The Economics of Soil Nutrient Stocks and Cattle Ranching in the Tropics: Optimal Pasture Degradation in Humid Costa Rica

Posted: 20 Jun 2000

See all articles by Erwin H. Bulte

Erwin H. Bulte

Tilburg University - Department of Economics; Wageningen University

B.A.M. Bouman

International Rice Research Institute

R.A.J. Plant

Wageningen UR

A. Nieuwenhuyse

REPOSA; Wageningen Agricultural University-CATIE-MAG

H.G.P. Jansen

Agricultural Economics Research Institute (LEI)

Abstract

We present a model that can be used to analyse economically optimal nutrient (nitrogen) stocks in agricultural lands. The model is applied to study cattle ranching in humid Costa Rica. The numerical results indicate that, for current meat prices and discount rate, it is privately optimal to 'mine' soil nitrogen. In the long run, efficiency is consistent with degraded and abandoned pastures, as observed in the study region. Sustainable pasture management is economically efficient only for a discount rate close to zero or for meat prices at about twice the highest recorded value in 1985-1997. The results highlight the potential conflict between sustainability and economic efficiency. Caveats and externalities that are not included in our model are discussed.

JEL Classification: Q12, Q16

Suggested Citation

Bulte, Erwin H. and Bouman, B.A.M. and Plant, R.A.J. and Nieuwenhuyse, A. and Jansen, H.G.P., The Economics of Soil Nutrient Stocks and Cattle Ranching in the Tropics: Optimal Pasture Degradation in Humid Costa Rica. Available at SSRN: https://ssrn.com/abstract=231745

Erwin H. Bulte (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 9111 (Phone)

Wageningen University

Hollandseweg 1
6706 KN
Wageningen
Netherlands

B.A.M. Bouman

International Rice Research Institute

Makati City
Philippines

R.A.J. Plant

Wageningen UR

Hollandseweg 1
6706 KN
Wageningen
Netherlands

A. Nieuwenhuyse

REPOSA

Guapiles
Costa Rica

Wageningen Agricultural University-CATIE-MAG

Hollandseweg 1
6706 KN
Wageningen
Netherlands

H.G.P. Jansen

Agricultural Economics Research Institute (LEI)

Burgemeester Patijnlaan 19
The Hague, 2502 LS
Netherlands

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