We would like to thank David Colman, Charles Perrings, Pierre-Richard Agenor, Cesar Revoredo, Klaus Frohberg and two anonymous reviewers, and the editors, for comments on earlier drafts of this paper. We are also grateful to the UK Department of Environment, Food and Rural Affairs and the Centre for Ecology and Hydrology for permission to use data from the Farm Business Survey and the Countryside Survey, respectively.
Biodiversity Conservation and Productivity in Intensive Agricultural Systems
Version of Record online: 21 MAY 2007
Journal of Agricultural Economics
Volume 58, Issue 2, pages 308–329, June 2007
How to Cite
Omer, A., Pascual, U. and Russell, N. P. (2007), Biodiversity Conservation and Productivity in Intensive Agricultural Systems. Journal of Agricultural Economics, 58: 308–329. doi: 10.1111/j.1477-9552.2007.00091.x
- Issue online: 21 MAY 2007
- Version of Record online: 21 MAY 2007
- (Original submitted March 2006, revision received July 2006, accepted October 2006.)
- Agrobiodiversity economics;
- biodiversity loss;
- sustainable agricultural;
- technical change
This paper explores the economic effects of biodiversity loss on marketable agricultural output for intensive agricultural systems, which require an increasing level of artificial capital inputs. A theoretical bio-economic model is used to derive a hypothesis about the effect of the state of biodiversity on the optimal crop output both in the longer run and in the transitional path towards the steady-state equilibrium. The hypothesised positive relationship between biodiversity stock and optimal levels of crop output is empirically tested using a stochastic production frontier approach, based on data from a panel of UK specialised cereal farms for the period 1989–2000. The results support the theoretical hypothesis. Increases in biodiversity can lead to a continual outward shift in the output frontier (although at a decreasing rate), controlling for the relevant set of labour and capital inputs. Agricultural transition towards biodiversity conservation may be consistent with an increase in crop output in already biodiversity-poor modern agricultural landscapes.