Journal Article

Stochastic Rangeland Use under Capital Constraints

Mimako Kobayashi, Richard E. Howitt, Lovell S. Jarvis and Emilio A. Laca

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 89, issue 3, pages 805-817
Published in print August 2007 | ISSN: 0002-9092
Published online August 2007 | e-ISSN: 1467-8276 | DOI: https://dx.doi.org/10.1111/j.1467-8276.2007.00981.x
Stochastic Rangeland Use under Capital Constraints

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  • Socialist Institutions and their Transitions
  • Agricultural Economics
  • Socialist Systems and Transitional Economies
  • Economic Development

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The stocking density on Kazakhstan's extensive rangelands is well below traditional levels. To analyze dynamic flock performance, we develop a stochastic dynamic programming model for livestock systems with stochastic forage production. The model contains continuous five state and 12 control variables, allowing improved characterization of the biophysical relationships and economic tradeoffs inherent in such systems. Most Kazakhstan herders have restricted access to capital. The model indicates that the cost of capital strongly affects flock size and productivity. We conclude that capital constraints are important to explaining the current low stocking density. Improving capital markets in rural areas warrants policy attention.

Keywords: extensive livestock production; Kazakhstan; stochastic dynamic programming; transition economies; O130; P210; P320; Q110; Q120

Journal Article.  7614 words.  Illustrated.

Subjects: Socialist Institutions and their Transitions ; Agricultural Economics ; Socialist Systems and Transitional Economies ; Economic Development

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