Quota in Agricultural Positive Mathematical Programming Models
Buysse
Jeroen
Fernagut
Bruno
Harmignie
Olivier
Henry de Frahan
Bruno
Lauwers
Ludwig
PolomÃ©
Philippe
Van Huylenbroeck
Guido
Van Meensel
Jef
2005
In Belgium, an agricultural sector model for ex ante policy analysis is developed. The model,
called SEPALE, uses an adapted version of Positive Mathematical Programming allowing for
simultaneous modelling of individual farms. SEPALE applies farm level calibrated cost functions
to the sample of the Farm Accountancy Data Network to account for the large variability
among farms. Due to the recent discussion on the Sugar Common Market Organization
(CMO) reform, the need raises for an appropriate methodology to cope with quota in positive
programming models. Modelling quota at farm level implies three important challenges: i) estimation
of the marginal cost or the quota rent, ii) simulating over- or undersupply and iii)
quota exchange. Present paper describes a methodology dealing with the three quota issues.
Simulations of sugar beet policy options draw on the proposed approach. The paper also
demonstrates that other types of quota could benefit as well.
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