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Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector

Carl Gaigne, Julie Le Gallo (), Solène Larue and Bertrand Schmitt

No 208112, Working Papers from Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2)

Abstract: The well-known increase in the geographical concentration of hog production suggests the presence of agglomeration economies related to spatial spillovers and inter-dependencies among industries. In this paper, we examine whether the restrictions on land application of manure may weaken productivity gains arising from the agglomeration process. We develop a model of production showing the ambiguous spatial effect of land availability and the restriction on the manure application rate. Indeed, while the regulation of manure application triggers dispersion when manure is applied to land as a crop nutrient, it also prompts farmer to adopt manure treatment that favors agglomeration of hog production. Estimations of a reduced form of the spatial model with a spatial HAC procedure applied to data for French hog production for 1988 and 2000 confirm the ambiguous effect of land limitations induced by the restrictions on manure application. It does not prevent spatial concentration of hog production, and even boosts the role played by spatial spillovers in the agglomeration process.

Keywords: Environmental Economics and Policy; Livestock Production/Industries (search for similar items in EconPapers)
Date: 2011
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http://ageconsearch.umn.edu/record/208112/files/WP%20SMART-LERECO%2011-02.pdf (application/pdf)

Related works:
Journal Article: Does Regulation of Manure Land Application Work Against Agglomeration Economies? Theory and Evidence from the French Hog Sector (2012) Downloads
Working Paper: Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector (2011) Downloads
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