Land leasing, land degradation and agricultural productivity in Finland

This study analysed whether the land tenure insecurity problem has led to a decline in long-term land improvements (liming and phosphorus fertilization) under the Common Agricultural Policy (CAP) and Nordic production conditions in European Union (EU) countries such as Finland. The results suggests that under traditional cash lease contracts, which are encouraged by the existing land leasing regulations and agricultural subsidy programs, the land tenure insecurity problem on leased land reduces land improvements that have a long pay-back period. In particular, soil pH was found to be significantly lower on land cultivated under a lease contract compared to land owned by the farmers themselves. The results also indicate that land improvements could not be reversed by land markets, because land owners would otherwise have carried out land improvements even if not farming by themselves. To reveal the causality between land tenure and land improvements, the dynamic optimisation problem was solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represented Finnish soil quality and production conditions. The decision rules were solved for alternative likelihood scenarios over the continuation of the fixed-term lease contract. The results suggest that as the probability of non-renewal of the lease contract increases, farmers quickly reduce investments in irreversible land improvements and, thereafter, yields gradually decline. The simulations highlighted the observed trends of a decline in land improvements on land parcels that are cultivated under lease contracts. Land tenure has resulted in the neglect of land improvement in Finland. This study aimed to analyze whether these challenges could be resolved by a tax policy that encourages land sales. Using Finnish data, real estate tax and a temporal relaxation on the taxation of capital gains showed some potential for the restructuring of land ownership. Potential sellers who could not be revealed by traditional logit models were identified with the latent class approach. Those landowners with an intention to sell even without a policy change were sensitive to temporal relaxation in the taxation of capital gains. In the long term, productivity and especially productivity growth are necessary conditions for the survival of farms and the food industry in Finland. Technical progress was found to drive the increase in productivity. The scale had only a moderate effect and for the whole study period (1976–2006) the effect was close to zero. Total factor productivity (TFP) increased, depending on the model, by 0.6–1.7% per year. The results demonstrated that the increase in productivity was hindered by the policy changes introduced in 1995. It is also evidenced that the increase in land leasing is connected to these policy changes. Land institutions and land tenure questions are essential in agricultural and rural policies on all levels, from local to international. Land ownership and land titles are commonly tied to fundamental political, economic and social questions. A fair resolution calls for innovative and new solutions both on national and international levels. However, this seems to be a problem when considering the application of EU regulations to member states inheriting divergent landownership structures and farming cultures. The contribution of this study is in describing the consequences of fitting EU agricultural policy to Finnish agricultural land tenure conditions and heritage.

Growth and Convergence: The case of China

Growth and Convergence: The Case of China Since the initiation of economic reforms in 1978, China has become one of the world’s fast-growing economies. The rapid growth, however, has not been shared equally across the different regions in China. The prominent feature of substantial differences in incomes and growth rates across the different Chinese regions has attracted the attention of many researchers. This book focuses on issues related to economic growth and convergence across the Chinese regions over the past three decades. The book has eight chapters. Apart from an introduction chapter and a concluding chapter, all the other chapters each deal with some certain aspects of the central issue of regional growth and convergence across China over the past three decades. The whole book is organized as follows. Chapter 1 provides an introduction to the basic issues involved in this book. Chapter 2 tests economic growth and convergence across 31 Chinese provinces during 1981-2005, based on the theoretical framework of the Solow growth model. Chapter 3 investigates the relationship between openness to foreign economic activities, such as foreign trade and foreign direct investment, and the regional economic growth in the case of China during 1981-2005. Chapter 4, based on data of 31 Chinese provinces over the period 1980-2004, presents new evidence on the effects of structural shocks and structural transformation on growth and convergence among the Chinese regions. Chapter 5, by building up an empirical model that takes account of different potential effects of foreign direct investment, focuses on the impacts of foreign direct investment on China’s regional economic performance and growth. Chapter 6 reconsiders the growth and convergence problem of the Chinese regions in an alternative theoretical framework with endogenous saving behavior and capital mobility across regions. Chapter 7, by building up a theoretical model concerning comparative advantage and transaction efficiency, focuses on one of the potential mechanisms through which China achieves its fast economic growth over the past few decades. Chapter 8 concludes the book by summarizing the results from the previous chapters and suggesting directions for further studies.

Tropical dryland agroforestry on clay soils: : Analysis of systems based on Acacia senegal in the Blue Nile region, Sudan

Acacia senegal, the gum arabic producing tree, is the most important component in traditional dryland agroforestry systems in the Blue Nile region, Sudan. The aim of the present study was to provide new knowledge on the potential use of A. senegal in dryland agroforestry systems on clay soils, as well as information on tree/crop interaction, and on silvicultural and management tools, with consideration on system productivity, nutrient cycling and sustainability. Moreover, the aim was also to clarify the intra-specific variation in the performance of A. senegal and, specifically, the adaptation of trees of different origin to the clay soils of the Blue Nile region. In agroforestry systems established at the beginning of the study, tree and crop growth, water use, gum and crop yields, nutrient cycling and system performance were investigated for a period of four years (1999 to 2002). Trees were grown at 5 x 5 m and 10 x 10 m spacing alone or in mixture with sorghum or sesame; crops were also grown in sole culture. The symbiotic biological N2 fixation by A. senegal was estimated using the 15N natural abundance (δ15N) procedure in eight provenances collected from different environments and soil types of the gum arabic belt and grown in clay soil in the Blue Nile region. Balanites aegyptiaca (a non-legume) was used as a non-N-fixing reference tree species, so as to allow 15N-based estimates of the proportion of the nitrogen in trees derived from the atmosphere. In the planted acacia trees, measurements were made on shoot growth, water-use efficiency (as assessed by the δ13C method) and (starting from the third year) gum production. Carbon isotope ratios were obtained from the leaves and branch wood samples. The agroforestry system design caused no statistically significant variation in water use, but the variation was highly significant between years, and the highest water use occurred in the years with high rainfall. No statistically significant differences were found in sorghum or sesame yields when intercropping and sole crop systems were compared (yield averages were 1.54 and 1.54 ha-1 for sorghum and 0.36 and 0.42 t ha-1 for sesame in the intercropped and mono-crop plots, respectively). Thus, at an early stage of agroforestry system management, A. senegal had no detrimental effect on crop yield, but the pattern of resource capture by trees and crops may change as the system matures. Intercropping resulted in taller trees and larger basal and crown diameters as compared to the development of sole trees. It also resulted in a higher land equivalent ratio. When gum yields were analysed it was found that a significant positive relationship existed between the second gum picking and the total gum yield. The second gum picking seems to be a decisive factor in gum production and could be used as an indicator for the total gum yield in a particular year. In trees, the concentrations of N and P were higher in leaves and roots, whereas the levels of K were higher in stems, branches and roots. Soil organic matter, N, P and K contents were highest in the upper soil stratum. There was some indication that the P content slightly increased in the topsoil as the agroforestry plantations aged. At a stocking of 400 trees ha-1 (5 x 5 m spacing), A. senegal accumulated in the biomass a total of 18, 1.21, 7.8 and 972 kg ha-1of N, P, K and OC, respectively. Trees contributed ca. 217 and 1500 kg ha-1 of K and OC, respectively, to the top 25-cm of soil over the first four years of intercropping. Acacia provenances of clay plain origin showed considerable variation in seed weight. They also had the lowest average seed weight as compared to the sandy soil (western) provenances. At the experimental site in the clay soil region, the clay provenances were distinctly superior to the sand provenances in all traits studied but especially in basal diameter and crown width, thus reflecting their adaptation to the environment. Values of δ13C, indicating water use efficiency, were higher in the sand soil group as compared to the clay one, both in leaves and in branch wood. This suggests that the sand provenances (with an average value of -28.07 ) displayed conservative water use and high drought tolerance. Of the clay provenances, the local one (Bout) displayed a highly negative (-29.31 ) value, which indicates less conservative water use that resulted in high productivity at this particular clay-soil site. Water use thus appeared to correspond to the environmental conditions prevailing at the original locations for these provenances. Results suggest that A. senegal provenances from the clay part of the gum belt are adapted for a faster growth rate and higher biomass and gum productivity as compared to provenances from sand regions. A strong negative relationship was found between the per-tree gum yield and water use efficiency, as indicated by δ13C. The differences in water use and gum production were greater among provenance groups than within them, suggesting that selection among rather than within provenances would result in distinct genetic gain in gum yield. The relative δ15N values ( ) were higher in B. aegyptiaca than in the N2-fixing acacia provenances. The amount of Ndfa increased significantly with age in all provenances, indicating that A. senegal is a potentially efficient nitrogen fixer and has an important role in t agroforestry development. The total above-ground contribution of fixed N to foliage growth in 4-year-old A. senegal trees was highest in the Rahad sand-soil provenance (46.7 kg N ha-1) and lowest in the Mazmoom clay-soil provenance (28.7 kg N ha-1). This study represents the first use of the δ15N method for estimating the N input by A. senegal in the gum belt of Sudan. Key words: Acacia senegal, agroforestry, clay plain, δ13C, δ15N, gum arabic, nutrient cycling, Ndfa, Sorghum bicolor, Sesamum indicum

Rural Income Generation and Diversification : A Case Study in Eastern Zambia

Rural income diversification has been found to be rather the norm than the exception in developing countries. Smallholder households tend to diversify their income sources because of the need to manage risks, secure a smooth flow of income, allocate surplus labour, respond to various kinds of market failures, and apply coping strategies. The Agricultural Household Model provides a theoretical rationale for income diversification in that rural households aim at maximising their utility. There are several elements involved, such as agricultural production for their own consumption and markets, leisure activities and income from non-farm sources. The aim of the present study is to enhance understanding of the processes of rural income generation and diversification in eastern Zambia. Specifically, it explores the relationship between household characteristics, asset endowments and income-generation patterns. According to the sustainable- rural-livelihoods framework, the assets a household possesses shape its capacity to seize new economic opportunities. The study is based on two surveys conducted among rural smallholder households in four districts of Eastern Province in Zambia in 1985/86 and 2003. Sixty-seven of the interviewed households were present in both surveys and this panel allows comparison between the two points of time. The initial descriptive analysis is complemented with an econometric analysis of the relationships between household assets and income sources. The results show that, on average, 30 per cent of the households income originated from sources outside their own agriculture. There was a slight increase in the proportion of non-farm income from 1985/86 to 2003, but total income clearly declined mainly on account of diminishing crop income. The land area the household was able to cultivate, which is often dependent on the available labour, was the most significant factor affecting both the household-income level and the diversification patterns. Diversification was, in most cases, a coping strategy rather than a voluntary choice. Measured as income/capita/day, all households were below the poverty line in 2003. The agricultural reforms in Zambia, combined with other trends such as changes in rainfall pattern, the worsening livestock situation and the incidence of human disease, had a negative impact on agricultural productivity and income between 1985/86 and 2003. Sources of non-farm income were closely linked to agriculture either upstream or downstream and the income they generated was not enough to compensate for the decline of agricultural income. Household assets and characteristics had a smaller impact on diversification patterns than expected, which could reflect the lack of opportunities in the remote rural environment.