IDEAS home Printed from
   My bibliography  Save this paper

Adjustment Costs of Agri-Environmental Policy Switchings: A Multi-Agent Approach


  • Alfons Balmann, Kathrin Happe, Konrad Kellermann, Anne Kleingarn


Normative agricultural policy models are traditionally either based on representative farms or on farm samples. A well-known problem of representative farm models is the aggregation error. On the other hand, farm sample models usually do not consider farms' interactions and thus, the farms' behavior may not be consistent on the aggregate level. However, the availability of powerful computers as well as the development of new modeling techniques offers new opportunities for farm sample approaches. Particularly, so called multi-agent models allow to simulate agricultural regions "from the bottom up" by considering a multitude of individually behaving farms (agents) that interact on product and factor markets, such as the land market. Purpose of this paper is to present such a normative multi-agent modeling approach and to apply it to a comparative dynamic analysis of agricultural policies that aim at reducing the environmental problems of the high animal density to be found in certain regions in Germany. The model considers a number of initially ~ 800 farms which are located at different points on a chessboard-like spatial grid representing a region of ~ 25000 hectares (ha). The cells of the grid represent land plots of 2.5 ha each on which agricultural production can take place. Farms compete for renting the land in repeated iterative auctions during which each farm bids according to its marginal land productivity and its distance to the next available plot. Apart from renting and letting land, farms can engage in different agricultural production activities (e.g. dairy, cattle, hogs, sows, poultry, arable farming, pasture land) and they can invest in different assets (differently sized buildings for various activities, machinery of different sizes). In addition to the different production and investment activities, the farms can use their labor and capital for off-farm employment as well as to hire additional labor and to make debts. Moreover, farms can give up farming and new farms can be founded. Each of the farms can be understood as an agent that acts autonomously in order to maximize the individual household income in response to expected prices, subsidies, and the availability of land. Production, rental decisions, and investment decisions are based on mixed integer programming. The model is applied to the region of "Hohenlohe" which is located in the southwestern German federal state of Baden-Wuerttemberg. The region is dominated by family farms and can be characterized by its specialization in piglet, hog, and poultry production. To grasp the particular characteristics of the region, each of the model farms is initialized with data which is derived from real farms of the region. The respective farms participate in the German Farm Accounting Data Network (FADN). On the aggregate level the modeled region is initialized such that it fits the farm structure and the production structure of the region Hohenlohe. Simulations are carried out for basic nutrient related environmental policies. National legislation, which is binding for all farms, limits the application of animal manure to farmland on a per hectare basis. However, in regions such as Hohenlohe, many farms with intensive animal production may exceed the limit. They either have to dispose excess manure by paying other farmers to take it or by renting additional land. On the state level farmers have the option to participate in a voluntary agri-environmental program in which they are financially compensated for introducing selected, more environmentally friendly production methods (e.g. a stronger coupling of plant and livestock production, introduction of extensive production methods). Switching to and increasing participation in voluntary measures is simulated. Results are interpreted with respect to environmental indicators, structural change, production structure, rental prices, efficiency, and farm incomes.

Suggested Citation

  • Alfons Balmann, Kathrin Happe, Konrad Kellermann, Anne Kleingarn, 2001. "Adjustment Costs of Agri-Environmental Policy Switchings: A Multi-Agent Approach," Computing in Economics and Finance 2001 148, Society for Computational Economics.
  • Handle: RePEc:sce:scecf1:148

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    1. Arifovic, Jasmina, 1994. "Genetic algorithm learning and the cobweb model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 3-28, January.
    2. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    3. Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.
    4. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 245-260, September.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ostermeyer, Arlette & Schonau, Franziska, 2012. "Effects of biogas production on inter- and in-farm competition," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135772, European Association of Agricultural Economists.
    2. Hailu, Atakelty & Schilizzi, Steven, 2003. "Investigating the performance of market-based instruments for resource conservation: the contribution of agent-based modelling," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57883, Australian Agricultural and Resource Economics Society.
    3. Josef APFELBECK & Marco HUIGEN & Tatjana KRIMLY, "undated". "The Importance of Spatial, Temporal and Social Scales in Integrated Modeling; Simulating the Effects of Climatic Change on District- and Farm-level Decision-Making in the Danube Catchment Area," Regional and Urban Modeling 284100004, EcoMod.
    4. Happe, Kathrin, 2005. "Agent-Based Modelling and Sensitivity Analysis by Experimental Design and Metamodelling: An Application to Modelling Regional Structural Change," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24464, European Association of Agricultural Economists.
    5. Schilling, Chris & Kaye-Blake, William & Post, Elizabeth & Rains, Scott, 2012. "The importance of farmer behaviour: an application of Desktop MAS, a multi-agent system model for rural New Zealand communities," 2012 Conference, August 31, 2012, Nelson, New Zealand 136070, New Zealand Agricultural and Resource Economics Society.
    6. Happe, Kathrin & Balmann, Alfons, 2002. "Struktur-, Effizienz- und Einkommenswirkungen von Direktzahlungen," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(8).
    7. Apfelbeck, Josef & Huigen, Marco & Krimly, Tatjana, 2007. "The importance of spatial, temporal and social scales in Integrated modeling; simulating the effects of climatic change on district- and farm-level decision making in the Danube catchment area," 81st Annual Conference, April 2-4, 2007, Reading University 7984, Agricultural Economics Society.
    8. Albisser, Gregor, 2007. "Structural Adjustment Processes of Farming Enterprises: The Role of Trust for Cooperation and Collaboration Strategies," 2007 1st Forum, February 15-17, 2007, Innsbruck, Austria 6576, International European Forum on Innovation and System Dynamics in Food Networks.
    9. Albisser, Gregor & Lehmann, Bernard, 2006. "Modeling of Structural Adjustment Processes of Farming Enterprises: The Need for Implementation of Cooperation and Collaboration Strategies," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25250, International Association of Agricultural Economists.

    More about this item


    agriculture; policy analysis; agent-based systems;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sce:scecf1:148. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.