A primer on implementing compressed simulated annealing for the optimisation of a constrained simulation model in Microsoft Excel

This short paper provides a simple introduction on how a simulation model implemented in Microsoft Excel® can be optimised using Visual Basic for Applications (VBA) programming and the compressed simulated annealing algorithm (Ohlmann et al., 2004; Ohlmann and Thomas, 2007). The standard simulated annealing procedure enters as a special case. Practical advice for determining the parameters that guide the stochastic search process in an annealing algorithm is also given.Research and Development/Tech Change/Emerging Technologies,

Optimal Dynamic Management of Agricultural Land-Uses: An Application of Regime Switching

The capacity of global agricultural production to meet increased demand for food from population growth and wealth accumulation is threatened by extensive land degradation. Nonetheless, previous research has focused primarily on the dynamic implications of input management and ignored land-use choice. This paper extends this theory through an examination of the intertemporal management of agricultural land through the use of non-crop inputs, such as fertilizer, and land uses that either degrade or restore productivity. The need to consider the relative total asset value of alternative crops over time is demonstrated. Moreover, higher output prices for degrading crops are shown to increase their relative value, motivating the later adoption of substitutes. An inability of land markets to reflect differences in resource quality and low capital malleability promote greater degradation. However, substitution of complementary effects through input use may help to sustain productivity. These factors are discussed in the context of crop sequence management in Western Australian cropping systems.crop sequences, land degradation, regime switching, International Development, Production Economics, Q15, Q24,

Combinatorial optimisation of a large, constrained simulation model: an application of compressed annealing

Simulation models are valuable tools in the analysis of complex, highly constrained economic systems unsuitable for solution by mathematical programming. However, model size may hamper the efforts of practitioners to efficiently identify the most valuable configurations. This paper investigates the efficacy of a new metaheuristic procedure, compressed annealing, for the solution of large, constrained systems. This algorithm is used to investigate the value of incorporating a sown annual pasture, French serradella (Ornithopus sativa Brot. cv. Cadiz), between extended cropping sequences in the central wheat belt of Western Australia. Compressed annealing is shown to be a reliable means of considering constraints in complex optimisation problems in agricultural economics. It is also highlighted that the value of serradella to dryland crop rotations increases with the initial weed burden and the profitability of livestock production.combinatorial optimisation, crop rotation, simulated annealing, Research Methods/ Statistical Methods, C63, Q15,

Evaluation of agri-environmental policies for water quality improvement accounting for firm heterogeneity

Policy makers worldwide are interested in the identification of cost-effective policy instruments to reduce diffuse pollution. A large economic model representing heterogeneous farms is used to evaluate a broad set of policies for reducing nitrate regulation within a large catchment dominated by dairy production. A policy instrument that allows the level of abatement to vary among producers according to differences in abatement cost is most cost-effective. The primary goal of 26 kg N ha⁻¹ can be achieved at a cost of $15 ha⁻¹ under this cap and trade policy, while a uniform cap on emissions for all farmers would be more than three times as expensive ($49 ha⁻¹). In contrast, requiring uniform reductions in stocking rate, banning the application of nitrogen fertiliser, and land retirement perform poorly. These instruments are at least three times more costly than a cap and trade policy over all simulated reductions. Moreover, the differentiated policy does not greatly alter the distribution of farm profit, relative to what exists without regulation. The use of a large, complex economic model incorporating disaggregated farms provides unique insight into the economic benefits accruing to a differentiated policy

A mathematical optimisation model of a New Zealand dairy farm: The integrated dairy enterprise (IDEA) framework

Optimisation models are a key tool for the analysis of emerging policies, price sets, and technologies within grazing systems. A detailed nonlinear optimisation model of a New Zealand dairy farming system is described. The framework is notable for its rich portrayal of pasture and cow biology that add substantial descriptive power to standard approaches. Key processes incorporated in the model include: (1) pasture growth and digestibility that differ with residual pasture mass and rotation length, (2) pasture utilisation that varies by stocking rate, and (3) different levels of intake regulation. Model output is shown to closely match data from a more detailed simulation model (deviations between 0 and 5 per cent) and survey data (deviations between 1 and 11 per cent), providing confidence in its predictive capacity. Use of the model is demonstrated in an empirical application investigating the relative profitability of production systems involving different amounts of imported feed under price variation. The case study indicates superior profitability associated with the use of a moderate level of imported supplement, with Operating Profit ($NZ ha-1) of 934, 926, 1186, 1314, and 1093 when imported feed makes up 0, 5, 10, 20 and 30 per cent of the diet, respectively. Stocking rate and milk production per cow increase by 35 and 29 per cent, respectively, as the proportion of imported feed increases from 0 to 30 per cent of the diet. Pasture utilisation increases with stocking rate. Accordingly, pasture eaten and nitrogen fertiliser application increase by 20 and 213 per cent, respectively, as the proportion of imported feed increases from 0 to 30 per cent of the diet

Economic impacts of high labour cost and herbicide resistance for the management of annual barnyardgrass (Echinochloa crus-galli) in rice production in the Philippines

Implications of increasing labour cost and development of herbicide resistance for profitable weed management in Philippine rice farming systems are investigated. The study employs RIMPhil (Resistance and Integrated Management in the Philippines), a bioeconomic simulation model developed to provide a comprehensive assessment of integrated weed management programmes for the control of annual barnyardgrass (Echinochloa crus-galli) in rice crops. Results indicate that herbicide application will become increasingly economically attractive, relative to manual weeding, as labour cost increases. This is important since urban migration in the Philippines continues to increase the scarcity of rural labour. Results also show that the onset of herbicide resistance results in substantial losses in farm profit. It may be worthwhile for farmers to take management actions to prevent or delay the onset of herbicide resistance, provided that these changes are effective and not too costly. The study highlights the complexity of decision making about integrated weed management on rice farms in the Philippines.Barnyardgrass, Bioeconomic model, Herbicide resistance, Integrated weed management, Rice production, Crop Production/Industries, Farm Management, Research and Development/Tech Change/Emerging Technologies,

Factors that affect the use of herbicides in Philippine rice farming systems

This study involves the application of a random-effects double-hurdle model to survey data to identify the farm-level factors affecting the adoption and intensity of herbicide use in rice production in the Philippines. Results broadly indicate apparent differences in the degree to which important explanatory variables affect the intensity and adoption decisions. The age of the farmer, household size, and irrigation are the significant predictors influencing the decision of farmers to use herbicides, while economic variables such as the price of herbicides, total income of farmers, and the use of bank loans or credit are the highly significant factors determining the intensity of herbicide use. Significant determinants of both the adoption and intensity decisions are land ownership, farm area, and the method of crop establishment used. Results suggest that all of the identified significant predictors in both herbicide use decisions can be considered by the national government when designing policies to reduce excessive use of herbicides or to encourage the adoption of alternative methods of weed control. This is important because for small rice producers, like the majority of Filipino farmers, improved weed management techniques that build on their traditional practices and that are compatible with their resources will be more easily adopted by farmers, relative to those that require radical change to the entire farming system.Herbicide use, Double-hurdle model, Adoption, Rice farming system., Demand and Price Analysis,

RIMPhil: a bioeconomic model for integrated weed management of annual barnyardgrass (Echinochloa crus-galli) in Philippine rice farming systems

This paper describes a complex, dynamic simulation model that has been developed for the analysis of integrated weed management programmes for the control of annual barnyardgrass (Echinochloa crus-galli) in rice farming systems in the Philippines. Users of the model may simulate any feasible combination of 49 weed treatments options across wet and dry cropping seasons over 5, 10, 15, and 20 year periods, subject to a predetermined sequence of planting methods. The main outputs of the model include weed seed and plant densities and seasonal and annualised profit over the simulated planning horizon. Model output emphasises the substantial economic benefits associated with effective long-term weed management strategies. In addition, the most-profitable weed densities are found to be much lower than those usually recommended to producers, indicating the importance of considering economic factors in the formulation of management recommendations. Results broadly indicate that a mixture of chemical and non-chemical treatments provides good weed control in rice crops, and maximises long-term profit for systems where the main weed is annual barnyardgrass. However, the performance of this strategy is influenced by crop establishment method and weed density level. These indicative results emphasise the value of the model for guiding the efficient control of annual barnyardgrass in rice crops in the Philippines.Barnyardgrass, Bioeconomic model, Integrated weed management, Rice farming systems., Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management,

Drivers of landholder participation in tender programs for Australian biodiversity conservation

Conservation tender program have been widely applied to biodiversity conservation in Australia and internationally in recent decades. Increasing participation rates is critical to these schemes, as competition is required for the cost-effectiveness benefits of the tender system to be fully realized. However, knowledge relating to the drivers of landholder participation in tender programs is limited. This study aims to identify the relative importance of different drivers of participation in Victorian conservation tenders. The novel method of maximum entropy ordinal regression is used given the small sample size, and supplemented with qualitative data obtained through face-to-face interviews. The regression analysis reveals that strong relationships between agencies and landholders and a low administrative burden drive increased participation. The provision of education, support, and easily-integrated management practices, however, may drive lower participation, with landholders confident to undertake conservation activities independently of assistance. Some evidence emerges that ten-year contracts may be well-received. A key concern is low additionality in biodiversity benefits, with typical tender participants displaying a strong conservation ethic and high levels of management activity pre-participation. This work has shown that in conservation policies involving self-selection by participants, economic incentives for adoption may be less important than non-monetary drivers

The Optimal Recovery of a Semelparous Fish Population with Delayed Recruitment

Annual recruitment of the New Zealand longfin eel (Anguilla dieffenbachii) has decreased by around 75 percent since heavy levels of commercial fishing began in the early 1970s. Given the unsustainability of existing regulatory policy, a deterministic multiple-cohort bioeconomic model is developed and applied to this system to gain insight into the optimal age structure and harvest profile for this species. This model illustrates that the rapid recovery of this fishery would rely on the ability of managers to sufficiently limit the harvest of more valuable year classes to allow for the rebuilding of spawning biomass. The importance of decreasing the degree of exploitation within the fishable population and lessening the time that longfins are available to harvest through higher minimum weight restrictions is also highlighted. The need for conservative management is reinforced when uncertainty regarding the effect of exploitation on fecundity and barriers to the successful instigation of these policies are considered.Keywords: Theoretical and Empirical Bio-Economic Modelling, Fisheries Economic