Will agricultural intensification

save tropical forests?Arild Angelsen

School of Economics and Business, Norwegian University of Life Sciences (UMB), Ås , Norway

& CIFOR , Bogor, Indonesia arild.angelsen@umb.no

Warzaw12.11.2013

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Three major roles of agriculture in climate change mitigation

1. Agric land encroaching forests (defor & A/R)

2. Fluxes on (existing) agric land

3. Substitution effects from changes in agric production (e.g. biofuel replacing fossil fue: l)

Focus only on 1., and ask one main question

Can/will agric intensification save forests?

Land consuming vs. land sparing (Jevons vs. Borlaug) (A related: land sharing vs. land sparing)

Agric intensification (increase output/ha = yield):– Technological progress (more outputs with same

inputs)

– Factor substitution (more inputs per ha)

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The Borlaug world(the full belly or subsistence model)

Food = Food

Food/pop * pop = Food/ag land * ag land

Subs req. * pop = yield * ag land

Ag land = (subs req * pop) / yield

Land = ag land + forests

A simple theory of deforestation

Þ Ag intensification (higher yield) reduce need for ag land => less encroachment into natural forests

Þ Can be apllied at various scales (e.g. global food equation)

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Example: cereals

1961-63 2006-08 Pct . increase

Demand

Pop (bn) 3.13 6.62 111.6

Consumption(kg per capita)

294.3 358.3 21.8

Supply

Area harvested (mill ha)

653.7 697.2 6.7

Yield 1.41 3.40 141.5

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Source: Stevenson et al. (2011), based on: http://data.un.org/

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The Jevon world: (A market/partial equilibrium/von Thünen model)

Define ag rent per ha as

profit = gross sales – costs

r = py – wl – qk –vd

p(rice), y(ield), w(age), l(abour) per ha, q(cost of k), k(capital), v(distance costs per km & ha), d(istance)

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Deforestation (d)

Ag rent

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Policy: reduce ag rent: Lower yield will save the forest!

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Can the two worlds be reconciled?

Two very different logics– Subsistence model and global food equation:

higher yield saves forests

– von Thünen model: higher yield gives encroachments into forests

How can they be reconciled?

1. Extending global food equation

2. Market demand conditions

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National deforestation equation (NDE) (Angelsen, 2010)

Pop * (Food cons/Pop) = (Food cons/Food prod) * (Food prod/Ag prod) * (Ag prod/Ag land) * (Ag land/Forest) * Forest

deforestation ≈ pop growth + ∆ food cons per capita - ∆ self-sufficiency ratio (inverse) - ∆food share - ∆yield - ∆ag/forest ratio

Þ One among several factors

Þ Yield change can affect other factors:Þ Self sufficiency (more competitive)

Þ Food share, e.g. biofuel

Þ Be careful with identities: Þ they are always correct (a warning sign!)

Þ cannot assume ceteris paribus (other factors will change)

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It’s the demand elasticity, stupid!

Demand elasticity: how sensitive is demand to price changes (1% ∆ price => x% ∆ quantity)

What is the impact of technological change (supply shift)?

Inelastic (quantity given – 1. Borlaug world: B) vs. Elastic (price given – 2. Jevons/von Thünen world: C)

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Perfectly inelastic demand

Perfectly elastic demand

SupplySupply after tech progress

A=B C

Price

Quantity

B

A=C

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What is the demand elasticity?

Depends on:

How widespread is the tech change; market share

Scale of analysis: – The higher scale, the more inelastic demand

Type of commodity:– Inelastic: food

– Elastic: non-food with substitution (e.g. rubber, biofuel)

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Empirical studies – macro level

Area & yield links at national level over time (by crop or total)

Ewers et al. (2009):– 23 staple crops, 1979-1999, 124 countries

– The yield-area elasticity

– Borlaug hypotheses: -1

– Developing countries: -0.152 (t=-1.78)

– Developed countries: -0.089 (t=-0.57)

– Weaker and non-significant for total cropland

– Weak tendency in developing countries for the per capita area to decline as cropland increase

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… empirical studies

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filled: developing; countries open: developed countries

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Case studies summary

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Reduced(win-win)

Impact on deforestation

Increased(win-lose)

Intensive (high)

L & K intensity Saving (low)

Constrained Farmer characteristics

Well-off

Local Output market Global

Yield increasing

Technology Cost-saving

Local, segmented

Labour market Mobile (migration)

Intensive (lowland)

Sector experiencing tech.

change

Frontiers (upland)

Global Scale of adaptation

Local

Short term Time horizon Long term

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Win-win outcomes

Agricultural technologies suited specifically for forest-poor areas

Labour-intensive technologies where labour is scarce and migration limited

Promote intensive systems where farmers are also involved in low-yielding extensive farming practices

Agricultural technologies that substantially raise the aggregate supply of products with inelastic demand

BUT, some of win-win technologies are least likely to be adopted by farmers

– Produce commodities for local markets where prices quickly drop

– Choose technologies that use the most scarce resources intensively

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Win-lose outcomes

Agricultural technologies that encourage production systems that require little labour and/or displace labour

New agricultural products for sale in large markets in labour-abundant contexts

Eradication of diseases that limit agricultural expansion

Technological changes in forest margin areas with rapidly growing labour forces

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Some trends

1. Globalization – increased market integration; more likely to be price takers

2. Deforestation driven by commercial actors

3. Separation of forest and agric land

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land sparing less likely

agric int. less important

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So what?

Mistake 1: assume that technological change & agric intensification will save forests

Mistake 2: be against new technologies & intensification because it may put pressure on forests

Agric intensification needed for a number of reasons, but forest conservation is not on top of that list

BUT, will enable and make other forest conservation measures more effective and politically feasible

It’s not the solution, but part of the package

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Deforestation policies – what works

Selective agric technologies

Agric rent in frontier areas– Roads

– Subsidies

Forest rent and its capture– Community management

– PES schemes

Regulations– Protected areas (enforcement)

– Land use planning

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Will agricultural intensification save tropical forests?

“… no one can guarantee that economic development – whether agriculturally driven or not – will lead to a forest transition and an end to inappropriate deforestation. Informed proactive policies will have to do that.”

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