Journal Article

Does Regulation of Manure Land Application Work Against Agglomeration Economies? Theory and Evidence from the French Hog Sector

Carl Gaigné, Julie Le Gallo, Solène Larue and Bertrand Schmitt

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 94, issue 1, pages 116-132
Published in print January 2012 | ISSN: 0002-9092
Published online November 2011 | e-ISSN: 1467-8276 | DOI: https://dx.doi.org/10.1093/ajae/aar121
Does Regulation of Manure Land Application Work Against Agglomeration Economies? Theory and Evidence from the French Hog Sector

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  • Environmental Economics
  • Urban, Rural, and Regional Economics
  • Agricultural Economics

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We examine whether the restrictions on manure land application weaken productivity gains arising from agglomeration in the hog sector. By developing a spatial model of production, we show that while regulating the manure application rate promotes dispersion ceteris paribus, it also prompts farmers to adopt systems of manure treatment that favor the agglomeration of hog production. We estimate a reduced form of the model with a spatial HAC procedure from French data. Our results suggest that land limitations induced by the restrictions on manure application do not favor the dispersion of hog production, and may boost agglomeration economies related to non-market spatial externalities.

Keywords: Hog production; Land availability; Manure application regulation; Agglomeration economies; Spatial econometrics; Q10; Q53; R12

Journal Article.  9531 words.  Illustrated.

Subjects: Environmental Economics ; Urban, Rural, and Regional Economics ; Agricultural Economics

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