Assessing farmer behaviour as affected by policy and technological innovations: bio-economic farm models

Abstract

A Bio-Economic Farm Model (BEFM) is defined as a model that links mathematical programming model formulations of farmers’ resource management decisions, to biophysical models that describe production processes and the conditions of natural resources for the farm scale. Two important distinctions are made: 1. between positive and normative and 2. between empirical and mechanistic BEFMs. Positive approaches are approaches that try to model the actual behaviour of the farmer, while normative approaches are approaches that try to find the optimal solution to the problem of resource management and allocation. In this report the focus will solely be on mechanistic BEFMs. Mechanistic BEFMs are constructed according to an image the researcher has of the processes occurring in reality, while an empirical model translates the inputs into outputs on the basis of location specific data without explaining or formulating the underlying processes. In this report a literature review has been carried out and about 180 references were collected and read, of which 70 ended up in this report. The mechanistic BEFMs are discussed on a number of aspects: suitability to policy evaluation and assessment of technological innovations, farmer decision making, the incorporation of time, production activities, comprehensiveness (how complete is the BEFM?), model evaluation (verifying the quality and robustness of the results of BEFMs) and transferability of the mechanistic BEFM to other locations. Finally, some useful complementarities to mechanistic BEFMs using other modelling approaches are discussed