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Contribution of Agriculture to Deforestation in the Tropics: A Theoretical Investigation

African Review of Economics and Finance

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Title Contribution of Agriculture to Deforestation in the Tropics: A Theoretical Investigation
 
Creator Adu, G
Marbuah, G
Mensah, JT
 
Subject Agriculture, Deforestation, Optimal control
 
Description This paper compares the deforestation path taken by profit maximizing agricultural firms in tropical regions to the path that will maximize social welfare based on optimal control techniques. We set up a theoretical problem where the socially optimal deforestation path that maximizes the discounted sum of net benefit of forest land use to society diverges from that of a farmer. We arrived at this conclusion after solving for the optimal choice of deforestation for both the private farmer and a social planner. The key source of this divergence in deforestation path is that the cost of deforestation is external to the farmer. The paper concluded that the farmer’s deforestation path leads to socially suboptimal outcome. Fiscal policy measures and public ownerships are recommended to deal with externalities that are inherent in forest land use.

Keywords: Agriculture, Deforestation, Optimal control
 
Publisher Rhodes University
 
Contributor —
 
Date 2013-03-29
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.ajol.info/index.php/aref/article/view/86964
 
Source African Review of Economics and Finance; Vol 3, No 2 (2012); 1-12
2042-1478
 
Language eng
 
Relation https://www.ajol.info/index.php/aref/article/view/86964/76743
 
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