Agriculture Reference
In-Depth Information
Non-negativity and integrity constraints
At this point, the government must select among these scenarios
one that is satisfying for both chains (in terms of profits) so that it will
make sure that they will be willing to produce. Industry is not considered
as single neutral agent aiming at break even point, but as distinct and
competing agents aiming at maximising their own profits. Each
n
-tuple of
unitary tax credits gives rise to different solutions. In order to
generate the efficient frontiers for each
n
-tuple, a modified version of the
so-called approach is implemented (Steuer 1986). In this
case, it consists in maximising the first objective subject to varying lower
bounds on the other objectives. As indicated below, the industry model is
solved parametrically for different values of
subject to
and constraints (8) to (18), where is a small positive value (0.01) and
(in MFF) vary parametrically from the lowest to the highest possible
profits for chains
k (k=
2
,...,n).
Note: the objective function has been
slightly modified in order to discard weakly efficient solutions.
Consequently, during this second stage of the bi-level model, each
pair of tax credits provides a fair number of economically rational solutions
from the point of view of agricultural and industry sectors. We keep all
these solutions in order to provide the multi-criteria analysis module with a
final set of alternatives reflected in the decision space as discrete choices.
4. MULTIPLE CRITERIA ANALYSIS
Government opts for other priorities beside budgetary concerns such as
supporting farmers' income, diversifying energy production sources and
reducing oil imports and, last but not least, reducing greenhouse gas
emissions (GHG). Bio-fuel use can reduce fossil fuel consumption and
increase carbon storage in plants. When bio-fuels are burned, the
absorbed by the growing plant during photosynthesis is re-emitted.
Therefore, on a global basis, no net
emissions would occur, if biomass
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