On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling

Alain Carpentier and Alexandre Gohin

No 15-04, Working Papers SMART from INRAE UMR SMART

Abstract: Crop rotations are known to have two main kinds of economic effects: direct effects on potential yields and on the productivity of different inputs, and indirect effects on economically optimal input levels, especially pesticides and fertilizers. The main objective of this article is to uncover the mechanisms through which crop rotation effects affect the acreage choices of forward-looking farmers, in a dynamic programming framework. Whereas most models considering acreage choices with crop rotation effects are based on discrete choice models at the plot level, our model considers a farm level strategy. This implies that our theoretical modeling framework is closely related to the models commonly used for empirically investigating farmers’ acreage choices, either in the multicrop econometric literature or in the mathematical programming literature. We provide original results aimed at characterizing the properties of optimal acreage choices accounting for crop rotation effects and constraints in an uncertain context. Using a stochastic programming approach together with a Lagrangian approach we show that optimal dynamic acreage choices can be formally characterized as static acreage choices with contingent renting/lending markets for acreages with specific preceding crops. The crop rotation constraint Lagrange multipliers provide the renting/lending prices of acreages with specific crop histories. The results presented in the article are mainly theoretical. Our modeling framework can easily be implemented in practice since it mainly considers quadratic programming problems and their solution functions.

Keywords: crop rotation; constrained optimization; dynamic programming; stochastic programming; dynamic acreage choice model (search for similar items in EconPapers)
JEL-codes: C61 D21 D24 D92 Q12 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:201504

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