Stress, shock and the sustainability of resource use in semi-arid environments

Abstract

This paper considers the overgrazing problem in low income countries, paying special attention to the joint influence of the economic and natural “environments” within which livestock farmers operate. The context is the argument that liberalisation of agricultural product markets will encourage the sustainable use of environmental resources. The paper explores the link between economic conditions and ecologically sustainable use of resources in semi-arid lands, using an infinite-horizon stochastic control range management model. The approach makes it possible to establish, for any given initial conditions, whether there exists an optimal policy that is ecologically sustainable under those conditions, and what economic environment and initial endowments would be sustainable.