Exploring long-term land improvements under land tenure insecurity

This article explores long-term land improvement (lime application) under land tenure insecurity on leased land. The dynamic optimisation problem is solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represent Finnish soil quality and production conditions. The farmer's decision rules are solved for alternative likelihood scenarios over the continuation of the fixed term lease contract. The results suggest that, as the probability for non-renewal of the lease contract increases, farmers quickly decrease investments in irreversible land improvement and, thereafter, yields decline gradually. The estimated decision rules are a part of larger set of farmer's decision rules to be taken care when land leasing and environmental legislation is renewed.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/31954
Total Pages:
9
Series Statement:
Conference Paper




 Record created 2017-04-01, last modified 2017-11-21

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)