Socially Optimal Agricultural Erosion-Sedimentation Control Considering both Soil Conservation and Water Quality

Social concern about erosion and sedimentation arises principally from two factors. One factor is the future social costs in the form of reduced productivity that arise from erosion, while the second is the current and to some extent future social costs resulting from sediment pollution. This paper presents a dynamic non-linear optimization model that can be used to determine the socially optimal level of soil conservation when both of the above factors are considered. The objective function in the model is the present value of consumers' plus producers' surplus less off-site sediment damages, over a long planning horizon. The model is applied to a watershed that is fairly representative of the Corn Belt. Results indicate that substantially more soil conservation than presently occurs is justified from society's viewpoint

Simplified National Models - The Condensed Version of the Food and Agriculture Model System of the International Institute for Applied Systems Analysis

The aim of this paper is to give a concise description of the simplified national models as they were developed in the Food and Agriculture Program (FAP) at the International Institute for Applied Systems Analysis (IIASA). The work on these models was begun in September 1978 and by late summer 1979 the models had reached a preliminary working stage. The reasons for building such a simplified model system are manifold. First of all, it became apparent that the disaggregated and detailed models of all originally selected countries could not be completed by the end of the program. To provide a self-contained product the simplified version was set up at that time. This system is consistent with the detailed one, but works with a more condensed product list (10 commodity aggregates instead of the 19 envisaged for the detailed version), with a smaller set of countries and with substantially simplified supply and demand components. After completion, the more detailed and sophisticated models can be substituted for this simplified version and, therefore, the system will become more and more realistic. Although we are fully aware of the shortcomings of the simplified version, we hope that it will prove to be a useful demonstration tool. As such, the model will help to make the methodology used more understandable and to stress both its advantages and shortcomings. It also should be possible to indicate what kind of questions the FAP system will be able to answer. And finally, it should enable those modeling groups who complete their work in advance of other teams to link their model with the condensed version and thus test its performance. The paper is organized in the following way: Chapter 2 contains a description of those countries which are included in the simplified version. In Chapter 3 a brief explanation of the overall structure of the model system is given and the basic requirements for linking the system are outlined. Data sources and aggregation procedures are explained in Chapter 4. Chapter 5 contains a description of the production module used in this system; input levels in agriculture and the allocation model are explained, followed by a discussion of nonagricultural production. Finally, in Chapter 6 some remarks on the exchange module are made, particularly on the Expenditure Share System used for modeling national demand

Limits and Consequences of Agriculture and Food Production: A General Methodology for the Case Studies

This paper is one of a series in which the limits and consequences of agricultural production over a long time horizon are explored. A paper by Jaroslav Hirs (forthcoming) provides a general overview of the relationships between agricultural production technologies, resource use, and the environment. Whether the food and agriculture system will be able to meet current and future world agricultural demands is identified as the central question which motivates our examination of these relationships. In other words, what are the important relationships between these areas which will affect the stability and sustainability of the food and agricultural system in the long run. The paper also argues that the analysis must be performed on a national or regional level in the form of case studies because of the location specific nature of some of the key inputs. The purpose of the present paper is to formulate a general methodology to ensure that the case studies are comparable with one another. Comparability is understood to have elements of both similarity and dissimilarity. To be comparable, the various case studies must be similar in their general outline. That is they must view the problem from the same perspective, and address a similar set of questions. Use of a common modeling approach may further facilitate comparisons. At the same time it is both possible and expected that differences in detail and emphasis will be present within each particular study. Nonetheless, while it is recognized that each region or nation that will make up an individual case study has some unique features, we believe that all share sufficient common aspects to profit from following a common general methodology. In order to facilitate the outlining of a general methodology, this paper will be divided into three main sections. A definition and classification section, a section on questions to be addressed, and a section dealing with the proposed recursive dynamic model. The definition and classification section is designed to give a working definition of the region modeled, linkage with the rest of the economy and each of the three aspects of the agricultural system on which the case studies will focus. The questions section lists, by each aspect, various questions, in general and in particular, that the case studies are expected to answer. The modeling section outlines in block form the proposed model

Hunger: Beyond the Reach of the Invisible Hand

The work described in this report differs from many others in that the analysis of policies is based on a common integrated framework. It shows why hunger persists, why many policies advanced in popular literature do not work, and what kind of policies can work. Although based on analyses using a quantitative, sophisticated system of models, the book is addressed to the nontechnical layman and to the general reader. The arguments go beyond economic and technical analysis and deal with political and moral aspects. The authors show that solutions that rely only on the market mechanism do not work to eliminate hunger rapidly enough. This analysis shows that even policies that try to intervene, modify, and distort the market do not help to reduce hunger effectively if they rely on the market mechanism

Towards Free Trade in Agriculture

Agriculture seems to be a difficult sector to manage for most governments. Developing countries face tough dilemmas in deciding on appropriate price policies to stimulate food production and maintain stable, preferably low, prices for poor consumers. Governments in developed countries face similar difficult decisions. They are called upon to give income guarantees to farmers whose incomes are unstable and relatively low when compared to those in the nonagricultural sector. These guarantees often lead to ever-increasing budgetary outlays and unwanted agricultural surpluses. High prices make new investments and the application of new technologies more attractive than world prices warrant, and a process is set in motion where technological innovation attains a momentum of its own, in turn requiring price policies that maintain their rates of return. Surpluses are disposed of with subsidies in domestic markets or in the international market. Price competition reduces the market share of other exporters, who may be efficient producers, unless they are willing to engage in subsidy competition. This lowers export earnings and farm incomes or depletes the public resources of developing countries that export competing products. Retaliatory measures have led to frictions and further distortions of world prices. Every so often the major agricultural exporters -- the USA, the EC, Australia, or Canada -- accuse one another of unfair intervention. Though they have agreed to discuss agricultural trade liberalization under GATT negotiations, if anything, the expenditure on farm support has continued to increase in both the EC and the USA. Some developing countries do benefit from the subsidized disposal of surplus cereals on the world market. This, however, might be only a short-term gain. Low prices are a disincentive to their own producers and lead, in the long run, to an unsustainable dependence on imports, as appears to be the case in many parts of Africa. Also, these benefits of cheap cereals may not offset the loss of markets, such as the sugar market, which is important to a large number of developing countries. Against that background and in the light of the fact that many countries have agreed to discuss agricultural trade liberalization under GATT, it is important to assess the consequences of agricultural trade liberalization. It should increase efficiency at the global level as countries adjust their production more in line with their comparative advantages. However, in the absence of compensating transfers, some countries may lose under liberalization. An assessment of efficiency gains at the global level and gains and losses of countries can provide some insight into the degree to which their own production and trade have become distorted and how large the adjustment costs may be. Several questions are relevant here: what if the developed market economies remove border protection? But also: what consequences can be expected from the removal of border protection by developing countries only? (This is an issue that can be usefully analyzed as it belongs to the regular package of adjustment policies recommended by the World Bank and the IMF.) What would be the impact of simultaneous liberalization by all market economies? Who would gain and who would lose? This book reports on a study that explored these questions using a system of empirically estimated national agricultural policy models linked together through trade and capital transfers. A general equilibrium approach is followed for both the national models and the international linkage. Thus, behavioral responses of consumers and producers, as well as the responses of government policies to changes in world market conditions, are accounted for. We call this system of models the Basic Linked System (BLS). It consists of 18 national models, two models of regions -- namely, the EC and the Council for Mutual Economic Assistance (CMEA) -- and 14 somewhat similar models of groups of countries. Together these cover all the nations of the world. We believe that the BLS is particularly suited -- at least, better than any other existing analytic tool -- for the analysis of issues related to agricultural trade liberalization and self-sufficiency. The present study differs from other available studies on trade liberalization in combining all the following features: a general equilibrium approach is applied to both the national and international levels; most of the parameters are empirically estimated; a number of agricultural commodities are distinguished; nations are distinguished; and a rich variety of policy instruments for national governments is permitted, including tariffs, trade, quotas, taxes, transfers, and stock operations. The existence of these features can significantly alter policy conclusions derived from the analysis

Climate change and world food supply, demand and trade: Who benefits, who loses?

This paper summarizes the findings of a major interdisciplinary research effort by scientists in 25 countries. The study examined the potential biophysical responses of major food crops to changing atmospheric composition and climate, and projected potential socioeconomic consequences. In a first step crop models were used to estimate how changing climatic conditions might alter yields of major crops at a number of sites representing both major production areas and vulnerable regions at low, mid and high latitudes. Then a dynamic recursive national-level model of the world food system was used to assess socio-economic impacts for the period 1990 up to year 2060