Positive multi-criteria models in agriculture for energy and environmental policy analysis

Environmental consciousness and accompanying actions have been paralleled by the evolution of multi-criteria methods which have provided tools to assist policy makers in discovering compromises in order to muddle through. This paper recalls the development of multi-criteria methods in agriculture, focusing on their contribution to produce input or output functions useful for environmental and/or energy policy. Response curves generated by MC models can more accurately predict farmers’ response to market and policy parameters compared with classic profit maximizing behavior. Concrete examples from recent literature illustrate the above statements and ideas for further research are provided.multi-criteria models, interval programming, supply curves, bio-energy, policy analysis

Hybrid linear programming to estimate CAP impacts of flatter rates and environmental top-ups

This paper examines evolutions of the Common Agricultural Policy (CAP) decoupling regime and their impacts on Greek arable agriculture. Policy analysis is performed by using mathematical programming tools. Taking into account increasing uncertainty, we assume that farmers perceive gross margin in intervals rather than as expected crisp values. A bottom-up hybrid model accommodates both profit maximizing and risk prudent attitudes in order to accurately assess farmers’ response. Marginal changes to crop plans are expected so that flatter single payment rates cause significant changes in incomes and subsidies. Nitrogen reduction incentives result in moderate changes putting their effectiveness in question.Interval Linear Programming, Min-Max Regret, Common Agricultural Policy, Arable cropping, Greece

Energy Crop Supply in France: A Min-Max Regret Approach

This paper attempts to estimate energy crop supply using an LP model comprising hundreds of representative farms of the arable cropping sector in France. In order to enhance the predictive ability of such a model and to provide an analytical tool useful to policy makers, interval linear programming (ILP) is used to formalise bounded rationality conditions. In the presence of uncertainty related to yields and prices it is assumed that the farmer minimises the distance from optimality once uncertainty resolves introducing an alternative criterion to the classic profit maximisation rationale. Model validation based on observed activity levels suggests that about 40% of the farms adopt the min-max regret criterion. Then energy crop supply curves, generated by the min-max regret model, are proved to be upward sloped alike classic LP supply curves.interval linear programming, min-max regret, energy crops, France, Crop Production/Industries, Resource /Energy Economics and Policy, C61, D81, Q18,

Price induced water irrigation: Unraveling conflicts and synergies between European agricultural and water policies

The 2003 CAP reform considerably affects cropping patterns in European agriculture. At the same time the imperatives of the forthcoming Water Framework Directive (WFD) is expected to modify irrigation decisions especially in Southern Europe where irrigated agriculture utilizes about 70-80% of total water. This paper examines the combined effect of CAP reform and the application of likely volumetric water pricing on water demand by taking into account three drivers of change, namely extensive margin changes, intensive margin changes and irrigation technology shift. For low rates of water prices, CAP reform contradicts the WFD objectives since it leads to cropping patterns that consume more water resources. On the contrary, as water prices increase, decoupling and water pricing display a synergistic effect on water conservation. Finally, decoupling substantially increases the efficiency of water pricing in terms of water conservation. As a result, the post CAP reform regime clearly dominates the prior CAP reform regime when an index of value for money water conservation is examined.irrigation, bio-economic modeling, mathematical programming, policy analysis, price endogenous model, water demand, CAP reform, WFD

Multiple goals in farmers’ decision making: The case of sheep farming in Western Greece

Management strategies and performance differ among farmers, as a result of different, multiple and often conflicting goals. Many approaches to building farm level models that incorporate multiple goals have been developed over the years, most of which share a common weakness. The determination of the goals to be used as attributes in the utility function is the result of a highly interactive process with the individual farmer, often difficult to implement. In this study, we use a non-interactive methodology, described in recent literature, to elicit the utility function of selected sheep farmers in western Greece, since farmers often appear reluctant to answer straightforward questions about their goals and preferences. Τhe results indicate that sheep farmers aim at the achievement of multiple goals, and that the maximization of gross margin is an important attribute in the utility function of mainly larger farms with a commercial orientation. The minimization of purchased forage, family labor and cost of hired labor are also important goals, especially for small and less commercial family farms. The multi objective farm level model built reproduces the Greek sheep farmers’ behavior more accurately and can replace the single objective model in decision making or agricultural planning problems.Sheep farming, mixed integer programming, multiple goals, noninteractive elicitation, Livestock Production/Industries, C61, D21, Q12,

Greek cotton farmers' supply response to partial decoupling of subsidies

A mathematical programming model based on a countrywide sample of farms is used to assess the impacts of the new C.A.P on the supply of the cotton sector in Greece. Results show a decrease in cotton cultivated area along with the introduction of a new production system called "semi-abandonment cotton". Farm income is practically unchanged, largely due to the decoupled payments. When these payments are not considered, farm income turns negative in some cases, thus leading towards abandonment of activities.Cotton, C.A.P, decoupling, mathematical programming, Agricultural and Food Policy, Agricultural Finance,

Evading Farm Support Reduction Via Efficient Input Use: The Case of Greek Cotton Growers

Utilizing a stochastic frontier approach, this paper examines the importance that input-oriented technical and scale efficiency may have for Greek cotton farmers in the context of the current EU cotton policy. To that end, a sample of cotton-growing farms in the representative cotton -producing county of Karditsa (central Greece) is empirically analyzed. The results suggest that the farms examined exhibit decreasing returns to scale and they are both scale and technically inefficient. Moreover, elimination of these inefficiencies could result in considerable gains; the cotton farmers examined could reduce production costs by 46.0%, by becoming both technically and scale efficient. Additionally, we estimate that if cotton farms in the area examined were technically and scale efficient the intervention price reductions (co-responsibility levy) imposed by the EU for excessive cotton production would be smaller for all Greek cotton growers.

Bio-energy production in the sugar industry: an integrated modeling approach

Recent reforms in the Common Agricultural Policy and the sugar regime caused serious concerns for the future of the European sugar industry. At the same time, the European Commission considers transportation bio-fuels as a key factor for reducing reliance on imported fuels, emission levels of greenhouse gases and to meet rural development goals. Matching the sugar sector with bio-ethanol production may create opportunities for sustainable management of the existing sugar industry infrastructure and also serve bio-fuel policy targets. A partial equilibrium economic model is used in order to evaluate the shift from sugar to bio-ethanol production in Thessaly, Greece. In the agricultural feedstock supply and industrial processing sub-models are articulated indicating optimal crop mix for farmers and the best technology configurations for industry. The joint ethanol-biogas option appears to be preferable using sugar beet and wheat, whereas capacity selected amounts at 120 kt of ethanol.Sugar beet, grain, ethanol, mathematical programming, Greece, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,