Environmental Engineering Reference
In-Depth Information
FSSIM-MP is linked to a data module for agricultural management (FSSIM-AM),
which aims to describe or generate current and alternative activities and quantifies their
input-output coefficients (both yields and environmental effects) (see the following
section). Once the potential activities have been generated, FSSIM-MP chooses those
that best fit the farmer's objectives, given the set of resource, technological and
political constraints. The principal outputs generated by the FSSIM-MP model are
land use, production, input use, farm income and environmental effects of the farm
type for a specific policy. These outputs can be used directly or translated into
indicators (simple or composite) to provide measures of the impact of policies.
FSSIM-MP Overview
FSSIM-MP is a comparative static programming model with a non-linear objective
function representing important elements of a farmer's behaviour. FSSIM uses
exogenous prices that can come from different sources (in the base year they come
from Eurostat or/and FADN data and in the simulation they can come from a market
model, such as CAPRI). The principal FSSIM-MP specifications are:
(i) A mono-periodic model which optimizes an objective function for one
period (i.e. 1 year) over which decisions are taken. This implies that it does
not explicitly take account of time. Nevertheless, to incorporate some
temporal effects, agricultural activities are deined as “crop rotations” and
“dressed animal” instead of individual crops and animals.
(ii) A risk programming model based on the Mean-Standard deviation method in
which expected utility is deined under two arguments: expected income and
risk (Hazell and Norton 1986) .
(iii) An activity based model to enable integrated assessment of new policies
which are linked to an activity (i.e. production process).
(iv) A primal based model where technology is explicitly represented in order
to simulate the switch between production techniques as well as between
production systems.
(v) A model with discrete activities to integrate easily the engineering production
functions generated from biophysical models and to account for positive
and negative jointness in outputs (i.e., joint production) associated with the
production process.
(vi) A positive model in the sense that its empirical applications exploit the observed
behaviour of economic agents and where the main objective is to reproduce
the observed production situation as precisely as possible.
(vii) A generic model designed with the aim to be lexible, re-usable, adaptable and
easily extendable to achieve different modelling goals.
The mathematical structure of FSSIM-MP is formulated as follows:
Maximise: U = Z - φ σ
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