A LAND DEMAND AND SUPPLY SYSTEM WITH ENDOGENOUS LAND PRICES IN THE CAPRI AGRICULTURAL SECTOR MODEL

Questions about land use change induced by policies impacting the agricultural sector such as bio-fuel mandates have clearly raised the interest of understanding to which extent changes in agricultural productions stem from the extensive margins – expansion of agricultural land cover – or from the intensive margin – changes in the special intensity which increase yields or stocking rates. Agricultural sector models being able to answer these questions in a consistent manner are still rare. In this paper, we develop a land demand and supply system with endogenous land prices in the CAPRI agricultural sector model.