can all be seen as political responses to shrinking forest areas. It can also be in the form of local institutional responses, as discussed further in section 3.2.3.

## **_2.2.7 Land degradation (soil exhaustion)_**

Agricultural yields are not constant over time, but benefit from good land management practices and deteriorate from bad ones. In the event of bad practices, the land rent curve shifts down, and this may lead to an abandonment of agricultural land. Mather (1992) and Mather and Needle (1998) argue that such trial and error patterns were important in the forest transition in Europe, and it also plays an important role in many poor, tropical countries today. Over time there is learning process leading to a concentration of agricultural production on the more fertile land, while poorer land is left for reforestation.

Land degradation and exhaustion of soils is a function of not only land management practices but also of natural conditions. Tropical soils with forest cover are often not able to sustain yields for prolonged periods without nutrients being replaced by fertilizers or through sufficiently long fallow periods that allow for soil recuperation. Cultivation on steep slopes makes the land more susceptible to soil erosion. Thus agricultural expansion into marginal land areas is more likely to suffer from low and declining yields.

## **_2.2.8 Summary_**

This subsection has looked at a number of feedback and interactions from changes in (mainly agricultural) land rent curves. Some of these effects tend to dampen an initial increase in the rent, while others magnify it. Similarly, an upward shift in one land rent curve can push other curves up or down, depending on which effect we are looking at and the context in which it operates.

We summarize the first five effects discussed above in two categories. Assume an increase in rent in an agricultural sector. The following effects will _tend to_ dampen the initial increase in land rent of that sector, and also reduce the land rent in other agricultural sectors: (a) General equilibrium effects in the output, labor and capital markets.

(b) Consumption and labor scarcity effects at the household level.

The following effects will _tend to_ magnify the initial increase in the land rent, and also increase the land rent in other agricultural sectors: (a) Capital accumulation effects at the household level.

(b) Increasing returns to scale in infrastructure, public services and downstream processing.

# **2.3 Technological progress in agriculture**<sup>**18**</sup>

“Technological progress” is in economics defined as an increase in _total factor productivity_ , which simply means getting more physical output with the same amount of inputs (or the same output with less inputs). Thus technological progress, defined this way, has a broader meaning than it does typically. It does not only result from the adoption of new high-yielding varieties, physical inputs or capital goods ( _embodied_ technological change), but can also result from better management practices and information ( _disembodied_ technological change).

The question of how technological progress impacts the rate of deforestation is contested. Part of the reason is that it covers a wide range of phenomena occurring in very different contexts, and the

> 18 This section draws on the edited volume by Angelsen and Kaimowitz (2001), which contains both a unifying theoretical and conceptual framework as well as a number of case studies.

18