Thursday, June 13th 2024

Chloé Antoine will present “Agricultural productivity and biodiversity effects: theory and evidence”, joint Jean-Marc Bourgeon (PSAE) and José De Sousa (Université de Paris Panthéon-Assas).

Abstract:

Agricultural specialization on the most suitable crop allows farmers to make the most of local land characteristics, but it also amplifies the proliferation of pests, thereby requiring heavy pesticide use. Given the negative externalities associated with these chemicals, ecological theory suggests reducing specialization to leverage natural pest control. This paper examines the economic desirability of such proposal by quantifying the productivity gains achievable through diversification. We develop a model of endogenous crop resilience that incorporates concentration effects and derive the equilibrium distribution of land among crops resulting from individual farmers’ choices. Using disaggregated data and novel instrumental variables, we then estimate the reduced-form equation for crop productivity provided by the model on a global scale. Results indicate that both same-crop and inter-crop effects matter. Notably, we demonstrate that agricultural diversity has a positive and large impact on yields of major crops like maize, rice, and wheat.