Biodiversity Conservation and Productivity in Intensive Agricultural Systems

Authors

  • Amani Omer,

    1. Noel Russell and Amani Omer are with the Department of Economics, University of Manchester.
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  • Unai Pascual,

    1. Unai Pascual is with the Department of Land Economy, University of Cambridge, 19 Silver Street, Cambridge, CB3 9EP, UK.
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  • Noel P. Russell

    1. Noel Russell and Amani Omer are with the Department of Economics, University of Manchester.
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    • 1

      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.


E-mail: up211@cam.ac.uk

Abstract

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.

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