TY - JOUR
T1 - Analyzing diversification possibilities on specialized tobacco farms in Argentina using a bio-economic farm model
AU - Chavez, M.D.
AU - Berentsen, P.B.M.
AU - Oude Lansink, A.G.J.M.
PY - 2014
Y1 - 2014
N2 - Tobacco (Nicotiana tabacum L.) is the non-food crop with the largest acreage in the world. Tobacco is criticized
because it causes health problems to its consumers and because production causes environmental
damage such as soil degradation, deforestation and water pollution. Diversification has been indicated as
the strategy for a sustainable economic development for farmers. In the specific case of Valle de Lerma,
many years of continuous tobacco mono-cropping, excessive ploughing and poor irrigation control have
caused soil degradation of the land used for tobacco. Tobacco farming in Salta also entails a production
and a price risk which is increasing because of uncertainty surrounding governmental subsidies. The
objective of this article is to assess the impact of diversification on expected farm income, income risk
and soil organic matter (as an indicator of soil degradation) on specialized tobacco farms.
To reach this objective, a quadratic programming model of a typical specialized tobacco farm is developed.
Soil organic matter is included in the model by means of the concept of the carbon balance. The
carbon balance is the difference between carbon supply and carbon decline in a year. Two different situations
with respect to soil degradation are evaluated using the model. The current situation includes no
restriction on carbon balance while the desired situation includes the restriction that the carbon balance
cannot be negative. So farmers’ choices are valuated with and without carbon balance constraints.
The model results for the current situation show that, no matter which risk attitude is used, the maximum
area of land given irrigation possibilities is devoted to tobacco, while the rest of the land is assigned
to the non-irrigated crop soybean. The carbon balance is negative and soil continues to degrade. In the
desired situation, tobacco and soybean are partly replaced by bull beef production (including the production
of alfalfa and maize for silage) to fulfill the requirement of a no negative carbon balance. As the risk
aversion coefficient in this situation increases, the low risk crop chickpea enters the solution and bull beef
decreases. The requirement of no further soil degradation comes at a high cost since gross margin of the
farm is decreased by some 35% compared to the current situation. Finally, the model is used to explore
the effects of an abolishment of governmental subsidies on tobacco. In this situation the production plan
consists of soybean, bull beef and tobacco in such a proportion that the carbon balance is positive. Income
effects of an abolishment of governmental subsidies on tobacco would be large as the gross margin of the
farm decreases by some 60%.
AB - Tobacco (Nicotiana tabacum L.) is the non-food crop with the largest acreage in the world. Tobacco is criticized
because it causes health problems to its consumers and because production causes environmental
damage such as soil degradation, deforestation and water pollution. Diversification has been indicated as
the strategy for a sustainable economic development for farmers. In the specific case of Valle de Lerma,
many years of continuous tobacco mono-cropping, excessive ploughing and poor irrigation control have
caused soil degradation of the land used for tobacco. Tobacco farming in Salta also entails a production
and a price risk which is increasing because of uncertainty surrounding governmental subsidies. The
objective of this article is to assess the impact of diversification on expected farm income, income risk
and soil organic matter (as an indicator of soil degradation) on specialized tobacco farms.
To reach this objective, a quadratic programming model of a typical specialized tobacco farm is developed.
Soil organic matter is included in the model by means of the concept of the carbon balance. The
carbon balance is the difference between carbon supply and carbon decline in a year. Two different situations
with respect to soil degradation are evaluated using the model. The current situation includes no
restriction on carbon balance while the desired situation includes the restriction that the carbon balance
cannot be negative. So farmers’ choices are valuated with and without carbon balance constraints.
The model results for the current situation show that, no matter which risk attitude is used, the maximum
area of land given irrigation possibilities is devoted to tobacco, while the rest of the land is assigned
to the non-irrigated crop soybean. The carbon balance is negative and soil continues to degrade. In the
desired situation, tobacco and soybean are partly replaced by bull beef production (including the production
of alfalfa and maize for silage) to fulfill the requirement of a no negative carbon balance. As the risk
aversion coefficient in this situation increases, the low risk crop chickpea enters the solution and bull beef
decreases. The requirement of no further soil degradation comes at a high cost since gross margin of the
farm is decreased by some 35% compared to the current situation. Finally, the model is used to explore
the effects of an abolishment of governmental subsidies on tobacco. In this situation the production plan
consists of soybean, bull beef and tobacco in such a proportion that the carbon balance is positive. Income
effects of an abolishment of governmental subsidies on tobacco would be large as the gross margin of the
farm decreases by some 60%.
KW - soil
KW - determinants
KW - carbon
U2 - 10.1016/j.agsy.2014.03.009
DO - 10.1016/j.agsy.2014.03.009
M3 - Article
SN - 0308-521X
VL - 128
SP - 35
EP - 43
JO - Agricultural Systems
JF - Agricultural Systems
ER -