Browsing by Subject "Policy analysis"

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Agro-economic policy analysis with the regional production model ACRE : a case study for Baden-Wuerttemberg
(2011) Henseler, Martin; Dabbert, Stephan
Since its introduction the Common Agricultural Policy (CAP) of the European Union (EU) has undergone several reforms in order to adapt policy instruments and enable the agricultural sector to fulfil multiple functions with respect to economic, supply and environmental objectives. In the German federal state Baden-Wuerttemberg agricultural production is characterized by regional heterogeneity. Therefore it is important to estimate the impacts resulting from changes in the CAP at a detailed regional level. In this study the agricultural policy model ACRE (Agro-eConomic pRoduction model at rEgional level) has been used to simulate different policy scenarios and to analyze regional economic, production and environmental impacts. In particular the study aims to address the following research questions: What are the regional impacts of different policy measures in the German federal state Baden-Wuerttemberg with respect to economic, production and environmental objectives? How suitable are the simulated policy measures for achieving the policy objectives of the CAP 2003 reform, as well as the objectives of subsidy reduction, promotion of energy crop production, reduction of environmental pollution and promotion of agro-environmental measures? How suitable is the regional supply model ACRE as a tool for policy analysis and policy decision support? In order to address the research questions, ACRE has been updated, adapted and extended to simulate agricultural production in the federal state Baden-Wuerttemberg at NUTS3 level. The policy scenarios simulated in this study are defined to cover recent discussions on the future development of the CAP and their results are analysed according to a regional framework for NUTS3 counties, farm types and the complete model region. The simulation of the reference year (REF) implies the policy reform Agenda 2000 in the simulation year 2000. Thus, REF represents the observed situation of regional agricultural production on whose statistical data ACRE is calibrated. The scenario CAP2003 simulates the policy measures of the CAP 2003 reform in the simulation year 2015. Assumptions of increased yields and prices as well as harmonized direct payments for arable land and grassland result in an increase in income as well as in an increase of subsidy volume. In the entire model region Baden-Wuerttemberg cereal production increases while the production of fattening bulls and pigs decreases. Increases in crop production intensity result in an increase in environmental pollution. The scenario CAP2003 is used as the baseline scenario to compare the results of simulated policy scenarios which are delineated in the following paragraphs only with the most important results for the complete model region Baden-Wuerttemberg. In two subsidy reduction scenarios the simulated policy instruments aim to reduce subsidy volume by reducing Pillar 1 payments by 60% and by shifting 70% of the money from Pillar 1 to Pillar 2 respectively. Both scenarios result in the positive impact of a decrease in subsidy volume, but show a negative impact, especially an increase of abandoned land. In two energy crop scenarios the production of energy maize is simulated under the assumption that different situations in energy policy and energy markets result in different competitiveness between production of energy maize and food. In both scenarios energy crop production partially replaces cereal production, although the extent varies according to the high or small level of competitiveness between production of energy maize and food. Impacts on agricultural income and subsidies are small while increased environmental pressure is expected in the event of a significant expansion in energy crop production. Two nitrogen reduction scenarios simulate policy measures according to the water framework directive (WFD) and the OSPAR convention. The scenario according to the WFD (limitation of organic nitrogen input to a maximum of 170kg nitrogen per hectare) does not result in any impacts. In contrast, the scenario according to the OSPAR convention (reduction of nitrogen input quantities by 10%) results in a decrease in environmental pollution and is accompanied by a reduction of income and reduction of agricultural production under land abandonment. In the scenario of mandatory agri-environmental measures (AEM) it is assumed that the area with applied AEM is extended. The increase of AEM area results in a decrease in cereal production and a reduction of environmental pollution, while income decreases only slightly. Two combined scenarios simulate a mix of different policy and market situations which provoke an intensive and an extensive agricultural production. The results of these scenarios illustrate the interaction of the single policy measures. The measures of subsidy reduction have similar reducing impacts on income and subsidy volume in both scenarios. In the intensive production scenario high competitive energy crop production and a less restrictive nitrogen restriction result in a compensation effect of land abandonment by extension of energy crop area. In the extensive production scenarios, less competitive energy crop production and a high restrictive nitrogen constraint result in reduced agricultural production, increased land abandonment and reduced environmental pressure. In order to evaluate the impact of the simulated policy measures on the achievement of policy objectives the results of all scenarios are compared and ranked according to their impact on the policy objectives. The analyses of the model results show impacts of policy measures which are likely to be expected. However, the analyses at NUTS3 as well as farm types' level reveal that the impacts of the policy measures can be regionally quite different. Thus the detailed regional model results clearly show that (and where) the implementation of agricultural policy measures requires a regional specific evaluation and monitoring. In order to discuss the study with regard to the methods applied and the outcome, a final strengths and weaknesses analysis was conducted. The analysis highlights the strengths of the study (e.g. the model validation, the regional analysis of different policy scenarios, the possibility of cooperation with regional stakeholders). The validation and the results of the study also show that ACRE is a suitable tool for regional agricultural policy analysis and policy decision support. Supplementary work could help to overcome single shortcomings and caveats and to further develop the model. However, ACRE can already be used now as a useful tool for the regional agricultural policy analysis of the CAP in Baden-Wuerttemberg.
Economic analysis on the agro-environmental impacts of management and policy measures in the North China Plain
(2011) Kühl, Yannick; Zeddies, Jürgen
The increased use of agricultural inputs like fertilizers and pesticides led to wide-spread negative environmental impacts of agriculture in the North China Plain (NCP). The context of this research is that, due to continued growth of the population and the economy, the demand for agricultural products in China is gradually rising. However resources like land and water are scarce in China. Therefore new strategies need to be developed which do not put additional strains on the environment but meet the expected demand. The NCP is regarded as China?s most important agricultural region. This work aims at describing and discussing the environmental effects of agriculture in the NCP. The extent of these environmental impacts is presented. An essential part of this work is the in-depth description and analysis of the current cropping systems and farming practices, which is based on the findings a household survey. The central hypothesis of this work is that a change of the management systems is able to meet the production goals, to achieve a higher input-output efficiency and to reduce negative environmental impacts. Embedded in the objectives of this work, the main goals are the description of current agricultural practices and related negative environmental impacts, the definition of agro-environmental management and policy measures, impact analysis of management and policy measures and the development of suggestions for further research. The second chapter aims at introducing the background of this research, i.e. the environmental impacts of agriculture. Hereby the focus lies on the introduction of relevant and characteristic farming practices and on the related institutional setting. Then the processes of data acquisition and data handling for this work are described. The descriptive analysis presents the findings from a survey in July 2008; it aims at describing the characteristics of the surveyed farm households. Chapter 5 describes the methodologies which are applied for the analysis in this work. The first part describes the methodology of Linear Programming and its selection process. The second part explains the selection process for the integrated households. The last part describes the processes of environmental assessment by means of selected indicators. In chapter 6 the model is applied to simulate and analyze the selected households in changing scenarios. Each Scenario is described individually. Then the simulation results are presented and discussed. In chapter 7 possible strategies to reduce environmental impacts of farming in the NCP ? considering the objectives of this work: sustainability and food security ? are discussed. The discussion focuses on the two main problems in the research area: fertilization and water. The analysis showed that current farming practices in the research area are not sustainable and can, thus, threaten future food security in China. The dilemma of the research area is that intensive agricultural production cannot be reduced because high yields are needed to feed the growing demand from a (economically) growing population. Simultaneously high resource consumption and pollution from farming cannot continue as that could eventually result in irreversible damage to agriculture in the NCP and also threatens livelihoods. Finally strategic policy recommendations, characteristics of improved management practices and recommendations for further research are presented. These recommendations can play an important role in decision guiding for policy makers. After reviewing other studies in the NCP, it has to be concluded that this work represents one of the most comprehensive analysis of the agricultural practices in the Hebei province. It was demonstrated that management practices for maize and wheat exist which can result in higher input-output efficiency and which are economically more profitable ? especially production options which include intercropping of other crops or demand-driven fertilization and irrigation. The hypothesis was tested to be valid. The simulation of optimization options showed that economically more profitable production options exist. These optimized production options are characterized by a more efficient factor input (mainly water and fertilization) and resulting decreased environmental impacts. The policy of a premium for reduced water use resulted in the highest simulated increases of total contribution margins with simultaneously reduced negative environmental impacts. However the simulation also revealed that, in order to ensure food security, incentives for producing wheat should be provided as it is the economically least profitable main crop, but it has important functions for own consumption. The simulation also revealed that policies aimed at increasing output prices of the main crops (in combination with optimized production options) can result in total higher contribution margins and decreased negative environmental impacts and higher resource use efficiency. It should be noted that the optimum results did not integrate production options which the surveyed farmers are currently applying ? this indicates that current practices are not efficient. Many studies state that knowledge transfer systems and extension services in the NCP are deficient. The survey showed that the majority of the households did not have contact with the extension services, and, moreover, most of the households never received agricultural training. A knowledge transfer program can be an efficient tool to reduce environmental impacts of farming in the NCP. In addition specific recommendations and systems under considerations of socio-economic approaches have to be developed to improve knowledge transfer and services to farmers in the NCP. Appropriate decision support systems for efficient land use in the research area have to be developed. This study showed that laws and regulations regarding environmental impacts exist, but they are not reliably enforced. Many studies state that the current institutional framework for water management is inadequate and that it, thus, represents one of the causes for the overexploitation of water resources. Therefore the responsibilities should be clearly defined in order to be able to create incentives for saving water and to increase efficiencies. Furthermore, farmers? water rights are not secure and transparent. Therefore plans, based on scientific estimations for water supply and demand, are needed to clearly define and enforce water use rights. Besides clearly defined and enforced water use rights, also longer, enforced and secure land-use rights might facilitate the adoption of sustainable farming practices. Also the institutional set-up complicates the implementation of policies. Therefore institutional change with coordinated efforts is needed. Decentralized and regionalized administrations might increase the effectiveness of policies. In addition the institutional framework has to be updated to the specific requirements in the NCP. One of the main reasons for problems related to water management is that it represents a mostly unregulated resource in the NCP. The survey showed that fertilizer use is strongly varying, overuse and undersupply occur in the research area. The strongly varying and inadequate fertilizer applications endanger the sustainability of the agricultural systems in the NCP. Furthermore the organic matter contents in the soils are too low. The survey also revealed that the farmers in the research area are not informed about the quality of their soils. Integrated into knowledge transfer programs, providing opportunities for soil analysis to the local farmers could result in fertilization practices which are based on the nutrient contents of the soil and, thus, are more efficient. Structural development projects in the Chinese rural areas need to be continued, especially in the research are, to avoid a rural exodus. The living conditions in the rural areas ? in terms of income, education and health services ? are still not comparable with the conditions in urban areas. Chinese policy has to focus on stopping the further decline of the ground water tables. Furthermore a conscious water use and environmental awareness for all stakeholders has to be created in order to avoid that pollution or resource scarcity and misuse will further reduce agricultural production in the NCP. The social costs of further decreased agricultural production in the NCP would be unbearable.
Extreme climate shock and locust infestation impacts in Ethiopia : farm-level agent-based simulation of adaptation and policy options
(2022) Ejeta, Alemu Tolemariam; Berger, Thomas
Extreme climate shocks have been a daunting problem for smallholder farmers in Ethiopia for a decade. In recent years, locust invasions in many parts of the country have become another livelihood challenge to the subsistence farming population who already lives in dire livelihood situations. These two compounding shocks can lead to total crop failure at the early crop development stage or any crop growth stage. They are creating a massive economic upheaval in rainfed-dependent countries particularly affecting the well-being of resource-poor subsistence farmers. To reduce the effect of recurring shocks, especially climate risks, farmers have been implementing different risk management strategies. In addition to farmer autonomous adaptation practices, the government has been supporting farmer climate adaptation efforts by designing different policy interventions. In locust-hit areas, government and non-governmental organizations have designed and implemented different locust relief programs aimed at reducing associated welfare losses. Whether farmers can adapt to the effects of climate shocks or not by autonomous adaptation and/or with policy support is an empirical policy question. Moreover, as there are no studies of locust impacts and locust relief programs evaluation, the degree of locust livelihood devastation and the roles of locust relief policy interventions in minimizing the effect of locust shock are policy concerns. To address these important and key empirical questions, this thesis applied a farm-level agent-based simulation model. MPMAS, a modeling framework developed at the University of Hohenheim for agent-based simulations, was applied to capture inseparable production and consumption decisions of subsistence farming households in the Central Rift Valley of Ethiopia. The modeling framework uses a whole-farm mathematical programming modeling approach to represent complex dynamics of farm household decisions where a set of constraints and their complex relationships are considered. This simulation model enables scenario-based policy analysis by comparing different climate, locust, and policy scenarios which is hardly possible using statistical and other reduced forms of econometrics models. Through establishing scenarios, the model helps to disentangle the pathways through which external shocks may affect the well-being of smallholder farmers. MPMAS has been extensively applied for policy simulations in different countries including Ethiopia. This thesis extends previous MPMAS applications in Ethiopia by including new features for Central Rift Valley (MPMAS_CRV). MPMAS_CRV was parameterized from the CIMMYT household survey augmented with CSA datasets and own field research. Smallholder farmers ex-ante considerations of risk management strategies for possible climate shock are explicitly captured in MPMAS_CRV to assess their role in climate adaptation and welfare improvements. As part of enhancing the adaptive capacity of farm households to recurring climate shocks, the effect of policy interventions such as better access to credit services and improved agricultural technology are quantified by establishing climate and policy scenarios. Similarly, the thesis quantified the impact of locust invasions on household welfare outcomes and their response to locust relief interventions including food or cash transfers complemented with inputs and livestock provisions. Locust simulation is one of the novelties of this research as it is the first study to explicitly capture the welfare effects of the desert locust and assess the roles of locust relief programs through the application of MPMAS. To enable climate and locust shock effects quantification and associated policy interventions, different simulation experiments were designed comprised of climate and locust shock frequencies and policy scenarios. The simulation experiments and analysis were performed using the computational resources of bwForCluster within the bwHPC infrastructure in the state of Baden-Württemberg, Germany. Before using MPMAS_CRV for policy simulations, its reliability was validated using land use, livestock holding, and amount of crop sales by comparing simulated against observed survey values. The validation results suggest that MPMAS_CRV can represent and reflect real-world conditions so that it is reliable to use for impact quantification and policy simulations. In addition to empirical validation, the thesis conducted a global uncertainty analysis to check the robustness of the simulation results under different parameter variations and combinations to minimize erroneous policy formulations. Uncertainty analysis results show that the model converges rapidly at 50 repetitions which implies that these model repetitions are enough to cover the model uncertainty space. In terms of extreme climate impacts and adaptations, the simulation results suggest that climate shocks affect the welfare of agents adversely to the extent that they face temporary food shortages, loss of discretionary income, and depletion of livestock assets. The welfare losses are similar for both with and without ex-ante measure scenarios which indicates that farm agents cannot adapt to extreme shocks by employing autonomous adaptations. After the shocks are over, the simulation results reveal that agents cannot recover income and livestock losses immediately even when they consider ex-ante measures in the planning for possible risks. This suggests that for resource-poor farm agents, income and assets recovery takes a longer period after perturbation which can lead to a long-term livelihood crisis and a poverty trap. But, according to the simulation results in this thesis, agents can recover from food shortage immediately after the shocks are over, as meeting minimum food requirements are an absolute priority for agents (which is also true with real-world subsistence smallholder farmers) over other competing goals. Credit and technology policy simulation analysis further depict that welfare losses are partly compensated compared to without policies. Welfare losses of agents are better compensated when credit and technology are used jointly than when they are implemented separately. Similarly, technology policy intervention is better in compensating welfare losses compared to credit policy. Though policy interventions have compensational effects in minimizing the losses, they cannot completely offset the negative effects of extreme climate shocks even when implemented jointly. Disaggregation of simulation results by resource endowments suggests that agents with higher baseline income (without policy) and farm size appeared to be relatively less affected by shocks, and benefit from policy interventions the most. Locust simulation results also suggest that locust shock leads to agent livelihood crisis and makes slower recovery of income and livestock assets rebuild without any relief intervention programs. Simulation of different locust relief policy interventions reveals that combined relief policy interventions appear to be superior in compensating welfare losses compared to individual relief interventions. When food or cash transfer is combined with inputs and assets the welfare losses are considerably reduced compared to the individual policy intervention. When asset recuperation is combined with other relief programs, livestock losses are substantially reduced which signifies the importance of asset support in building an asset base which has long-term benefits. Strengthening early warning systems by including seasonal weather forecasting has paramount importance to prevent the crisis of desert locust plague.