Bioeconomic modelling of the production and export of cocoa for price policy analysis in Papua New Guinea

Fleming, Euan; Milne, Mary

doi:10.1016/s0308-521x(02)00078-1

Cited by 4 publications

(7 citation statements)

References 5 publications

(1 reference statement)

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“…The bio-economic model (BEM) is a comprehensive model combining farmers' economic behavior with agricultural systems' biophysical processes [33][34][35] and can be used to simulate the impact of agricultural technology progress, agricultural policy adjustment, and market changes on farmers' welfare, agricultural production and the rural eco-environment [36]. This study aims to assess the response of farmers' economic behavior to water resources management policy with the improvement of the technical efficiency of crop irrigation (TECI) and designs the simulation scenario, policy scenario, and compensation scenario to reflect the dynamic link between farmers' economic behavior and policy changes.…”

Section: Introductionmentioning

confidence: 99%

How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?

Zhou

Shi

2019

Sustainability

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Reducing agricultural water use is an inevitable choice to alleviate water shortage in arid and semi-arid regions, and high-efficiency irrigation technologies provide conditions for water conservation. However, without unified water resources management policy to redistribute the saved agricultural water, farmers’ behavior will lead to water rebound and large-scale expansion of cultivated areas, especially on the edge of oasis regions. To solve these issues and promote the sustainable development of water resources, it makes sense to explore the impact of unified water resources management policy from the perspective of farmers’ behavior. This study takes the typical irrigation zone in the Heihe River Basin as a case to discuss the response of farmers’ economic behavior to transferring irrigation water and restricting land reclamation, i.e., the unified water resources management policy with the technical efficiency of crop irrigation improved based on the bio-economic model. The results show that in the case of loosening land constraints, farmers will reuse all the saved water for agricultural production by reclaiming unused land or increasing the area of water-intensive crops (vegetables). Although the policy of restricting land reclamation can restrict land expansion, it cannot avoid water rebound caused by adjusting the crop-planting structure. Farmers’ land-expansion behavior can be largely restricted by transferring the saved irrigation water to non-agricultural sectors in irrigation zones with inadequate water, but to contain land-expansion behavior in irrigation zones with surplus water, the policy of restricting land reclamation must be implemented simultaneously. The study also reveals that farmers will choose to grow more cash crops (seed maize, vegetables, tomato, seed watermelon, potato, and rapeseed) and fewer food crops (wheat, maize) to increase the profit per unit of water in the scenario of loosening land constraints or transferring agricultural water. Furthermore, the study indicates that farmers’ economic income can be decreased or at least not increased with the transfer of agricultural water. Both benefit compensation from non-agricultural sectors and increased non-agricultural income can compensate farmers’ economic loss. Therefore, it is necessary to improve water rights trading systems and increase employment opportunities for surplus agricultural labor to promote economic development in rural areas.

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Section: Introductionmentioning

confidence: 99%

How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?

Zhou

Shi

2019

Sustainability

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“…In the long-term, farmers that are best equipped to capitalize on this "forest rent" are those with the technical know-how to exploit it for long-term gain. Fleming and Milne (2003) developed bioeconomic models to help policy-makers set priorities for the cocoa industry in Papua New Guinea. The authors developed two models, one for smallholders and one for estates, both of which included estimates of economic surplus; tree or palm area; land suitability; input-output relations; break-even values; export volumes and values; export price formation; and domestic price formation (Fleming and Milne, 2003).…”

Section: Bioeconomic Modelsmentioning

confidence: 99%

“…Fleming and Milne (2003) developed bioeconomic models to help policy-makers set priorities for the cocoa industry in Papua New Guinea. The authors developed two models, one for smallholders and one for estates, both of which included estimates of economic surplus; tree or palm area; land suitability; input-output relations; break-even values; export volumes and values; export price formation; and domestic price formation (Fleming and Milne, 2003). The models assessed various price policies to determine their effectiveness in maximizing economic surplus, including: short-term output price support; price stabilization; exchange rate manipulation; counter-cyclical planting subsidies; subsidies on purchased fertilizer inputs; and policies influencing the opportunity cost of rural labour (Fleming and Milne, 2003).…”

Section: Bioeconomic Modelsmentioning

confidence: 99%

“…The authors developed two models, one for smallholders and one for estates, both of which included estimates of economic surplus; tree or palm area; land suitability; input-output relations; break-even values; export volumes and values; export price formation; and domestic price formation (Fleming and Milne, 2003). The models assessed various price policies to determine their effectiveness in maximizing economic surplus, including: short-term output price support; price stabilization; exchange rate manipulation; counter-cyclical planting subsidies; subsidies on purchased fertilizer inputs; and policies influencing the opportunity cost of rural labour (Fleming and Milne, 2003). Of these different policy options, the authors found that fertilizer subsidies (a 10% reduction in the price of fertilizer) had the greatest impact on yield, increasing yields by 10% and economic surplus by 7% on smallholder farms and 9% on estates (Fleming and Milne, 2003).…”

Section: Bioeconomic Modelsmentioning

confidence: 99%

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The case for including additional long‐term oriented environmental data in coffee and cocoa futures forecasting models: an exploration

Daitchman¹

2021

Preprint

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Price discovery is a key function of the futures markets yet limited public information exists about the price‐building models used by market participants. To fill a gap in the literature, interviews were conducted with the largest coffee and cocoa traders, investors, and organizations to provide insight into the models they use to forecast supply and futures prices, with an emphasis on the environmental factors considered to have a significant impact on yield. Despite concerns in the academic literature about soil degradation and climate change affecting the future viability of these crops, market participants primarily based their forecasts on short‐term weather patterns that deviated from the norm, as per historical data. Participants’ near‐unanimous acknowledgement that low coffee and cocoa prices pose a threat to the sustainability of the industry suggests that there is room to price in long‐term factors into short‐term futures models.

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“…Agricultural policies affect soil degradation by influencing the socio-economic environment under which farm households operate. To measure such impact, several bioeconomic household models that incorporate a bioeconomic model with a household model have been developed 1,3,6,7,9,14,15 . In this paper a bioeconomic household model that incorporates household behavior and an agro-ecological process has been developed as the base of the analytical framework.…”

Section: Modelmentioning

confidence: 99%

Better Access to New Technologies and Credit Service, Farmers^|^prime; Land Use Decision, and Policy for Poverty Alleviation and Rangeland Conservation

Shi

Zhang

Wang

2005

JARQ

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This paper focuses upon the incompatibility between poverty alleviation and environmental conservation and the solution to the incompatibility in an agro-pastoral area of China. The effects on income and grazing pressure of restricting herd size, prohibiting rangeland reclamation, introduction of sedentary beef production, and credit provision were examined using linear programming in a cropping system and a pastoral system in Inner Mongolia, China. Eight scenarios on land use regulations were compared: unrestricted grazing with or without prohibition of rangeland reclamation, four grazing restrictions (1 or 2 sheep equivalent/ha; 5 or 10 sheep equivalent/person), and two grazing prohibitions (half-year or all year). Complete prohibition of rangeland reclamation and grazing reduced income, but with different effects in the two systems. Rangeland reclamation prohibition reduced income more in the cropping system (-26%) than in the pastoral system (-9%), while grazing prohibition reduced income more in the pastoral system (-55%) than in the cropping system (-14%). Grazing restrictions had little effect on income (0 to -9%) in the cropping system, but more severe restrictions (1 sheep equivalent/ha or 5 sheep equivalent/person) had major negative impact on income (-31% and -30% respectively) in the pastoral system. Introduction of sedentary beef production increased income under all three grazing restriction scenarios in both systems, by 30-42% in the cropping system and 3-18% in the pastoral system, relative to unrestricted grazing without land reclamation. Compared with no credit service, providing credit for poor households of the cropping system to introduce sedentary beef production increased their income by 51%, and increased income for poor households in the pastoral system under the grazing restriction of 1 sheep equivalent/ha by 416%.

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Bioeconomic modelling of the production and export of cocoa for price policy analysis in Papua New Guinea

Cited by 4 publications

References 5 publications

How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?

How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?

The case for including additional long‐term oriented environmental data in coffee and cocoa futures forecasting models: an exploration

Better Access to New Technologies and Credit Service, Farmers^|^prime; Land Use Decision, and Policy for Poverty Alleviation and Rangeland Conservation

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