STRESS, SHOCK AND THE SUSTAINABILITY OF RESOURCE USE IN SEMIARID ENVIRONMENTS

This paper considers the overgrazing problem in low income countries, paying special attention to the joint influence of the economic and na tural ''environments'' within which livestock farmers operate. The con text is the argument that liberalisation of agricultural product marke ts will encourage the sustainable use of environmental resources. The paper explores the link between economic conditions and ecologically s ustainable use of resources in semi-arid lands, using an infinite-hori zon stochastic control range management model. The approach makes it p ossible to establish, for any given initial conditions, whether there exists an optimal policy that is ecologically sustainable under those conditions, and what economic environment and initial endowments would be sustainable.