Uncertainty and sustainability in themanagement of semi–arid rangelands

We analyze a dynamic and stochastic ecological-economic model of grazingmanagement in semi-arid rangelands. The non-equilibrium ecosystem is driven bystochastic precipitation. A risk averse farmer chooses a grazing management strategyunder uncertainty such as to maximize expected utility from farming income. Grazingmanagement strategies are rules about which share of the rangeland is given rest dependingon the actual rainfall in that year. In a first step we determine the farmer’sshort-term optimal grazing management strategy. We show that a risk-averse farmerchooses a strategy such as to obtain insurance from the ecosystem: the optimal strategyreduces income variability, but yields less mean income than possible. In a second stepwe analyze the long-run ecological and economic impact of different strategies. We concludethat the more risk-averse a farmer is, the more conservative and sustainable is hisshort-term optimal grazing management strategy, even if he has no specific preference forthe distant future....