OPTIMAL LAND MANAGEMENT WITH MULTIPLE CROPS

Abstract. This paper examines the optimal management of agricultural land through the use of non-crop inputs, such as fertiliser, and land uses that either degrade or restore productivity. We demonstrate the need to consider the relative total asset value of alternative crops over time. It is shown that higher prices for crops that degrade the resource base should motivate the use of short rotations with a remedial phase. An inability of land markets to reflect differences in resource quality and low capital malleability promote greater degradation. However, substitution of complementary effects through input usage may help to sustain productivity. These factors are discussed in the context of crop sequence management in Western Australian cropping systems.