Development policies, resource constraints, and agricultural expansion on the Philippine land frontier

Abstract

This paper examines ways in which development policies interact and influence incentives for agricultural expansion in frontier areas. We develop a model of household response to economic and technical stimuli, conditional on agronomic and household characteristics. We evaluate the model empirically using survey data gathered from low-income corn and vegetable farms near a national park in the southern Philippines. We find that within farms, land allocation is responsive to relative crop prices and yields. However, different crops elicit different responses. In particular, some crop expansion takes place primarily through land substitution and intensified input use, while changes in prices or yields of other crops induce an expansion of total farm area. Land and family labor constraint bind at different points for different crops. These results suggest that because multiple policies interact, environmental policies must have multiple strands in order to replace incentives to further land expansion.JEL codes: Q12, Q24, O13.