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Agrispace : A recursive-dynamic Multi-Commodity Model
for Norwegian Agriculture depicting inividual farms

Overview:

AGRISPACE is a research activity to build a state-of-the-art agricultural sector model for Norway in order to analyze impacts of market and policy changes on the agricultural sector and farm structural change in Norway. It is a joint initiative of NILF and our group, drawing on a long-standing research co-operation between the two teams. The development of the model is part of the AGRISPACE project (1/2014-10/2017), financed by the Norwegian Research Council, and involving several Norwegian and international partners. The final tool is supposed to complement the existing Jordmod model.

(overview)

Aim

Given excellent single-farm data availability in Norway, and building on experiences with econometric analysis of these data sets (e.g. Storm, H., Mittenzwei, K., Heckelei, T. (2014): Direct Payments, Spatial Competition, and Farm Survival in Norway American Journal of Agricultural Economics, in press), the final aim of the research activity is develop a model which simultaneously simulates at the one hand profits for individual farms and their exit decisions and at the other hand agricultural production, input use and prices at regional level for policy impact analysis.

Current status

Currently, a operational version of a Multi-Commodity Market Model based on the Spatial Equilibrium approach is applied in first simukations, with the following core model characteristics:

    • Recursive-dynamic with a yearly resolution
    • Regionalized at NUTS III level for Norway, international prices are fixed
    • Bi-lateral transport flows between Norwegian regions based on spatial arbitrage condition
    • Farm types per regions defined based on statistical cluster analysis from the full farm population, up to 15 clusters per regions. Each cluster represents in average about 140 individual farms.
    • Production in each clusters depicted by nested CES production functions and CET function describing competition for primary factors
    • Farm-Household interactions expressed by factor supply from the household to agricultural activities
    • Flexible funcional form to depict consumer behavior
    • Coupled payments for 12 different payment schemes are calcualted for each of the 40.000 farms in the full population and from there aggregated to clusters of farms
    • Farm exit decisions depend on absolute profits and yearly profit changes and a stochastic component

Technical realization of the model:

Documents:

Staff working at ILR on the project



Last updated: Wednesday, August 23, 2017