Land supply and mobility

Land supply behaves as an isoelastic function of the real return to land (Lee and van der Mensbrugghe, 2001).

$$\quad \overline{\mathit{TE}}_{r,t}=\overline{\mathit{TE}}_{r,{t_0}} \left({\frac{W^{\overline{\mathit{TE}}}_{r,t}}{W^{\overline{\mathit{TE}}}_{r,{t_0}}}}\right)^{\sigma_{\overline{\mathit{TE}}}}$$

Regions are accordingly classified either as land-constrained or not, and different values of supply elasticities are assumed. The values of the elasticities are similar to those used in the LINKAGE model, i.e. 0.25 for land constrained countries and 1 for other countries. We thank Dominique van der Mensbrugghe for providing us information and advice on this point. The transformation elasticity of land mobility across sectors is set to 0.5. Land set-aside can be changed in the model which allows to take into account specific policies in the US and the EU.

Regions which are land-constrained must be designated in the aggregation process. The column “Scarce land” in the sheet “regions” allows to designate the regions concerned.

In the standard version of the model, land is considered as imperfectly mobile. Land substitution is ruled by a Constant Elasticity of Transformation function assigning land to the best remunerating agricultural productions with an elasticity of 0.5.