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Improvement of a bio-economic mathematical programming model in the case of on-farm source inputs and outputs

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  • Aghajanzadeh-Darzi, Parisa
  • Jayet, Pierre-Alain
  • Domingues, M.J.P
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    Abstract

    A signicant part of crop productions is not marketed and can be totally (fodders and pastures) or partly (cereals) used on-farm. Regarding inputs, Nitrogen fertilizers are also not only provided by the market, but they are signicantly on-farm provided by livestock. When outputs and inputs are related through technical "dose-response functions, like Nitrogen (N)-yield functions, the optimal gross margin is easily com- puted at the plot level, when input and output are marketed. In this case, market prices are required. The question addressed in this article is how to assess the optimal values when one crop production (respectively one input) is entirely on-farm used (respectively on-farm produced). We propose a simple iterative computation method aiming at replacing market prices by shadow costs. We apply this method to a large set of the bio-economic agricultural supply model AROPAj, which covers a large range of agri- cultural activities over the European Union. This method allows us to keep ecient the basic linear framework of the model even when the yield functions make it non linear.

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    Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126768.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:126768

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    Keywords: Bio-economic farm model; Mathematical programming; On-farm source products; Shadow prices; Research Methods/ Statistical Methods; Q10; Q15; Q50; Q57;

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    1. Fare, Rolf & Grosskopf, Shawna & Weber, William L., 2006. "Shadow prices and pollution costs in U.S. agriculture," Ecological Economics, Elsevier, vol. 56(1), pages 89-103, January.
    2. Stéphane De Cara & Pierre-Alain Jayet, 2011. "Marginal abatement costs of greenhouse gas emissions from European agriculture, cost effectiveness, and the EU non-ETS Burden Sharing Agreement," Working Papers 1105, Chaire Economie du Climat.
    3. Stephane De Cara & Martin Houzé & Pierre-Alain Jayet, 2005. "Methane and nitrous oxide emissions from agriculture in the EU : a spatial assessment of sources and abatement costs," Working Papers 156815, Institut National de la Recherche Agronomique, France.
    4. Hadley, David, 1998. "Estimation Of Shadow Prices Of Undesirable Outputs: An Application To Uk Dairy Farms," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20977, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. anonymous, 1996. "Measures of money stock revised," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Apr, pages 327-331.
    6. Shaik, Saleem & Helmers, Glenn A. & Langemeier, Michael R., 2002. "Direct And Indirect Shadow Price And Cost Estimates Of Nitrogen Pollution Abatement," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(02), December.
    7. Stijn Reinhard & C.A. Knox Lovell & Geert Thijssen, 1999. "Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 44-60.
    8. Isabelle Piot-Lepetit & Dominique Vermersch, 1998. "Pricing Organic Nitrogen Under The Weak Disposability Assumption: An Application to the French Pig Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 85-99.
    9. Shaik, Saleem & Helmers, Glenn A., 1999. "Shadow Price Of Environmental Bads: Weak Vs. Strong Disposability," 1999 Annual meeting, August 8-11, Nashville, TN 21615, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. S De Cara & P-A Jayet, 2000. "Emissions of greenhouse gases from agriculture: the heterogeneity of abatement costs in France," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(3), pages 281-303, September.
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