Due to implementation of Structural Adjustment Programs, prices of agricultural products have increased in many developing countries. From an environmental point of view, it is an open question whether these price increases stimulate sustainable agriculture. In the context of a simple model that includes (labour intensive) investments in soil conservation, it is demonstrated that rising prices for agricultural outputs unambiguously increase soil conservation in the steady state. With imperfect labour markets, the reverse effect may occur, giving rise to a conflict between agricultural reform programs and soil conservation.
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