set out a submodel of perpetual cyclic clearing and reforesting and show that it when cyclical harvesting regrowing is optimal the extent of clearing can be relatively large

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

the interaction of population growth and environmental quality an important question for policy is whether holding constant per capita income and other relevant factors population pressures have a significant effect upon environmental degradation the authors examine the effect of population pressures upon deforestation in 64 developing countries in an attempt to provide relevant empirical findings data on deforestation were drawn from the food and agriculture organizations production yearbook results suggest that a relationship exists between per capita income and deforestation and that for africa rural population density shifts the relationship upward the increase in the rate of deforestation levels off as income increases the rate of growth in per capita income also has a significant negative impact upon deforestation although the magnitude of the effect is small the authors close in stressing that reducing the rate of population growth is not necessarily the best way to reduce the rate of deforestation deforestation in developing countries is really a problem of market failure since property rights are often neither defined nor enforced there is essentially no private cost of deforestation with no long term stake in the land people have no incentive to use land efficiently this situation must be addressed in conjunction with the problems of poverty and population growth

changing political regimes and tropical deforestation expansion of agriculture is a main cause of tropical deforestation government policies and weak property rights contribute to this process by encouraging landowners and landless to accelerate land clearing using panel data common to previous studies we add the dimension of new political regimes democratic and non democratic and investigate how the rate of agricultural land expansion in tropical countries depends on the nature and persistence of each regime we find that both new autocratic and democratic regimes have accelerated the expansion of agricultural land thus yielding support to some of the findings in the earlier literature interesting differences emerge between regions with the impact being most pronounced in latin america we interpret these results mainly in the context of increasing tenure and ownership insecurity which in turn is driven by the tendency of new regimes to implement land reforms as a form of social and economic policy or voter payback the argument is developed more formally using a simple competitive land use model that incorporates political regime dependent confiscation risk and agricultural subsidy policy

the economics of tropical forest land use options tropical deforestation is generally characterized as conversion of forest land to alternative uses notably agriculture this would suggest the need for rational decision making concerning the optimal allocation of tropical forest land between competing uses the following paper explores this problem by devising rules for determining optimal land use allocation between timber and agriculture at the stand and forest levels a complementary intertemporal model for optimal allocation of forest land to agricultural conversion at the forest level is also developed and used to derive a demand relationship for agricultural conversion which is then approximated through empirical estimation

great expectations and hard times the argentine convertibility plan this paper studies the process that led to the argentine crisis the analysis concentrates on the sequence of public and private decisions together with the varying perceptions and policy incentives that motivated them in the 1990s argentina searched for a new growth trend during much of the period the behavior of agents seemed to be based on the anticipation that current and future incomes could sustain a value of domestic spending much higher than in the past in both real and dollar terms the government was motivated to reinforce those expectations for signaling and political economy reasons the monetary regime not only provided a very visible nominal anchor but also operated as a basic framework for financial contracts mostly denominated in dollars dollar contracting implicitly presumed that the dollar value of incomes would support the servicing of debts despite precautionary actions on the part of the government and the private sector over time an increasing mass of decisions and contracts came to rely on the sustainability of the real exchange rate in the late 1990s exports stopped rising and the foreign supply of credit tightened the economy contracted in the face of these constraints and the solvency of the government was called into question the financial system was vulnerable both in the event of devaluation and in the event of a large deflation cum adjustment convertibility proved to have very large exit costs as was implicit in its design and management

land use and income diversification comparing traditional and colonist populations in the brazilian amazon this article compares and analyzes land use and income diversification among two distinct groups of farmers in the brazilian amazon recent colonists in ouro preto do oeste rondonia and traditional long term residents along the tapajos river para we investigate the hypothesis that farmers who diversify their cash income sources clear less forest on an annual basis and we compare these livelihood choices across colonist and traditional populations in particular we develop a conceptual model based on the household production framework and use econometric models to identify determinants of diversification and forest clearing we find that diversification of agricultural cash crops is negatively correlated with forest clearing by colonists providing limited evidence for the hypothesis other significant covariates of diversification and forest clearing include cash income levels stage in family life cycle cattle ownership and chemical inputs differences in these variables and differences in household response to these variables explain variation in diversification and forest clearing across the two populations

trade policies economic growth and the direct causes of deforestation by ramon lopez gregmar i galinato please send correspondence to ramon lopez 2200 symons hall university of maryland college park md 20742 email rlopez arec umd edu tel 301 405 1281 fax 301 314 9091 gregmar i galinato 2200 symons hall university of maryland college park md 20742 email ggalinato arec umd edu tel 301 405 0477 fax 301 314 9091

virtual land use and agricultural trade estimating environmental and socio economic impacts abstract liberalization has caused an increase in the global trade of goods and services in particular the value and physical volume of agricultural goods traded have largely increased as the environmental and social consequences of trade are complex they are rarely included in the national and international agricultural policies one reason is that there is a lack of concepts and methods for assessing the environmental and social impacts of trade policies in this paper we develop a method for quantifying and assessing the land use hidden in the export and import of agricultural goods for the case of switzerland for our analysis we focus on arable crops the first methodological step of our research illustrates the spatial relationship of switzerland with countries all over the world through the import and export of land use for arable crops the second step links this spatial dimension with a qualitative assessment of the environmental and socio economic impacts of agricultural land use we applied the method to the case of wheat cultivation within switzerland and import to switzerland the major problem we were confronted with was the availability of data which had both to be reliable and available for the countries wheat is imported from the results show that the calculation of land use is credible in spite of the problems related with data availability the assessment results for each indicator are in agreement with the current situation in the respective countries in addition the aggregation seems to accurately reflect the countries agricultural polices the developed method is used to estimate the overall environmental and socio economic impacts of an increase in wheat imports to switzerland we argue that this method could be applied for anticipating potential impacts of trade agreements still further research is required for fine tuning of the utility functions including a weighting procedure in the aggregation procedure for practical applications important aspects like water shortage should enlarge our limited set of indicators in addition the average impact on a country level was assessed to refine that different agricultural systems ranging from intensive to extensive to organic should be considered beyond our scope was to analyze impacts due to other life cycle stages than the agricultural production for informed decision however information on the whole life cycle of agricultural products is required

rebound effects in agricultural land and soil management review and analytical framework abstract increasing the efficiency of production is the basis for decoupling economic growth from resource consumption in agriculture more efficient use of natural resources is at the heart of sustainable intensification however technical improvements do not directly translate into resource savings because producers and consumers adapt their behaviour to such improvements often resulting in a rebound effect where part or all of the potential resource savings are offset in extreme cases increases in efficiency may even result in higher instead of lower resource consumption the jevons paradox rebound effects are particularly complex in agricultural land and soil management where multiple resources are used simultaneously and efficiency gains aim to lower the need for farmland water energy nutrients pesticides and greenhouse gas emissions in this context quantification of rebound effects is a prerequisite for generating realistic scenarios of global food provision and for advancing the debate on land sparing versus land sharing however studies that provide an overview of rebound effects related to the resources used in agriculture or guidelines for assessing potential rebound effects from future innovations are lacking this paper contributes to closing this gap by reviewing the current state of knowledge and developing a framework for a structured appraisal of rebound effects as a test case the proposed framework is applied to emerging technologies and practices in agricultural soil management in germany the literature review revealed substantial evidence of rebound effects or even jevons paradox with regard to efficiency increases in land productivity and irrigation water use by contrast there were few studies addressing rebound effects from efficiency increases in fertilizer use pesticide application agricultural energy use and greenhouse gas emissions while rebound effects are by definition caused by behavioural adaptations of humans in agriculture also natural adaptations occur such as resistance of pests to certain pesticides future studies should consider extending the definition of rebound effects to such natural adaptations the test case revealed the potential for direct and indirect economic rebound effects of a number of emerging technologies and practices such as improved irrigation technologies which increase water productivity and may thereby contribute to increases in irrigated areas and total water use the results of this study indicated that rebound effects must be assessed to achieve realistic estimates of resource savings from efficiency improvements and to enable informed policy choices the framework developed in this paper is the first to facilitate such assessments

amenity benefits and the optimal allocation of land agricultural land often yields sig nificant amenity benefits that may not be re flected in the prevailing allocation of land be tween agricultural and nonagricultural uses this paper introduces a simple supply demand model that incorporates these benefits in the de termination of optimal land allocation three stage least squares and county level data are used to estimate the supply and demand param eters these estimates confirm the plausibility of the conceptual model results from the con tingent valuation literature illustrate the extent of underallocation of land to agriculture due to existing institutional conditions some correc tive measures and their distributional effects are discussed and quantified jel q24

choice modelling and its potential application to tropical rainforest preservation abstract loss of rainforest occurs in part because of a global market failure problem markets routinely transmit signals about international demands for forest products such as timber but fail to transmit signals about demands for preservation to make efficient resource allocation choices decision makers need some framework to estimate the non use values that might be held by an international community for rainforest preservation non market valuation techniques can be used for this purpose but framing and other problems limit the application of the contingent valuation method cvm an alternative technique choice modelling cm appears to hold some promise because it can be used to model complex situations and to frame choices consistent with real life choices in this paper a cm experiment to assess the values that australians hold for rainforest conservation in vanuatu is reported the experiment disguises effectively the issue of interest rainforest conservation in vanuatu within a pool of other conservation locations also the experiment demonstrates that choice tradeoffs may involve a variety of environmental and socio economic factors rather than be concentrated on some monetary tradeoff the results demonstrate that a variety of predictive and valuation tools can be gained from a cm experiment and suggest that further development is warranted

explaining forest transitions the role of governance abstract we analyze how governance may influence competing land uses for forests and thus the occurrence of forest transitions across different low and middle income countries we develop a model of competing land uses that allows for governance to impact the risk of future versus current agricultural and forested land allocations the resulting hypothesis on the relationship between governance and the likelihood of a forest transition is then tested using cross country data the empirical analysis offers strong support for the competing land use framework and indicates that rule of law forest policy and regulatory quality influence forest transitions these findings inform not only the ongoing debate on forest transitions but also policy options for managing such transitions in developing economies

planning timber production with evolving prices and costs the traditional faustmann solution to the timber harvesting problem was developed for an environment in which prices costs and technology were constant recent contributions recognizing the evolution of economic institutions have developed solutions to optimal harvesting problems under a variety of more realistic assumptions nautiyal and fowler 1980 show that the socially desirable rotation in a monopolistic situation is longer than that which maximizes the monopolist s present worth but is shorter than the atomistic rotation p 213 heaps and neher 1979 derive the optimal rotation when the rate of harvest is constrained bare and waggener 1980 investigate the value of timberland when timber prices change using a traditional faustmann model murphy fortson and bethune 1977 deal with an imperfect capital market one problem not addressed by recent contributions concerns the violation of the assumption of constant price and cost functions for timber production this assumption clearly does not hold stumpage prices exhibit substantial short run fluctuations and systematic long run trends for southern pine and douglas fir two species that are potential crops for timber plantations historical evidence demonstrates that stumpage prices relative to other price have grown steadily for the period 1913 1978 the ratio of southern pine stumpage price to prices paid by farmers increased at a 4 annual rate while the same ratio for douglas fir increased at an annual rate of 5 7 1 for douglas fir and southern pine forecasts of prices and costs based on his

a model of shifting cultivation can soil conservation reduce deforestation shifting cultivators manage soil not only by adjusting soil use on already cleared lands as in continuous cultivation but also by clearing forests to obtain new fertile soils this study examines the crucial link between on farm soil conservation and deforestation in shifting cultivation by modeling forest clearing as an investment in soil for a private farmer more generally by doing so the study attempts to integrate deforestation and soil conservation models which have been separately developed in the literature our policy goal is to arrest tropical deforestation as destruction of global commons caused by land degradation in shifting cultivation while improving the well being of poor shifting cultivators our integrated approach enables joint policy analyses of deforestation and land degradation three welfare enhancing policies are considered the first is agricultural and nonagricultural subsidies affecting farm and nonfarm income opportunities the second is fiscal and tenure policies affecting discount rates our question is whether the link between forest clearing and soil fertility alters the outcomes of these two standard macroeconomic policies commonly found in the literature the third policy or program is various soil conservation measures affecting soil regeneration and erosivity on already cleared lands this article examines a very important question which has received little attention in previous theoretical works can soil conservation reduce deforestation this study confirms anti deforestation effects of the promotion of nonfarming activities a common and often emphasized finding in previous works among shifting cultivators more importantly it also demonstrates that improving various soil conservation measures not only discourages forest clearing among shifting cultivators but also tends to have greater effects on forest protection than promoting nonfarming activities contrarily agricultural price subsidy or technological progress gives rise to the opposite outcome and lowering the farmer s discount rate or improving tenure security encourages him her to clear more forests just to accumulate soil

the causes of tropical deforestation in ecuador a statistical analysis abstract this paper reports a statistical analysis of the causes of agricultural colonization and land clearing in eastern ecuador the results bolster many of the arguments that have been made about the social forces driving tropical deforestation in general the prospect of capturing agricultural rents stimulates settlement of tree covered hinterlands accordingly the presence of roads and urban centers attracts rural settlement colonists also prefer to go where soils are suitable for crop or livestock production all else remaining the same in addition to being a function of population pressure the extent of land clearing is shown to be a consequence of tenure insecurity these results suggest that institutional reform is needed to encourage conservation of tropical forests

deforestation and agricultural productivity in the cote d ivoire an optimal control model is used to determine the optimal steady state forest stock in the cote d ivoire this stock is shown to increase with increases in the forestry returns relative to those in agriculture technological progress in agriculture and increases in the social discount rate serve to lower the optimal steady state forest stock based on an estimated aggregate yield function the optimal forest stock is shown to be most sensitive to changes in the social rate of discount assuming current 1985 technology deforestation appears socially optimal only for values of the discount rate greater than 8