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Quota in Agricultural Positive Mathematical Programming Models

Author

Listed:
  • Buysse, Jeroen
  • Fernagut, Bruno
  • Harmignie, Olivier
  • Henry de Frahan, Bruno
  • Lauwers, Ludwig
  • Polomé, Philippe
  • Van Huylenbroeck, Guido
  • Van Meensel, Jef

Abstract

In Belgium, an agricultural sector model for ex ante policy analysis is developed. The model, called SEPALE, uses an adapted version of Positive Mathematical Programming allowing for simultaneous modelling of individual farms. SEPALE applies farm level calibrated cost functions to the sample of the Farm Accountancy Data Network to account for the large variability among farms. Due to the recent discussion on the Sugar Common Market Organization (CMO) reform, the need raises for an appropriate methodology to cope with quota in positive programming models. Modelling quota at farm level implies three important challenges: i) estimation of the marginal cost or the quota rent, ii) simulating over- or undersupply and iii) quota exchange. Present paper describes a methodology dealing with the three quota issues. Simulations of sugar beet policy options draw on the proposed approach. The paper also demonstrates that other types of quota could benefit as well.

Suggested Citation

  • Buysse, Jeroen & Fernagut, Bruno & Harmignie, Olivier & Henry de Frahan, Bruno & Lauwers, Ludwig & Polomé, Philippe & Van Huylenbroeck, Guido & Van Meensel, Jef, 2005. "Quota in Agricultural Positive Mathematical Programming Models," 89th Seminar, February 2-5, 2005, Parma, Italy 240759, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae89:240759
    DOI: 10.22004/ag.econ.240759
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    References listed on IDEAS

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    2. Bureau, Jean-Christophe, et al, 1997. "Quota Mobility in the European Sugar Regime," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(1), pages 1-30.
    3. S¯ren E. Frandsen & Hans G. Jensen & Wusheng Yu & Aage Walter-J¯rgensen, 2003. "Reform of EU sugar policy: price cuts versus quota reductions," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 30(1), pages 1-26, March.
    4. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    5. Adenäuer, Marcel & Heckelei, Thomas, 2005. "Economic Incentives to Supply Sugar Beets in Europe," 89th Seminar, February 2-5, 2005, Parma, Italy 231822, European Association of Agricultural Economists.
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