ALTERNATIVE APPROACHES ON CONSTRUCTING A COMPOSITE INDICATOR TO MEASURE AGRICULTURAL SUSTAINABILITY

The aim of this paper is to carry out a comparative analysis of alternative methods on constructing composite indicators to measure global sustainability of the agricultural sector. This comparison is implemented empirically on the irrigated agriculture of the Duero basin (Spain) as a case study. For this purpose, this research uses a dataset of indicators previously calculated for different farm-types and policy scenarios. The results allow to establish a hierarchy of the policy scenarios on the basis of the level of sustainability achieved. Furthermore, analyzing the heterogeneity of different farms-types in each scenario, is also possible to determine the main features of the most sustainable farms in each case. All this information is useful in order to support agricultural policy design and its implementation, trying to increase the sustainability of this sector.Sustainability, Composite Indicators, Irrigated agriculture, Scenarios, Agricultural policy, Agricultural and Food Policy, Environmental Economics and Policy, Research Methods/ Statistical Methods,

Comparative Performance of Selected Mathematical Programming Models

This study compares the predictive performance of several mathematical programming models. Using the cropping patterns, yields and crop gross margins of eighteen farms over a period of five years we compare the models' optimum solutions with observed crop distributions after the Reform of the EU Common Agricultural Policy of 1992. The results show that the best prediction corresponds to a model that includes expected profit and a qualitative measure of crop riskiness. The results suggest that, in order to obtain reliable predictions, the modelling of farmers' responses to policy changes must consider the risk associated with any given cropping pattern. Finally, we test the ability of the proposed model to reproduce the farmers' observed behaviour with equally good performance under conditions of limited data availability.model performance, mathematical programming, modelling, decision-making, Resource /Energy Economics and Policy,

Agricultural Risk Aversion Revisited: A Multicriteria Decision-Making Approach

In modelling farm systems it is widely accepted that risk plays a central role. Furthermore, farmers' risk aversion determines their decisions in both the short and the long run. This paper presents a methodology based on multiple criteria mathematical programming to obtain relative and absolute risk aversion coefficients. We rely on multiattribute utility theory (MAUT) to elicit a separable additive multiattribute utility function and then estimate the risk aversion coefficients and apply this methodology to an irrigated area of Northern Spain. The results show a wide variety of attitudes to risk among farmers, who mainly exhibit decreasing absolute risk aversion (DARA) and constant relative risk aversion (CRRA).Risk analysis, Agriculture, Utility theory, Multiple criteria analysis, Risk and Uncertainty,

Viability of the Raw Cotton Production in Spain After the Decoupling of the Subsidies

Considering the latest reform of the EU's Cotton Regulation of 29th April 2004, which will come into force in the 2006/07 season, we analyse its impact on the cotton production sector of Andalusia. The decoupling of subsidies implies that producers will be entitled to 65 percent of the amount received in the reference period (three years) irrespective of the crop chosen to grow. The remaining 35 percent (slightly higher) is paid as cotton are a payment. In this research, first from a survey carried out in 2004 we obtained six groups of producers using fact or analysis and cluster analysis. Then, based on this characterization, we assess the impact of two policy scenarios: (a) the implementation of the reform without any additional measures, and (b) the addition of a complementary environmentally based area payment plus the modulation of the decoupled subsidy up to 50 percent according to raw cotton quality. In the first scenario most producers would reduce the use of inputs to a minimum and leave the raw cotton in the fields. In the second scenario the production of cotton would shift from conventional toward Integrated Production with a reduction of 30% with respect to the current hectarage.Cotton, Spain, Mid-Term Reform, Simulation, Multi-Criteria Decision Making, Agricultural and Food Policy, Crop Production/Industries,

Demand for Non-Commodity Outputs from Spanish Extensive Agricultural Systems

Agricultural multifunctionality is the recognition of the joint exercise of economic, environmental and social functions by this sector. In order to make this concept operative to support the design of public policies, it is necessary to estimate the social demand for such functions. The main objective of this article is to present two empirical applications in this line. For this purpose we have adopted the agricultural system of mountain olive groves in Andalusia (Southern Spain) at risk of abandonment after the decoupling of the EU subsidies and the agricultural system of cereal steppes in Tierra de Campos (North-western Spain). The economic valuation technique used is the Choice Experiment. The results suggest the existence of a significant demand for the different functions, although the demand is heterogeneous, depending on the socio-economic characteristics of the individuals surveyed.Agricultural multifunctionality, Economic valuation, Choice experiments, extensive agriculture, Andalusia, Castilla-Leon (Spain), Farm Management,

MULTI-CRITERIA ANALYSIS OF FACTORS USE LEVEL: THE CASE OF WATER FOR IRRIGATION

In this paper we present a methodology to analyse input use in the agricultural sector. The novelty of the theoretical model explained is that it has been developed considering a multi-criteria environment. Thus, the optimal input use condition is determined by the assessment of "multi-attribute utility" and "multi-attribute marginal utility". We show how the approach adopted in this paper is a generalization of the single-attribute expected utility theory. The theoretical model developed is further implemented in an empirical application that studies water for irrigation use as a particular case. Results show how multi-attribute utility functions elicited for a sample of 52 irrigators explain differences on irrigation water use in relative homogenous agricultural systems, albeit exhibiting similar water partial utility functions. We conclude that these differences come from the dissimilar weights that farmers attached to each attribute in the aggregate utility function. The irrigated area considered as case study is located in North-western Spain.Resource /Energy Economics and Policy,

MCDM Farm System Analysis for Public Management of Irrigated Agriculture

In this paper we present a methodology within the multi-criteria paradigm to assist policy decision-making on water management for irrigation. In order to predict farmers' response to policy changes a separate multi-attribute utility function for each homogeneous group, attained applying cluster analysis, is elicited. The results of several empirical applications of this methodology suggest an improvement of the ability to simulate farmers' decision-making process compared to other approaches. Once the utility functions are obtained the policy maker can evaluate the differential impacts on each cluster and the overall impacts in the area of study (i.e. a river basin) by aggregation. On the empirical side, the authors present some studies for different policy instruments including water pricing, water markets, modernization of irrigation systems and a combination of them.multi-attribute utility theory, water management, irrigation, policy analysis, Agricultural and Food Policy, Q25, Q15, C61,

Sustainability assessment of olive grove in Andalusia: A methodological proposal

Recently the olive sector has had important changes in Andalusia due to both the enlargement and the intensification of farming. The expansion of the olive grove in Andalusia is causing sustainability problems, not only from the socio-economic dimension (profit reduction) but environmental (erosion, water pollution or biodiversity losses). The main objective of this study is to develop a methodology to analyse the sustainability of the olive grove farms in Andalusia. This methodology will allow us to bear with the three dimensions of sustainability (economic, social and environmental) as well as to obtain a precise diagnosis of the olive grove through a selection of a set of indicators. This methodology will be applied in future research works in order to build a basis to help both decision-making processes and implementation of public policies.Olive tree, Sustainability, Indicators, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics,

Andalusian Demand for Non-Market Goods from Mountain Olive Groves

Agricultural multifunctionality is the recognition of the joint exercise of economic, environmental and social functions by this sector. In order to make this concept operative for the design of public policies, it is necessary to estimate the social demand for such functions. The main objective of this article is to present an empirical application in this line. For this purpose we have taken the agricultural system of mountain olive groves in Andalusia (Southern Spain) at risk of abandonment after the decoupling of the EU subsidies as a case study. The economic valuation technique used is the Choice Experiment. According to the results, there is a different contribution of each attribute to the improvement of the Society level of utility. The main finding of this study is the identification of a social demand for public goods and services provided by the mountains olive groves. This support for agricultural multifunctionality is heterogeneous in its perception by the citizens and the valuation of the various attributes that the concept involves. Taking into account the impact of an overall improvement in the attribute levels and the socioeconomic characteristics of the respondents, the results suggest that women, people with higher education levels, urban citizens and families with more than three members are those who benefit most from the provision of public goods by agriculture. There is a different contribution of each attribute to the improvement of the Society level of utility. Thus, and taking into account its WTP for each attribute, keeping rural population in their villages and fighting soil erosion (with 22.61 and 21.55/individual/year, respectively) seem to be the most valued functions of the mountain olive groves by Andalusian citizens. It follows the improvement of the visual quality of the rural landscapes (12.20/individual/year) and the reduction of food residuals (7.14/individual/year). Finally, the results of this study support the new orientation of the CAP which makes decoupled payments on compliance with a range of environmental, food safety, animal and plant health and animal welfare standards, as a result of which, the cross-compliance requirement of the EU agricultural support will, presumably, promote a net increase in social welfare. Yet, according to the results of this research, some efforts should be done to allow cross-compliance to reinforce the objectives of keeping rural population in rural areas and the improvement of the landscape.Agricultural multifunctionality, Economic valuation, Choice experiment, Olive groves, Andalusia (Spain), Crop Production/Industries, Demand and Price Analysis, Q11, Q18, Q24,

Demand for non-commodity outputs from mountain olive groves

Agricultural multifunctionality is the recognition of the joint exercise of economic, environmental and social functions by this sector. In order to make this concept operative to support the design of public policies, it is necessary to estimate the social demand for such functions. The main objective of this article is to present an empirical application in this line. For this purpose we have adopted the agricultural system of mountain olive groves in Andalusia (Southern Spain) at risk of abandonment after the decoupling of the EU subsidies as a case study. The economic valuation technique used is the Choice Experiments. According to the results, each attribute included in the concept of multifunctionality makes a different contribution to the improvement of the utility at societal level. Thus, and taking into account its willingness to pay (WTP) for each attribute, maintaining rural population levels in villages and fighting soil erosion seem to be the functions most valued by citizens of Andalusia. These functions are followed by improvement in the visual quality of the rural landscapes and the reduction of phytosanitary residues in food. Finally, although the results suggest that there is a significant demand for the various functions, this demand is heterogeneous, and depends on the socio-economic characteristics of the individuals.Agricultural multifunctionality, Economic valuation, Choice experiments, Olive groves, Andalusia (Spain), Agricultural and Food Policy,