Economic Incentives for Entry and Exit in Gum Arabic Agroforestry System in Sudan

Afaf H. Rahim, Ekko van Ierland and Justus Wesseler

No 25720, 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists

Abstract: The gum tree (Acacia senegal) in the Sahel-Sudan zone has many environmental benign functions. An important function is to control desertification. In this paper we analyze farmers' economic incentives to preserve the existing gum trees and their incentives to create new plantations using a real options approach. Results indicate that agricultural crops provide higher economic benefits as compared to gum agroforestry system. However, on the one hand, as gum arabic is produced during the dry period and land is abundant, there are low incentives for deforestation. Instead, farmers' tend to leave the land idle and let the tree growing. On the other hand, our results suggest that an increase in the prices of gum arabic of about 330 per cent is needed to induce entry and a shift in land use system from continuous agricultural production to gum agroforestry system.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 16
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/25720/files/cp060104.pdf (application/pdf)

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:ags:iaae06:25720

DOI: 10.22004/ag.econ.25720

Access Statistics for this paper

More papers in 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().