Fertilizer prices and deforestation in Africa

Yacouba Kassouri

Food Policy, 2024, vol. 126, issue C

Abstract: This study explores the impact of fertilizer (urea) prices on local deforestation by exploiting the exogenous variation in the world price of urea inclusive of trade costs from the world market to the local market. The empirical analysis relies on a unique geo-coded dataset on the market price of urea across 158 subnational hub markets in 21 African countries and satellite-derived forest loss estimates over the period 2003 – 2012. The results suggest that fertilizer prices positively affect deforestation rate and forest cover loss. On average, a 1 % increase in local urea prices corresponds to 97.65 Ha of forest loss within a particular local market catchment. Specifically, the results reveal a price elasticity of approximatively 1 between urea prices and forest loss. The heterogeneity analysis suggests that the effects of urea prices on forest loss tend to be concentrated in markets with subtropical and tropical ecological features. Furthermore, I provide evidence for the land-conversion mechanism, implying that urea prices are positively associated with the expansion of agricultural land. Estimating an event study around exposure to a sustained jump in urea prices reveals a persistent response of deforestation and forest cover loss to fertilizer prices.

Keywords: Urea prices; Deforestation; Forest loss; Crop prices (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030691922400085X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:126:y:2024:i:c:s030691922400085x

DOI: 10.1016/j.foodpol.2024.102674

Access Statistics for this article

Food Policy is currently edited by J. Kydd

More articles in Food Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().