Property-level assessment of change in forest clearing patterns: The need for tailoring policy in the Amazon

Once driven by large-scale clearings, Amazon deforestation now occurs mostly in small increments. Did this result from the emergence of a new group of agents or from a strategic adaptation in the behavior of those who led deforestation in the past? We address this question using georeferenced data on private rural properties and deforestation. We cross property-level and forest clearing data in an empirical setting designed to detect shifts toward clearing patches that were knowingly invisible to the monitoring system. We are therefore able to assess not only whether deforesters were responding strategically to stricter monitoring of deforestation, but also how this response differed across actor types. Results suggest that centralized policy efforts introduced starting in the mid-2000s inhibited medium- and large-scale deforestation, but had heterogeneous effects on small-scale deforestation. Although the relative participation of small deforestation polygons increased in both sample states, the relative participation of smallholders in total state deforestation increased in Pará, while remaining constant in Mato Grosso. We interpret these results as suggestive — albeit not causal — evidence that landholders strategically responded to the monitoring system by adapting their forest clearings practices to elude monitoring in both Mato Grosso and Pará. In the latter, however, the increase in smallholders’ share of annual deforestation suggests that their clearing practices were relatively less affected by what effectively contained deforestation in large properties. The apparent similarity in scale of deforestation across states conceals relevant baseline differences between the agents engaging in forest clearing in each locality. Tailoring policy to account for such differences could strengthen Brazilian conservation policy.     

Crossing spatial analyses and livestock economics to understand deforestation processes in the Brazilian Amazon: the case of São Félix do Xingú in South Pará

The Amazon is the largest tropical forest area on Earth, and has been undergoing rapid deforestation for the last four decades. In the Brazilian Amazon, large‐scale pasture for cattle ranching and soybean production are the main land uses, leading to a yearly deforestation rate of 0.5%. These conversions are mostly located in frontier areas distributed along the so‐called “arc of deforestation”. Within this large zone, various land use change processes are interacting through several modes of land valuation and organisation. From several case studies in the State of Pará (Brazil), the current project aims at analysing how landscape dynamics are related to infrastructure development, ecological conditions, zoning policies and to the evolution and the organisation of the production, consumption and marketing chains of livestock products. This paper presents the results for one test site, the region of São Félix do Xingú, South of Pará This region is the focus of land speculation, cattle expansion, and deforestation. Road construction, investments in electrical energy, financial credit for cattle, and the land reform policies have all fuelled this process. All these factors make this region one of the most dynamic agricultural frontiers in the Brazilian Amazon. The main objective of the paper is to improve our understanding of deforestation processes by crossing spatial analyses and 1ivestock economics.studies, and to characterise the role and impact of various natural and anthropic factors in the location and development of the main types of farmers, and their policy implications.     

Land use and economic effects of alternative biofuel policies in Brazil and the United States

Being the two largest ethanol producers in the world, biofuel policies in Brazil and the United States affect both their domestic markets and the global food and biofuel economy. In this article we develop a price endogenous mathematical programming model to simulate and analyze the impacts of biofuel mandates and trade distortions on land use, agricultural commodity and transportation fuel markets, and global environment. We find that an 80% increase in total biofuel production from its 103 billion liter baseline level to the mandated 183 billion liter level in 2022 can be achieved with less than 2% increase in total cropland use in both countries. In the United States, this would occur with cellulosic biofuels meeting nearly half of the biofuels consumed and produced largely on cropland pasture and corn ethanol meeting the rest of the mandate and resulting in a 2% increase in corn price. In Brazil, the expansion in sugarcane production would be achieved by reducing land under pasture and a marginal increase in intensification of livestock production. In the aggregate, biofuel policies increase economic surplus in both countries by 1% and redistribute the benefits from agricultural consumers to agricultural producers and the fuel sector. Finally, we also find that full implementation of the mandates in North America, China, and the European Union would reduce the global life‐cycle global greenhouse gas emissions by about 5%.     

Evaluating the economic impacts of crop yield change and sea level rise induced by climate change on Taiwan's agricultural sector

This article investigates the effects of sea level rise and climate change induced crop yield alterations on Taiwan as well as possible adaptation strategies. For sea level rise of up to 5 meters, as much as 4.9% of total acreage and 16% of rice acreage would be lost. The empirical findings show that the sea level damages range from NT$ 0.84 to 4.10 billion while crop yield losses range from NT$ 1.79 to 2.55 billion. We investigate alternative adaptation strategies finding crop yield technological progress and tariff reduction could significantly mitigate these effects.     

Evaluating the uncertainty in estimates of the economic impacts of Bovine-Leukosis virus in U.S. dairy cows

An examination of the economic impacts of Bovine‐Leukosis virus indicated that reduced milk production, attributed to the presence of Bovine‐Leukosis virus in dairy cows, reduced consumer surplus by 2.7 ± 2.3 billion US$ (bUS$), and resulted in a total partial equilibrium loss of 720 ± 560 million US$ (mUS$) to the U.S. economy in 1996. Most of the economic surplus lost by consumers was transferred to producers, whose economic surplus increased by 2.0 ± 1.8 bUS$ as a result of reduced milk production attributed to the presence of Bovine‐Leukosis virus in dairy cattle. Uncertainty analysis showed that an estimate of the milk‐production decline per percent increase in the prevalence of Bovine‐Leukosis virus in dairy cows accounted for most of the uncertainty in the economic‐impact estimates. If Bovine‐Leukosis virus had not been present in U.S. dairy cows, then milk production would have increased by 2.0 billion ± 1.5 billion kg, the price would have fallen by 3.8 ± 3.2 cents/kg, and the value of the milk produced would have decreased by 2.1 ± 1.9 bUS$. Guidelines delineated by the International Organization for Standardization, for evaluating and expressing uncertainty in measurement, are discussed and proposed for use in the context of broad national estimates, for which the economic impacts of Bovine‐Leukosis virus serve as an example. The principal advantages of the methodology are the clarity and transparency of results, and the ability clearly to identify major uncertainty contributors.     

The new economic geography of land use change: Supply chain configurations and land use in the Brazilian Amazon

In this paper we present a framework for understanding regional land use processes by incorporating the concept of agglomeration economies into agricultural frontier theory. We show that agricultural firms can obtain positive externalities from locating in close proximity to other agricultural firms, leading to agglomeration economies. Agglomeration economies lead to high levels of competition and diversity within a local agricultural supply chain and influence local prices, information flows, and private enforcement of environmental institutions. We use the theory of agglomeration economies to understand the development of soybean production in two counties along the Santarém-Cuiaba (BR-163) highway in the Brazilian Amazon: Santarém, Pará and Sorriso, Mato Grosso. We conclude that differences in environmental and land tenure institutions influenced the occurrence of agglomeration economies in these two counties, which in turn affected the total factor productivity of soy in each region. In particular, the supply chain became extremely competitive and diverse in Sorriso where few environmental regulations existed, while environmental restrictions reduced the diversification of the supply chain in Santarém. The presence of a soy agglomeration economy in Sorriso spurred innovation, increased productivity, and led to extremely rapid soy expansion in that county, while the monopolistic supply chain in Santarém reduced producers’ access to land and capital and impeded soy expansion.     

Impacts of changing water inflow distributions on irrigation and farm income along the Drâa River in Morocco

Irrigation water is essential for agriculture in the arid Drâa River basin in Morocco but climate change leads to increasingly unreliable water supply in the area. This article analyzes impacts of changing water inflow distributions on irrigation and farm income extending a conjunctive river basin model toward a stochastic modeling approach. Regional climate scenarios are used to derive a maximum likelihood density estimate of current and future water supplies. Based on these distributions, Monte Carlo simulations are performed to obtain stochastic model results on surface and groundwater irrigation as well as economic indicators for six oases along the river. The probability of farmers to receive revenues below the subsistence level is around 2% under current conditions, but this is likely to rise to rates of 6% to 15% depending on the underlying climate change scenario. The composition of water sources for irrigation will shift to more groundwater use. The river basin model is able to represent complex spatial interactions between oases as well as a partial complementarity between groundwater and surface water irrigation due to salinity management effects. Interestingly, the value of groundwater is not necessarily increasing under future climatic conditions as salinity problems are aggravated with expanded groundwater use.     

Non‐Parametric Modelling of CO2 Emission Quota

Dutch glasshouse firms are facing the introduction of a system of tradable CO₂ emission quotas. This paper employs a non‐parametric method for modelling tradable CO₂ emissions of Dutch glasshouse firms. The method is capable of generating shifts in CO₂ emissions across the sample of firms. Moreover, changes in volumes of outputs produced and inputs used are computed. Results show that firms using a conventional heating technology will be net purchasers of CO₂ emissions, whereas firms using more advanced heating technologies will sell part of their emission quota.     

Factors affecting participation in joint forest management in the West Bengal state of India

This study analyses participation in joint forest management (JFM). The study is based on in-depth interviews with 150 households of Forest Protection Committees (FPC) in Paschim Medinipur district in the West Bengal state of India. Based on a Principal Component Analysis (PCA) of 14 participatory indicators, it follows that “social” aspects of participation are considerably less important in West Bengal than as found elsewhere in India, while the perception of the environment (first and third factor) stand out as the most important aspects of participation in JFM, jointly explaining almost half of the variance. Regression analyses indicate that household size, the number of forest committee meetings, religion of the household, willingness to pay of the household for the forest protection and the size of land holding are important variables for explaining variation in levels of participation. Results from estimating game theoretic models on participation among villagers in JFM indicates that in two out of the four possible situations, harmonious sharing of the benefits is an (Nash) equilibrium, but not unique. In all cases, institutional checks and balances are needed to guarantee mutual participation, which is possible only by strengthening the JFM management body.     

Impact of the 2014 Suspension Agreement on sugar between the United States and Mexico

In December 2014, the U.S. and Mexico agreed to a suspension agreement that set a $22.25/cwt import price floor on U.S. sugar imports from Mexico. A partial equilibrium trade model was developed to estimate the economic impact the agreement would have had if it had been in effect from 2008 to 2014. In years when the price floor would have been binding, on average, U.S. producers would have gained $138 million and Mexican producers would have lost $218 million. However, total Mexican welfare would have actually increased by $11.5 million. Furthermore, the average price floor that would have maximized total Mexican welfare over that period is $22.76/cwt. Also, under certain supply and demand elasticity conditions, the average price floor that would have maximized joint U.S. and Mexican producer welfare over that period is $21.91/cwt. The latter two estimates are both close to the actual price floor agreed to in the 2014 Suspension Agreement.     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

Factors explaining the low and variable profitability of fertilizer application to maize in Zambia

It is widely recognized that an “African green revolution” will require greater use of inorganic fertilizers. Often‐made comparisons note that fertilizer use rates in Africa are just 10–20% of those in Asia, Europe and the Americas. Most attempts to explain relatively low‐adoption of fertilizer assume yield responses to inorganic fertilization warrant higher application rates and hypothesize that observed use rates are limited by market‐based factors. Another explanation may be that application rates are low because African yields are less responsive to inorganic fertilizer than yields in other regions, and less responsive than analysts perceive. Examining the case of Zambia, we evaluate whether yield response to fertilizers could explain adoption and application rates. A model of yield response is constructed and a combination of estimators is employed to mitigate potential biases related to correlation between fertilizer use and unobserved heterogeneity as well as stochastic shocks. Results indicate higher fertilization rates would be marginally profitable or unprofitable in many cases given commercial fertilizer and maize prices. Phosphoric fertilizer is particularly unprofitable on acidic soils, which are common in Zambia and other areas of sub‐Saharan Africa. We propose feasible recommendations for diversifying the current government strategy to enhance crop productivity.     

The Economic impact of public agricultural research and development in the United States

In this article, we examine the relationship between public investments in agricultural research and development and the productivity‐enhancing benefits they generate. Knowledge productivity functions are estimated for U.S. agriculture using data on multifactor productivity and public knowledge stocks. We examine the time‐series properties of the data and compare alternative econometric estimation procedures. The results are used to calculate economic performance measures such as internal rates of return and benefit‐cost ratios. The real rate of return to public investments in agricultural research and development in the United States is in the range of 8–10% per annum.     

Gender differences in agricultural productivity: the case of Tanzania

The article examines gender differences in agricultural productivity using panel data for Tanzania. At the national level, there is weak evidence of mean differences in productivity between male and female plots, but conditional on manager characteristics, plot characteristics, inputs, and crop choice, plots managed solely by a woman are consistently found less productive than all other plots. An Oaxaca‐Blinder‐type decomposition reveals that important factors explaining the gender differential are plot area and family labor. Women are able to obtain higher yields on smaller plots farmed with less male labor and more female labor and thus cover the gender gap in productivity at the aggregate level, but there are still significant unobservable factors which contribute to widening the gap.     

The Social Value of Seascapes in the Jurien Bay Marine Park: An Assessment of Positive and Negative Preferences for Change

The Jurien Bay Marine Park, Australia, is known for its pristine seascapes, including views of the ocean and of the coastline. To aid the management of the various seascapes, this paper estimates aspects of the social value of these seascapes through the use of a contingent valuation study. Positive and negative preferences for change were accommodated within the survey design and model estimation. A single‐function extended spike model was employed to estimate the willingness to pay (WTP) for protection of the seascapes, and was later constrained to a restricted version of a spike model. The restricted model identified that a proportion of the population had a positive preference for change within the seascapes, but a larger proportion had a negative preference, resulting in a positive net WTP to maintain seascapes in their current condition. Seascapes with coastal views were determined as having the highest social value; however, the value of the ocean seascapes followed closely behind. The positive welfare estimate for natural seascapes provides a reason for their preservation.