The economic dynamics of land degradation in the presence of an exhaustible resource: Government policy, cropping system choice and wind erosion in semi-arid rainfed agriculture

A behavioral model of farm-firm decision making with respect to cropping system choice and hence soil resource depletion over time was used to examine the economic dynamics of land degradation in semi-arid rainfed agriculture. Optimal control models, taking into account the effect of reductions in the soil stock, the within-period erosion damage to crops, and the environmental costs associated with erosion, provide the conditions for profit maximization. These results are then used to determine the choice of initial cropping system, the switching time between an erosive and less erosive cropping system, and the time to exhaustion of the land resource.;Comparative dynamics exercises demonstrate the effect on cropping system choice, switching time, and exhaustion time of changes that affect revenues, cropping system erosiveness, and the user cost of soil erosion. Results from these exercises point to the potential roles of technological change and government policy in depletion of the soil resource. Results from the models also point to the difficulty of unambiguously determining the effect of policy when complex natural dynamic systems are involved.;A version of the theoretical model was used to simulate the economic dynamics of cropping system choice on the southern Texas High Plains. Field research revealed that experts could not agree which cropping system was more or less erosive. Expert opinion was divided into two schools of thought, each with evidence to support its point of view, and each having different implications for cropping system choice and policy. Aside from the implications of the two views for the simulation results, the empirical work produced a number of more general results. First, the results support the primacy of cotton and the continued viability of dryland agriculture in the region. Second, the estimated declines in yields are much lower than the estimates in previous studies of on-site productivity impacts. Third, erosion rates of the feasible cropping systems are not sufficiently different to have a major effect on the outcomes. Finally, policy would need to make a fairly dramatic difference in either relative prices, relative costs, or relative yields in order to alter the outcomes.