Bio Economic Household Modelling For Agricultural Intensification

DAHBSIM is a dynamic, bio-economic model of agricultural households that was designed to be applied to a rural, developing country-setting, for the purpose of addressing questions around the biophysical constraints to on-farm agricultural productivity, and the whole-farm implications of alternative strategies to sustainable agricultural intensification. The model links socio-economic and biophysical aspects, in order to better illustrate the environmental and human welfare implications of different agricultural production practices, as they are influenced by policy-driven changes in prices of inputs or outputs, or by changes in the physical environment.

This book has the purpose of providing the "state of the arts" concerning bio-economic modelling dealing with agricultural systems. In most cases, the contributions use a methodology combining the use of biophysical and economic models, in all cases, an engineering production function approach is totally or partially applied. This practice is being developed in the last years as a response to concrete policy matters: agricultural policies are increasingly combined with environmental and natural resources policies, and this reality involves the need of an integrated assessment, that current economic models are not able to provide.

Agricultural households, both in the European Union and world-wide, have experienced important changes during the last three decades. This book covers recent advances both in family economics and in modelling the relationship between the farm-household and the farm-firm. Both theoretical and empirical aspects of Agricultural Household Modelling and Family Economics are also discussed, providing a timely contribution to research in this area.

This book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far. The model assumes that households are price-takers and is therefore recursive. The decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor. Comparative results on selected elasticities are presented for a number of economies. The empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive. The book summarizes the implications of agricultural pricing policy for the welfare of farm households, marketed surplus, the demand for nonagricultural goods and services, the rural labor market, budget revenues, and foreign exchange earnings. In addition, it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition, nutritional status, health, saving, and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings. Methodological topics, primarily the data requirements of the basic model and its extensions, along with aggregation, market interaction, uncertainty, and market imperfections are discussed. The most important methodological issues - the question of the recursive property of these models - is also discussed.

"This volume in the Mansholt series presents state of the art discussions on a wide variety of topics in the field of (agricultural) development. More than 20 chapters have been prepared by internationally known scholars and policy analysts, providing a concise overview of a variety of recent debates in development economics. While the background of most contributors is in economic science, the chapters are prepared so that they feed into ongoing policy discussions and are accessible to a wide readership. The contributions in this volume are organized around five themes: prospects for rural poverty alleviation, sustainable management of natural resources, strategies for enhancing food security, markets and the role of the state, and institutions and governance. It is obvious there are many links between these themes, and indeed the integration between them is emphasized in various chapters. This book is prepared as a festschrift or Liber Amicorum for professor Arie Kuyvenhoven. His retirement from the Development Economics Group at Wageningen University, The Netherlands is a good opportunity to take stock of recent developments in the area of agricultural development economics. Therefore, in addition to being a valuable source of information for readers with an interest in development, this volume is also intended as a farewell gift: to Arie, from friends and colleagues."

Policymakers and technology development institutions have mostly focused on high-potential farming areas, which have better resource endowments and greater access to markets and infrastructure than less-favored areas. However, in developing nations more than one billion people live in less-favored areas, where, despite disadvantages, appropriate policies and programs can generate high returns and contribute significantly to poverty reduction. IFPRI and its partners' research in the highlands of Ethiopia shows how poverty and land degradation can be reduced in a less-favored area. Using a bioeconomic model to analyze the effects that land degradation, population growth, stagnant technology, market imperfections, and increased risk of drought have on household production, welfare, and food security, the report gauges how alternative policy choices affect poverty and land degradation. According to the study, land quality and household welfare are both in peril in the Ethiopian highlands.The population in the region could suffer devastating effects if proper policies are not put in place. The bioeconomic modeling approach used in this study can be usefully adapted and applied in many other settings and at larger spatial and socioeconomic scales.

Since the 1980s many developing countries have implemented macro-economic policy reforms to curb inflation, reduce fiscal deficits and control foreign debt. The policy instruments used, such as exchange rate adjustment, budget cuts, trade policy reforms, public expenditure reviews and privatisation, have different and sometimes opposite consequences for agricultural land use. During the same period awareness was growing that deteriorating soil quality could become a limiting factor to increase or even sustain agricultural production. As a result, food availability and even accessibility for large population groups in developing countries may be jeopardised in the near future. Recently, quantitative models have made useful contributions to understanding the impact of economic policy reforms on the sustainability of land use. They provide a consistent analytical framework to deal with complex issues such as the direct and indirect effects of economic, agricultural, environmental and population policies, the role of market imperfections in transmitting economic policy signals, and the interactions between soil quality, agricultural production and household economic decision making. Different types of models can be distinguished: bio economic models, focussing on the link between farm household decisions and the agricultural resource base, household and village models, examining the impact of the socio-economic environment on farm household decisions, and more aggregate models, analysing interactions between sectors and their implications for sustainable land use.