The False Benefit of Less Land Use for Agriculture

We have passed “peak agricultural land”

• Land area devoted to food production has declined over the last few decades
• This is significant because until recently, agricultural land use rose exponentially to feed the world’s growing population
• Due to declining land use, more land can be returned to natural ecosystems, which are far more biodiverse than any farm
• In reality, this development bespeaks a massive malinvestment of capital

The Economics of Land Use

• Land is not scarce in a different sense from other economic goods: more of it can and has been produced.
• However, there is always a choice between tilling the land under cultivation more intensively and cultivating new lands
• Given the comparatively low cost of land and better investment opportunities elsewhere, farmers tend to increase their total acreage rather than develop more capital-intensive techniques

Malinvestments in Modern Agriculture

• After World War II, government subsidy programs led farmers to focus on maximizing output
• Subsidies were paid out by intervening to set a price far above the world market price
• Since the price farmers received no longer fell as quantity supplied rose, farmers across the Western countries invested heavily in intensive cultivation of whatever crops were subsidized
• This alone led the world to be swamped by the West's excess produce and caused world market prices to fall as production outpaced population growth
• The rise of the postwar inflationary monetary system amplified this tendency toward more intensive cultivation
• In general, it led to much more capital-intensive cultivation, as the inflationary system favored bank funding for capital investment in agriculture

Land Use Is Good

• Perhaps some animals will be driven out as the wilderness is cultivated, but other ecological systems will arise connected to farming and other land uses.
• If there are some ecological niches or systems that are completely incompatible with human land use, then there are only two options: either these systems will disappear because no one cares about them or environmentalists will care enough to do something to preserve them.

https://mises.org/wire/false-benefit-less-land-use-agriculture