Managing soil natural capital: An effective strategy for mitigating future agricultural risks?

Ronggang Cong, Katarina Hedlund, Hans Andersson, Mark Brady

Research output: Contribution to journalArticlepeer-review

25 Citations (SciVal)


Uncontrollable events such as adverse weather and volatile prices present considerable risks for arable farmers. Soil natural capital, which views the capacity of soil biodiversity to generate ecosystem services as a component of farm capital, could be important for the stability and resilience of arable production systems. We investigate therefore whether managing soil natural capital could be an effective strategy for mitigating future agricultural risks. We do this by constructing a dynamic stochastic portfolio model to optimize the stock of soil organic carbon (SOC)—our indicator of soil natural capital—when considering both the risks and returns from farming. SOC is controlled via the spatial and temporal allocation of cash
crops and an illustrative replenishing land use. We find that higher soil natural capital buffers yield variance against adverse weather and reduces reliance on external inputs. Managing soil natural capital has therefore the potential to mitigate two serious agricultural risks: energy price shocks and adverse weather events, both of which are likely to be exacerbated in the future due to, e.g., globalization and climate change.
Original languageEnglish
Pages (from-to)30-39
JournalAgricultural Systems
Publication statusPublished - 2014

Subject classification (UKÄ)

  • Biological Sciences
  • Earth and Related Environmental Sciences


  • Soil ecosystem services
  • Copula model
  • Dynamic portfolio theory
  • Soil organic carbon
  • Sustainable agriculture
  • Resilience


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