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A Simulation Framework to Study Policy Formulation and Evaluation of Economic Viability and Sustainability of Small and Marginal Farmers

Author

Listed:
  • Usha Sridhar

    ()

  • Sridhar Mandyam

    () (Ecometrix Research)

Abstract

This paper proposes an economic computational agent-based framework, referred to here as FarmSIM, to model the micro-level economic and financial behaviour of farmers. We model macro-level external environmental impacts of costs, prices and rainfall through a set of flexible power functions. The framework allows us to trace a “digital future” of a farming community over a number of “seasons”, effectively offering the ability to test an appropriate policy on the community. FarmSIM may provide a valuable test-bed for gaining a direct insight into economic viability and sustainability issues in relation to policy implementation. The paper suggests an evaluation framework, FarmSIM, to assess the efficacy of policy formulation by Governments and other institutions concerned before the policies are implemented. The paper demonstrates the utility of FarmSIM by posing important questions relevant to pricing, profitability and indebtedness in the farming community in the form of simulation models within the FarmSIM framework. Realistic data are used to assess the dynamics and the effects of interactions of core variables over time.

Suggested Citation

  • Usha Sridhar & Sridhar Mandyam, 2010. "A Simulation Framework to Study Policy Formulation and Evaluation of Economic Viability and Sustainability of Small and Marginal Farmers," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(1), pages 27-62, June.
  • Handle: RePEc:unt:jnapdj:v:17:y:2010:i:1:p:27-62
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    References listed on IDEAS

    as
    1. Srijit Mishra, 2007. "Agrarian Scenario in Post-reform India:A Story of Distress, Despair and Death," Working Papers id:1019, eSocialSciences.
    2. Surabhi Mittal, 2007. "OECD Agricultural Trade Reforms Impact On India's Prces and Producer's Welfare," Working Papers id:1072, eSocialSciences.
    3. Sripad Motiram & Vamsi Vakulabharanam, 2007. "Corporate and Cooperative Solutions for the Agrarian Crisis in Developing Countries," Review of Radical Political Economics, Union for Radical Political Economics, vol. 39(3), pages 360-367, September.
    4. Xavier Giné & Robert Townsend & James Vickery, 2008. "Patterns of Rainfall Insurance Participation in Rural India," World Bank Economic Review, World Bank Group, vol. 22(3), pages 539-566, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agricultural Economics; Computer Simulation; Economic Agent; Policy Evaluation;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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