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Multiple equilibria, soil conservation investments, and the resilience of agricultural systems

Published online by Cambridge University Press:  13 July 2006

JOHN M. ANTLE ,
JETSE J. STOORVOGEL  and
ROBERTO O. VALDIVIA
JOHN M. ANTLE
Affiliation:
Department of Agricultural Economics and Economics, Montana State University, P.O. Box 172920, Bozeman, MT 59717-2920, USA. E-mail: [email protected]
JETSE J. STOORVOGEL
Affiliation:
Department of Environmental Sciences, Wageningen University, P.O. Box 37, 6700 AA Wageningen, The Netherlands. E-mail: [email protected]
ROBERTO O. VALDIVIA
Affiliation:
Department of Agricultural Economics and Economics, Montana State University, P.O. Box 172920, Bozeman, MT 59717-2920, USA. E-mail: [email protected]
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Abstract

This paper provides a new explanation for the persistent land degradation in some parts of the world, despite the availability of seemingly effective soil conservation technologies. We demonstrate that soil conservation technologies may induce agricultural systems to exhibit equilibria characterized by both low and high levels of soil degradation. These two equilibria are separated by a threshold level of soil degradation beyond which a conservation investment will not yield a positive return. Once a parcel of land crosses this productivity threshold, soil degradation becomes economically irreversible (it is not profitable to invest in soil conservation) even though the degradation may be technically reversible. A case study of terracing investments in Peru is used to demonstrate the existence of multiple equilibria under conditions typical of many marginal agricultural areas. These findings help explain why attempts to encourage permanent adoption of soil conservation practices often fail, and how more successful policies could be designed.

Type
Research Article
Information
Environment and Development Economics , Volume 11 , Issue 4 , August 2006 , pp. 477 - 492
Copyright
2006 Cambridge University Press

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Footnotes

This research was supported in part by Montana State University, by Wageningen University, by the USAID Soil Management Collaborative Research Support Program, by the Ecoregional Fund to Support Methodological Initiatives, and by the EPA STAR Climate Change program. Although the research described in this article has been funded in part by the United States Environmental Protection Agency through grant R-82874501-0 to Montana State University, it has not been subjected to the Agency's required peer and policy review and therefore does not necessarily reflect the views of the Agency and no official endorsement should be inferred.