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Land Sharing vs Land Sparing to Conserve Biodiversity: How Agricultural Markets Make the Difference

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Abstract

In this paper, we model the supply and demand for agricultural goods and assess and compare how welfare, land use, and biodiversity are affected under intensive and extensive farming systems at market equilibrium instead of at exogenous production levels. As long as demand is responsive to price, and intensive farming has lower production costs, there exists a rebound effect (larger market size) of intensive farming. Intensive farming is then less beneficial to biodiversity than extensive farming is, except when there is a high degree of convexity between biodiversity and yield. On the other hand, extensive farming leads to higher prices and smaller quantities for consumers. Depending on parameter values, it may increase or decrease agricultural producer profits. Implementing “active” land sparing by zoning some land for agriculture and other land for conservation could overcome the rebound effect of intensive farming, but we show that farmers have then incentives to encroach on land zoned for conservation, with higher incentives under intensive farming. We also show that the primary effect of the higher prices associated with extensive farming is a reduction of animal feed production, which has a higher price elasticity of demand, whereas less of an effect is observed on plant-based food production and almost no effect is observed on biofuel production if there are mandatory blending policies.

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Notes

  1. Assuming a positive level of biodiversity on intensively farmed land, such as in Green et al. [11], does not change the results of the model.

  2. This function indicates that the marginal cost of producing the quantity q of the agricultural good with technology k is equal to s k (q). Our model is consistent with the assumption that production is conducted by a continuum of perfectly competitive farmers with different agricultural production costs. Then, the marginal farmer who enters this production system, which is characterized by the highest cost of production, has a cost equal to s k (q). The production level q is obtained when the market price p is equal to s k (q); therefore, all producers receive a positive surplus from their production except the marginal farmer, who produces with a zero surplus.

  3. The price elasticity of supply is ε sk  = (p / q) ∂q / ∂p = (p / q) / (∂s k (q) / ∂q) = (a k q − b) / (a k q); the value is lower than 1 if and only if b > 0.

  4. Because y e ∈ (0, 1) and α > 0, we have y e α < 1. Land use decreases when (g + a e ) y e  > g + a i , which implies (g + a e ) y e  > (g + a i ) y e α, the condition under which biodiversity increases.

  5. Because a e  > a i and y e  < 1, we have ln((a e  + g) / (a i  + g)) / ln (1 / y e )) > 0, and therefore, ᾶ < 1.

  6. In the case where the relation between biodiversity and yield is convex, because y e ∈ (0, 1) and α ∈ [0, 1), we have y e α−1 > 1, with y e α−1 → 1 when α → 1 and y e α−1 = 1 / y e when α = 0.

  7. Analogous to Karagiannis and Furtan [44], who consider an infinitesimal variation in the slope of the supply curve, it is possible to interpret only a necessary condition for an increase in producer surplus. This necessary condition is that the section between the square brackets of the left-hand term in the inequality presented in proposition 1 must be positive, which is the case if and only if a i a e  > g 2 (the product of the two slopes of the inverse supply is higher than the square of the inverse demand slope).

  8. A minimum level of biodiversity B c introduces a cap on land use l kc with farming system k ∈ {i, e}. From Eq. (6), this cap is defined by l kc  = (1 − B c ) y k −α; from Eq. (3), it results in a production cap q kc  = (1 − B c ) y k 1−α. The price equilibrium is at the intersection of the production cap and the inverse demand curve (7), p kc  = c − g q kc , whereas the marginal cost of production is at the intersection of the production cap and the inverse supply curve (2), mc kc  = a k q kc  − b. Therefore, the price-cost difference is p kc  − mc kc  = b + c − (a k  + g) q kc ; based on the expression of q kc , this difference yields Eq. (11).

  9. For each product, the demand function is D k(p) = c k  / g k  − p / g k . Therefore, the total demand is D(p) = (∑ k c k  / g k ) − (∑ k 1 / g k ) p, from which we deduce the expression of the total inverse demand in Eq. (13).

  10. This ratio is a world average and excludes biomass that is not edible for humans but edible for animals, such as pastures, fodder crops, and crop residues.

  11. In poor countries, there is a significantly higher use of non-food biomass for feed (such as bush or crop/food residues) because arable land is mainly cultivated for food. Milk and meat yields are lower per animal, although these animals provide other key services (traction, soil fertilization, fuel, or building material with animal feces) [20].

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Acknowledgments

We wish to thank two anonymous referees as well as Guy Meunier for their helpful comments. Financial support was granted by the French National Research Agency, project ANR-11-ALID-002-01 ‘Offrir et Consommer une Alimentation Durable’.

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Authors and Affiliations

  1. Toulouse School of Economics, INRA, University of Toulouse Capitole, 21 allée de Brienne, 31015, Toulouse Cedex 6, France

    Marion Desquilbet

  2. CIRAD, UMR CIRED, 73 rue J.F. Breton, 34398, Montpellier, France

    Bruno Dorin

  3. CSH, UMIFRE MAE-CNRS, 2 Aurangzeb Road, New Delhi, 110011, India

    Bruno Dorin

  4. UMR CESCO MNHN-CNRS-UPMC, 55 rue Buffon, 75005, Paris, France

    Denis Couvet

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Desquilbet, M., Dorin, B. & Couvet, D. Land Sharing vs Land Sparing to Conserve Biodiversity: How Agricultural Markets Make the Difference. Environ Model Assess 22, 185–200 (2017). https://doi.org/10.1007/s10666-016-9531-5

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