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Abstract
Objective of the Study: In 1974, Ericksen (5) observed that the analyses of production capacity involved four basic factors or types of information: (1) the supply relationship in both a positive and a normative economic sense, (2) demand of both the domestic and export sectors, (3) the resource base available to U.S. agriculture and (4) the nature of technological advance in agriculture (the productivity of resources in agriculture). AGSEM provides the capability to evaluate the relationships of these four factors within the U.S. agriculture using a highly aggregate mathematical programming model. The model is designed to trace the general impacts of exogenous factors on the performance of the U.S. food and fiber sector. It is not designed to make statistically precise estimates, but rather to identify the set of impacts, indicate their directions, and provide a preliminary estimate of their magnitude. The basic procedure is to identify the nature of the exogenous factor from sources outside the project and include it in the model in the form of revised coefficients, new production processes or restrictions. The methodology thus provides capability for (1) determining the relative importance and possible impacts of a multitude of potential issues, (2) assisting in the choice of particular issues that warrant more in-depth analyses and (3) integrating the results of other research projects that are in the specific areas of supply, demand, resources and technology.