Integrating agricultural research and policy analysis: analytical framework and policy applications for bio-economic modelling

Interdisciplinary approaches to identify suitable incentives for enhancing sustainable natural resource use require an analytical framework that satisfies both practical purposes of policy support and disciplinary requirements regarding the specification of underlying technical and behavioural relations. Different approaches for agricultural policy analysis are distinguished according to the nature of problems addressed and the analytical procedures applied. Major drawbacks of more disciplinary analysis can be circumvented through functional integration of these approaches. The methodological foundations of an integrated bio-economic modelling framework for the simultaneous appraisal of agro-ecological and socio- economic parameters are presented, and assumptions on farm household decision making regarding crop and technology choice, labour use, market exchange and price responsiveness are discussed. Implications of this integrated approach are analysed against the background of policy discussions on land markets, incentives for innovation, and public investment for agricultural intensification. Policy analysis for sustainable land use proves to be critically dependent on the specification of the linkages between decision-making procedures regarding resource allocation by farm households and their supply response to changes in the economic and institutional environment.     

Sustainable land use and food security in developing countries: DLV's approach to policy support

During the past decades, major changes have taken place with regard to the available policy instruments for food security and rural development. These changes are reviewed against the background of the structural adjustment programmes carried out in the agricultural sector. The linkages between agricultural policy and farmers' supply response are discussed, emphasizing the influence of macro-policy for decision-making at the micro-level of a farm household. An integrated bio-economic modelling framework is presented that allows a better understanding of the effects of macro and sectoral policy interventions for food security and sustainable land use at the farm and (sub)regional level. Critical areas where the understanding of macro–micro linkages is still weak are identified. Major conclusions regarding a suitable analytical framework for policy analysis and support are presented.     

Modelling the interactions between regional farming structure, nitrogen losses and environmental regulation

Changes in the structure of agriculture are known to affect emissions of environmental pollutants from agriculture. Such changes are often driven by structural changes in agricultural production, so structural changes are likely to have indirect effects on emissions. In a pilot study, we consider how linking two complementary simulation models might be used to explore these effects. The agent-based AgriPoliS model was used to simulate the structural dynamics of agricultural production. The results from AgriPoliS were passed via a number of intermediate models to the Farm-N model, which was used to estimate the nitrogen surplus and losses from each farm for each year.The modelling complex was exercised by simulating the effects of two plausible policy scenarios for each of 14 years. The initial sizes and types of farms were based on statistics from a region in Denmark and the farms were randomly distributed within this region. The reference scenario (REF) implemented the current area-based Common Agricultural Policy payments for Denmark. The 1 LU scenario applied the additional constraint that a minimum area of 1 ha land had to be available for the application of the manure produced by one livestock unit.Substantial changes in the structure of agricultural production were shown for both scenarios. The effect on the regional nitrogen surpluses was predicted to differ between scenarios and the contribution of the different farm types to change with time. Predicted ammonia emission changed with time and differed between the scenarios, whereas the Danish fertiliser and manure legislation meant that nitrate leaching remained fairly stable.The implementation of additional environmental legislation significantly changed the trajectory of structural adjustment processes. Results emphasize the complex interplay between structural changes, losses of nitrogen, and environmental regulation.It is concluded that the effects of structural change on environmental emissions can be usefully explored by linking agent-based models of farmers’ investment decisions with other models describing nutrient losses from the farm and that such modelling can play a useful role in designing effective environmental policies for agriculture. However, the approach demands the availability or collection of many region-specific data and this could create a barrier to its use.     

Identifying the value of pasture improvement using wholefarm modelling

The economic value of pasture improvement in a farming system in a Mediterranean-type environment is assessed using farm modelling. Bioeconomic modelling combined with sensitivity analysis is used to explore how new annual legume species may impact on farm profit and land use. If introduced on all suitable soils the new pastures lead to a 26% increase in farm profit with an additional 12% of farm area being switched into pasture to support more livestock. However, stocking rates decline slightly, the enterprise mix becomes less diversified and several rotational changes are required. If the new pastures are only introduced on particular soils then farm profit increases by a lesser percentage and the pathways to additional profit vary, with both the pasture area and stocking rate either increasing or decreasing. To extract maximum profit from pasture improvement on any particular land management unit often requires management changes on other land management units, apart from those on which pasture improvement initially takes place. The economic value of pasture improvement is found to depend on the portfolio of pastures available for improvement and the nature and mix of the farm’s land management units.     

Regional impacts of abolishing direct payments: An integrated analysis in four European regions

The direct payment system of the Common Agricultural Policy (CAP) provides income transfers to European farmers. Recently, several countries including England and Sweden have advocated the elimination of direct payments after 2013. The extent to which an elimination of direct payments would affect the land use dynamics in Europe including impacts on structural change and the environment has not been addressed in the existing literature. In this paper, we combine participatory methods, to analyze regional preferences for functions and effects of agriculture, and farm-level modeling, to assess the impacts of such a policy change on farm structures and land use intensities in four European regions located in Germany, Denmark, Italy and Poland, each with different socio-economic and biophysical characteristics. In each region, the entire farm population consisting of different farm types with different production orientations and land management types was modeled under the presence and absence of direct payments using a combination of agent-based and bio-economic modeling. We found that the initial characteristics of the regions, such as the historical farm structure and regional site conditions, greatly influence the impact of direct support elimination and cause regionally different development trends. The results for the four regions were summarized in four specific storylines that emphasize how much the diversity of European regions matters for future policy decisions. An explicitly regional focus is, therefore, argued to be crucial to complement future policy analysis.     

A systems approach to analyse the effects of Flemish manure policy on structural changes and cost abatement in pig farming

Animal production in the Flemish region and pig production in particular is intensive and causing external problems related to manure disposal. At a regional level, manure disposal can be regarded as a problem of distributing the manure from farms with a surplus to farms with a shortage or to disposal alternatives. Total disposal costs will depend on the amount of manure surplus and on the location dependent disposal cost per unit. Disposal costs are an economic incentive for structural changes and cost abatement investments at farm level which will, in turn, influence the regional disposal. In order to simulate these interactions, an integrated system of models describing the regional manure disposal coordination system is developed, composed of a farm level component, an aggregation module and a regional disposal model. The possibilities for disposal cost abatement at farm level are analysed through LP modelling of representative farms. Incentives for structural change are derived from the shadow prices of the housing and land constraints in the model. Manure separation is analysed as an example of cost abatement investments.     

Policy reforms,rice production and sustainable land use in China: A macro–micro analysis

This paper presents a macro–micro analysis of the impact of policy reforms in China on agricultural production, input use and soil quality change for a major rice-producing area, namely Jiangxi province. This is done in three steps. First, a quantitative assessment is made of the impact of market liberalization policies on the economic environment of farm households in Jiangxi province. Econometric analyses based on provincial, national and world market data are used to explain changes in rice and fertilizer prices in Jiangxi province over time. Next, the impact of China’s recent income support policy and latest price trends on farm household choices with respect to activity choice (particularly rice and livestock) and input use (fertilizers, pesticides, manure) is assessed for two villages with different degrees of market access in north-east Jiangxi province. Two village-level general equilibrium models are used to analyse household decision-making and interactions between households within these villages. The parameters are estimated and calibrated from an extensive survey held in these villages in the year 2000. Finally, the impact of land tenure policy on farm management decisions (labour, manure and chemical input use), soil quality (available P and K and total N and C) and rice yields is analysed through an econometric analysis of plot-level data for three villages. Two-stage least squares (2SLS) is used to control for interactions with yields and for feedbacks towards input use. The paper ends with a number of suggestions for policy adjustments that would reduce the problem of natural soil compaction in the research area.     

Systems approaches for the design of sustainable agro-ecosystems

The complexity of agricultural systems and the need to fulfil multiple objectives in sustainable agro-ecosystems call for interdisciplinary analyzes and input from a wide variety of disciplines in order to better understand the complete agronomic production system. Systems approaches have been developed to support these interdisciplinary studies; their development and use have increased strongly in the past decades. Agronomic systems have pronounced spatial and temporal dimensions. Spatial aspects can be distinguished at crop, field, farm, regional and higher levels while processes at each spatial level have characteristic temporal components. Systems analysis in agronomic systems implies the use of various types of knowledge, such as expert knowledge including stakeholder expertise and knowledge derived from scientific measurements and model-simulations. The latter two can be derived from different types of studies: simple, rapid and cheap procedures, which are often relatively unreliable, at one end of the scale and complex, cumbersome and expensive data-intensive procedures at the other end. Selection of proper procedures for specific issues, both in terms of measurements and in applying simulation models, needs attention. Each problem requires its own research approach. Based on the output requirements and data availability, the proper systems approach has to be selected. Examples of these different procedures are given in this paper. Considering the type of problems to be studied in agronomic systems, different procedures can be followed to address the issues raised at a specific scale. These procedures start with a proper analysis of the system followed by studies that are projectory, exploratory, predictive, or are focused on decision support. Examples will be provided. Increasingly, systems approaches include stakeholders to fine-tune problem definition, the research itself, and the implementation of results. Stakeholders are farmers and citizens on farm and community levels and policy makers and planners at higher levels of aggregation. A comprehensive interdisciplinary analysis of agricultural production systems is seen as a necessary condition for the development of innovative, sustainable systems for the future. Systems for improving crop production systems are presented in this paper as well as applications of systems approaches at the farm and regional levels with emphasis on selecting the right approach.     

An LP-model to analyse economic and ecological sustainability on Dutch dairy farms: model presentation and application for experimental farm “de Marke”

Farm level modelling can be used to determine how farm management adjustments and environmental policy affect different sustainability indicators. In this paper indicators were included in a dairy farm LP (linear programming)-model to analyse the effects of environmental policy and management measures on economic and ecological sustainability on Dutch dairy farms. For analysing ecological sustainability, seven indicators were included in the model: eutrophication potential, nitrate concentration in groundwater, water use, acidification potential, global warming potential, terrestrial ecotoxicity, and aquatic ecotoxicity. Net farm income was included for measuring economic sustainability. The farm structure of “De Marke” formed the basis for three optimisations: (1) basis situation without environmental policy, (2) situation with Dutch environmental policy for 2004, and (3) situation with farm management measures applied at “De Marke”. The Dutch environmental policy was included to comply with the EC nitrate directive. It resulted in lower fertiliser use and consequently in a decrease in sales of maize. This led to a decrease in net farm income of ca. €2500. Including this policy improved most used ecological indicators (except for ecotoxicity) and showed to be an effective tool to reduce the environmental impact of dairy farming. Adapting the model with farm management measures applied at experimental farm “De Marke” resulted in even better ecological performance compared to the situation with environmental policy. Nonetheless this increase in ecological performance led to a considerably lower net farm income (€14,500).     

Economic evaluation of current and alternative dual-purpose cattle systems for smallholder farms in the central Peruvian highlands

In four communities in the Peruvian Andes, 56 farmers were interviewed every three months over a period of one year. Information linked to milk and cattle production such as activities, inputs (labour, means of production, capital) and outputs (milk, cheese, animals) were recorded using a closed-ended questionnaire. The communities were divided into two groups with low (LC) and high (HC) level of dependence on income from milk and animal sales. The survey results showed that cattle production on the LC farms was based on less land and a smaller herd (3.32 ha/farm, 1.06 lactating cows) than on HC farms (10.28 ha/farm, 4.19 lactating cows). The data from the survey and the results of the nutritional analyses of 74 feed samples were introduced into a model that applied linear programming techniques in order to estimate the farm household income under the current production systems and evaluate the economic impact of improved forage varieties for hay production. Furthermore, the economic viability of other changes in fodder and herd management was tested. Both groups were characterised by a dual-purpose system generating a gross income from the sale of both, milk and live animals in the amount of -21 (LC) and +1057 US$/farm and year (HC). Due to higher production costs for forages and better access to markets, LC communities were characterised by an integrated crop–livestock system whereas in the HC group income was mainly based on livestock. Introduction of improved and fertilized barley for hay production, was estimated to increase the annual farm income to 127 and 1257 US$ for LC and HC, respectively. This increase was accompanied by an increment of the animal number. Maintaining the animal number but increasing the milk production/cow by feeding additional forage was a less profitable option generating 50 and 1221 US$ of income per farm and year for LC and HC, respectively. The production of hay was limited by high costs (external labour) in LC communities and the restricted availability of family labour in the HC group. A scenario based on the use of improved cow genotypes led to the highest estimated annual farm income for HC communities (1280 US$) but was less favourable for LC. The modelling results showed that the best development strategy depends on various factors such as production costs, access to the markets and to irrigation and availability of different feed resources.     

Exploratory land use studies and their role in strategic policy making

To support the different phases of a policy making process aimed at changing land use, distinct types of land use studies are required. This paper focuses on exploratory land use studies and their role in the phase of formulating strategic policy objectives. Exploratory land use studies contribute to a transparent discussion on policy objectives by showing ultimate technical possibilities and consequences of imposing different priorities to agro-technical, food security, socio-economic and environmental objectives. A methodology is presented in which science-driven technical information is confronted with value-driven objectives under given values of exogenous variables (e.g. regarding population growth and requirements for agricultural produce). Land use scenarios are generated showing consequences of different priorities for objectives by using natural resources and technical possibilities in different ways. Applications of such an approach are given for the global, regional and farm level, each addressing specific questions and target groups. The paper focuses on the type of results these studies produce and their role in the societal and political debate on strategic land use policy and planning. It is concluded that if exploratory land use studies are carried out in true interaction with target groups, they may well contribute to the debate and learning on sustainable land use options and a purposeful identification of effective policy instruments in a next phase of the policy making process.     

Modelling multiple objectives of land use for sustainable development

Sustainability is a human-centred concept that comprises multiple aspects and objectives of different interest groups. Sustainable development is not readily measurable, except as a compromise between different parts of society, of which some may try to represent future generations of mankind. To determine a sustainable development path in the relationship between agriculture and its natural environment, a profound knowledge of this complex system and its behaviour under different socio-economic conditions is necessary. We present a modelling system which consists of a set of hierarchically linked modules. These modules describe production activities in a way that allows an economic and ecological analysis of these techniques. The heart of the modelling system is a multiple goal linear programming model, which is generated by data base modules. Simulation of single farm models as well as regional models based on simultaneously optimised farm types is possible. The modelling system appears to be a highly flexible tool with respect to the number and type of farms, sites and production techniques. Environmental objectives can easily be included and different levels of goal achievement can be simulated. It is well suited for single farm analysis as well as for regional models, for static as well as dynamic approaches. It allows rapid adoption of the model and rapid calculation of scenarios. Therefore, it is suited for use in interactive environments with users which are interested in repeated runs with little changes in the goal function, prices, subsidies or technical coefficients. The results can be used for policy decisions as well as the strategic planning of individual farmers. Applications of the modelling system will be presented in following papers. In this paper the kind of information the model can generate and the circumstances of their usage are shown. ©     

Agrarian transition and lowland–upland interactions in mountain areas in northern Vietnam: application of a multi-agent simulation model

The agrarian transition that accompanied the decollectivisation of agriculture in the northern Vietnam uplands challenges traditional approaches to land use analysis. In the 1980s, a series of reforms progressively returned means of production to individual farmers. Over the same period the mountains in the study area lost 50% of their forest cover. This paper provides an overview of the impact of changes in government policies on farmers’ practices, on land use, and on environmental dynamics. It applies a multi-agent simulation model to validate the hypotheses derived from household survey and remote sensing data about the mechanisms linking the allocation of paddyland to farm households with shifting cultivation on the hillsides, and deforestation. The model explains the diversity of the current land use systems by analysing the interactions between land tenure policies in the lower part of the toposequence and the dynamics of land use in the upper part. The findings are based on an extensive diagnostic survey of a number of representative sites, on generation of primary data from an intensive survey of 50 randomly selected households, and on insights gained by the authors during their long association with an action research project using a participatory observation method. The authors also explore whether the modelling approach can capture the main features of complex human-environment interactions of a site and can help apply the findings to the broader agroecosystem the site represents.     

An integrated modelling toolbox for water resources assessment and management in highland catchments: Model description

Water and land resource competition and environmental degradation pose difficult questions for resource managers. In particular, the ensuing trade-offs between economic, environmental, and social factors and their spatiotemporal variability must be considered when implementing management policies. This paper describes an integrated modelling toolbox that has been developed for highland catchments – specifically the Mae Chaem catchment in Northern Thailand. This toolbox contains models of crop growth, erosion and rainfall-runoff, as well as household decision and socioeconomic impact models. The approach described advances and complements previous approaches by: considering more complex interactions between land-use decisions and the hydrological cycle; modelling household decisions based on uncertain expectations; and assessing impacts of changes not only on flows and household income, but also on subsistence production and erosion. An example of the types of trade-offs and scenarios that can be assessed using the integrated modelling toolbox is also presented. This demonstrates that for the scenarios presented, the magnitude and direction of impacts simulated by the model is not dependent on climate. Further testing of the model is demonstrated in a companion paper. Overall, the plausibility of the model is shown.     

论我国农业机械化的几个关系

论述了我国农业机械化进程中发生的农业机械化与合作化、人多地少、精耕细作、生态农业、包产到户等关系的争论与实践;对农业机械化与社会进步和经济发展,机电动力与劳力、畜力,农机与农艺,农业机械化与经济效益、规模经营、地区差别等关系进行了研究,提出了正确处理的原则或方针。还根据市场经济体系的建设和农村经济的发展,提出了农业机械化的新特点与新任务。     

Quantitative analysis of farming systems for policy formulation: development of new tools

The debate on land use policy is often turbid, due to a focus on policy means despite the absence of explicit policy objectives. To increase transparency of policy formulation, scientific tools can be used that make explicit possible trade-offs among policy objectives and uncertainties on effects of policy means. During the last decade, tools have been developed based on quantitative systems analysis (QSA) with the purpose of stimulating more fact-driven judgement of agricultural production systems that can contribute to rural development. These tools can be used in different phases of policy formulation to address different policy questions with various time and spatial scales. This paper describes a new QSA tool developed and applied in a case study in South Mali which addressed short-term effects of various policy instruments at farm level. The complementary role of this predictive QSA tool compared with tools that explore strategic land use options and consequences of conflicting aims is discussed. The potential of QSA tools in the policy formulation process is discussed and suggestions are made to enhance their impact.     

Quantification of aggregation bias in regional agricultural land use models: application to Guácimo county,Costa Rica

Different specifications of a land use model for Guácimo county in Costa Rica were used to quantify various sources of aggregation bias, including variation in farm resource endowments within and between representative farm classes; spatially variable prices; and labor market inter-dependencies between farm classes. The results indicate that adequate treatment of the farm level in regional land use analysis requires proper classification of individual farms in representative farm classes, as well as explicit modelling of inter-dependencies between such classes. Aggregation bias introduced by the assumption of spatially fixed farm-gate prices is insignificant for regions with reasonable infrastructure quality and relatively small distances between farms and markets. Aggregation bias caused by variation in resource endowments within farm classes cannot be eliminated, but should be minimized, underscoring the importance of a proper farm classification.     

Decision models for optimal cropping patterns in irrigations based on crop water production functions

A study was conducted to demonstrate the usefulness of alternative levels of water use over the fixed yield approach when there is a constraint on water. In the multi-crop farm models used, a water production function for each crop could be included so that one has the choice of selecting alternative levels of water use depending upon water availability. Water production functions (square root and quadratic type) for seven crops, viz. wheat, gram, mustard, berseem, sugarcane, paddy and cotton, based on experimental data from irrigated crops were used.The fixed yield model was modified incorporating the stepwise water production functions using a separable programming technique. The models were applied on a selected canal command area and optimal cropping patterns determined. Sensitivity analysis for land and water resources was also conducted. The water production function approach gives better possibilities of deciding upon land and water resources.     

Typology of cereal-sheep farming systems in Castile-La Mancha (south-central Spain)

There is still no pan-European assessment of the typology of low-intensity farming systems and of the changes which they are undergoing under current European Union (EU) farm policy. This study examines the variability of farm structure and farming practices of a typical cereal-sheep farming system under continental Mediterranean conditions with the aim of providing regional data of policy relevance. The collection of quantitative and qualitative data was planned with collaborative effort from regional extension agencies and followed the Delphi technique. Arable land in Castile-La Mancha occupied more than 70% of total agricultural land in 1997, the rest being natural pasture, shrub-steppe, and Mediterranean forest. Dry low-intensity arable systems still included a sizeable proportion of fallow to cropped land (20%) or somewhat more than 1,000,000 ha, and the winter cereal stubble was often grazed by sheep. These systems were of low intensity in the sense that they used low inputs per ha, particularly of nutrients and agrochemicals. They involved the exploitation of land, particularly for grazing, on an open and large scale. In this sense, they can also be considered extensive systems. On average, only 20% of arable farmers kept sheep, while 80% of the sheep producers were landless pastoralists. Young farmers tend to be disinclined to became involved in the sheep sector, because of the harsh working conditions of sheep farming operations. Response to new economic circumstances involved the evolution of traditional practices with corresponding lower use of farm labour. Although still low-intensive, these systems can be considered as modified forms of traditional practices which have responded to new technologies and the need to cut labour costs. The new objectives for agriculture in Castile-La Mancha, must create or maintain a way of life that is socially and economically attractive to young farmers, without the acceptance of environmentally damaging practices. These new objectives will require a new regionally-targeted EU aid scheme. In turn, there is a need to understand regional agriculture systems before we can hope to achieve successful policy.