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

Warzaw 12.11.2013

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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

Ag intensification (higher yield) reduce need for ag land

=> less encroachment into natural forests

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

One among several factors

Yield change can affect other factors:

Self sufficiency (more competitive)

Food share, e.g. biofuel

Be careful with identities:

they are always correct (a warning sign!)

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

Supply

Supply 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 13

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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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