No full-text available
To read the full-text of this research,
you can request a copy directly from the authors.
Calibrating Disaggregate Economic Models of Agricultural Production and Water Management
Abstract
This paper describes calibration methods for models of agricultural production and water use in which economic variables can directly interact with hydrologic network models or other biophysical system models. We also describe and demonstrate the use of systematic calibration checks at different stages for efficient debugging of models. The central model is the California Statewide Agricultural Production Model (SWAP), a Positive Mathematical Programming (PMP) model of California irrigated agriculture. We outline the six step calibration procedure and demonstrate the model with an empirical policy analysis. Two new techniques are included compared with most previous PMP-based models: exponential PMP cost functions and Constant Elasticity of Substitution (CES) regional production functions. We then demonstrate the use of this type of disaggregated production model for policy analysis by evaluating potential water transfers under drought conditions. The analysis links regional production functions with a water supply network. The results show that a more flexible water market allocation can reduce revenue losses from drought up to 30%. These results highlight the potential of self-calibrated models in policy analysis. While the empirical application is for a California agricultural and environmental water system, the approach is general and applicable to many other situations and locations.
... Hydro-economic modeling has been used to assess the impacts of agricultural droughts in Spain, the United States, and China. Water management and response policies have also been proposed to minimize economic losses [29,30,[32][33][34][35]. In Nigeria, Spain, and Kenya, the economic value of drought forecasting information was assessed, and policy and technical measures were proposed to enhance farmers' adaptive capacity [37,38]. ...
... Policy analysis on agricultural drought has been conducted in Spain and Nigeria to evaluate the link between drought indexes and insurance schemes. The feasibility and economic valuation of climate change insurance schemes have been analyzed to suggest policy and technical measures to strengthen farmers' adaptive capacity [33][34][35]38,42]. The impacts of agricultural drought on water resource management have been analyzed. ...
... Some studies do not estimate quantitative drought damage but present qualitative effects in terms of percentage or probability of drought occurrence [28,32,33,39]. Most of the drought damage estimates using drought indexes and hydrological models suggest reducing qualitative impacts or improving drought management. ...
In recent years, the intensity and frequency of droughts have been increasing with the advent of the climate crisis. Agricultural droughts have a significant economic and social impact. Agricultural drought is not only a natural disaster but also leads to food security threats and reduced economic activities, such as decreased productivity. Therefore, it is very important to specify the scale of agricultural drought and quantitatively estimate the economic damage. In this study, we developed an analytical methodology to quantitatively assess the economic damage of agricultural drought and estimated the damage of agricultural drought in 2018 and 2019 for the Republic of Korea. The 2018 agricultural drought was estimated to have caused USD 4.438 million in damage cost and USD 5.180 million in recovery cost. The 2019 drought was less damaging than the previous year, with an estimated damage cost of USD 286,000 and recovery costs of USD 218,000. The results suggest that the economic impact of agricultural drought varies by region depending on the frequency and intensity of the drought and confirm the importance of regional strategies for effective drought management and response. The impacts of agricultural drought go beyond short-term agricultural losses and lead to long-term economic burdens. Therefore, the results of this study are expected to be used as a basis for understanding the impacts of agricultural drought on national economies and for developing policies and strategies to minimize impacts.
... In PMP, a production function between yields and input variables (i.e., water availability) is utilized to optimize input use such that net returns to land and management are maximized. The cost function in PMP formulation may be linear and/or non-linear to account for heterogeneity in inputs, as done by Howitt et al. (2012). Hence, PMP is highly suitable for irrigated arid basins where precipitation peak is off from the irrigation season and the farmer has information over water availability based on reservoir levels or snowpack information (Howitt, 1995;Howitt et al., 2012). ...
... The cost function in PMP formulation may be linear and/or non-linear to account for heterogeneity in inputs, as done by Howitt et al. (2012). Hence, PMP is highly suitable for irrigated arid basins where precipitation peak is off from the irrigation season and the farmer has information over water availability based on reservoir levels or snowpack information (Howitt, 1995;Howitt et al., 2012). However, traditional PMP approaches have limitations in modeling stochasticity in hydrologic component and economic environment (Maneta & Howitt, 2014) which limits extending it to mixed agricultural regimes, which receive significant amount of water through rainfall and supplemental irrigation from groundwater (Graveline, 2016;Heckelei & Wolff, 2003). ...
... However, governmental agencies such as extension services could provide detailed information on pumping units in some regions (Gonzalez-Alvarez et al., 2006;Harrison & Hook, 2005;Harrison & Skinner, 2012;Mullen et al., 2009). The estimates of annual irrigated acreage for some regions such as California and midwestern US (Howitt et al., 2012;Kukal & Irmak, 2018) are available through NASS. However, most regions report irrigated acreage at 5-yearly intervals posing a limitation. ...
Understanding the nexus between food, energy, and water systems (FEW) is critical for basins with intensive agricultural water use as they face significant challenges under changing climate and regional development. We investigate the food, energy, and water nexus through a regional hydroeconomic optimization (RHEO) modeling framework. The crop production in RHEO is estimated through a hierarchical regression model developed using a biophysical model, AquaCropOS, forced with daily climatic inputs. Incorporating the hierarchical model within the RHEO also reduces the computation time by enabling parallel programming within the AquaCropOS and facilitates mixed irrigation—rainfed, fully irrigated and deficit irrigation—strategies. To demonstrate the RHEO framework, we considered a groundwater‐dominated basin, South Flint River Basin, Georgia, for developing mixed irrigation strategies over 31 years. Our analyses show that optimal deficit irrigation is economically better than full irrigation, which increases the groundwater pumping cost. Thus, considering deficit irrigation in a groundwater‐dominated basin reduces the water, carbon, and energy footprints, thereby reducing FEW vulnerability. The RHEO also could be employed for analyzing FEW nexus under potential climate change and future regional development scenarios.
... Several such models have been developed for the MDB (Adamson et al., 2007;Grafton & Jiang, 2011;Hafi et al., 2009;Hall et al., 1994), often being applied to estimate the economic benefits of water trade or to simulate the effect of changes in supply. Similar models have been developed for other regions including California (Draper et al., 2003;Howitt et al., 2012). In some cases, water market models have been integrated with biophysical hydrology models (see Draper et al., 2003;Qureshi et al., 2013). ...
... While these models have proven useful, they remain subject to some widely acknowledged limitations including limited empirical validation (see Howitt et al., 2012;Qureshi et al., 2013). Typically, past water market models have been "underdetermined" (with more free parameters than data points) necessitating various calibration methods (see Howitt et al., 2012;Qureshi et al., 2013). ...
... While these models have proven useful, they remain subject to some widely acknowledged limitations including limited empirical validation (see Howitt et al., 2012;Qureshi et al., 2013). Typically, past water market models have been "underdetermined" (with more free parameters than data points) necessitating various calibration methods (see Howitt et al., 2012;Qureshi et al., 2013). ...
Within the Australian southern Murray‐Darling Basin (sMDB) water markets have become a key institutional response to water scarcity and environmental problems. These markets facilitate trading of water among many users and across multiple connected regions. Increasingly, these markets also support intertemporal transfers via the carryover of user water allocations within public water storages. While trading can improve the spatial allocation of water, carryover can improve the temporal allocation by ensuring storage reserves reflect prevailing user preferences. This paper presents an economic model of water markets and irrigated agriculture in the sMDB. A reduced‐form statistical model of water demand is estimated using historical irrigation and water market data. This statistical model is placed within an economic partial‐equilibrium framework accounting for both interregional trade and interyear carryover. The model is solved numerically for a dynamic market equilibrium given assumptions over future stochastic water supplies. Out‐of‐sample tests show the model can realistically simulate water market prices and irrigation activity across the basin. The model is applied to estimate the economic benefits of interregional water trading and interyear carryover. Results show around a third of the economic benefits of water markets in the region can be attributed to interyear carryover.
... We identified the hotspot of population change spatially and seasonal variations in population across different combined climate and land use scenarios in the Central Valley, California. We applied the change factors from land use optimization models (Howitt et al. 2012) to the remote-sensing information to capture the agricultural land use change with climate change and characterize the landscape and habitat information spatially. This is possible with the application of remote-sensing information that not only makes economic optimization spatially explicit but also makes the prediction surface at a scale, which improves the predictive performance of other modeling efforts applied in this area, such as SDMs that use only typo-climatic variables (Schwager and Berg 2021;Deneu et al. 2022;Pinto-Ledezma and Cavender-Bares 2021) and not socioeconomic cropland dynamics. ...
... The economic model uses historical agricultural use of input (i.e., land and water), crop yields, costs, and revenues in its calibration. Following Howitt et al. (2012), the calibrated non-linear optimization model optimizes agricultural economic incomes by allocating land and water to crops. This modeling approach has shown multiple applications (Heckelei et al. 2012) and accurately represented the dynamics of agricultural production and changes to water availability (Cortignani and Severini 2009), climate change (Withey and Cornelis Van Kooten 2011), and water management (Shirzadi Laskookalayeh et al. 2022). ...
Conservation planning that enhances the resiliency of biodiversity to climate change requires adaptive water and land use decision‐making in the most cost‐efficient way. This has many challenges since landscapes with high biodiversity can embrace intense human production activities, particularly agriculture. Conventionally, water and land used for conservation are often regarded as tradeoffs to agricultural productivity. However, this study found that agricultural water and land use synergize with shorebird conservation in the Central Valley, California. If informed decisions are made to guide strategic land use, landscapes can adapt to climate change and offer multiple benefits. This study used a coupled economic optimization model with a species distribution model to consider human factors in ecological impacts. The objective was to assess the impacts of agricultural water and land use decisions under different climate change scenarios on 10 shorebird species populations in California's Central Valley. Our results showed that strategic water and land management can offer favorable habitats to targeted shorebirds with a land composition including diversified crop categories complementary to wetlands. This study demonstrates that agricultural lands can be as important as wetlands to shorebirds to sustain their migratory stages throughout the year. Wetland restoration without species habitat preference information can lead to population shrinkage since wetland types vary in habitat importance to the shorebird species studied in this research. Business as usual, along with land use and climate change, will decrease shorebirds' breeding season and population to the same degree as they impact non‐breeding populations. The synergies between agricultural production and shorebird conservation were found in the scenarios that favor agricultural production water use but also favor habitat provisioning to shorebirds in the Central Valley, California, under climate change.
... The preferred approach for calibrating farming models is now positive mathematical programming (PMP), which is an effective tool for estimating crop-specific marginal cost functions and replicating farmers' observed crop allocations exactly. The use of PMP in trade modeling and other resource management settings has increased (Howitt, 1995;Howitt et al., 2012;Liu et al., 2020;Mérel and Howitt, 2014). This method has been extended over time by incorporating external information, like supply elasticities, and the principle of maximum entropy (ME), to acquire parameter estimates for the whole cost matrix (Howitt, 1995;Howitt et al., 2012;Liu et al., 2020;Mérel and Howitt, 2014). ...
... The use of PMP in trade modeling and other resource management settings has increased (Howitt, 1995;Howitt et al., 2012;Liu et al., 2020;Mérel and Howitt, 2014). This method has been extended over time by incorporating external information, like supply elasticities, and the principle of maximum entropy (ME), to acquire parameter estimates for the whole cost matrix (Howitt, 1995;Howitt et al., 2012;Liu et al., 2020;Mérel and Howitt, 2014). ...
The agricultural sector is recognized as particularly vulnerable to the effects of climate change. In semi-arid areas, the performance and durability of irrigated systems are often difficult to manage. Understanding agri-culture's response to water scarcity, institutional change and policy interventions is important in order to better define the different agricultural development pathways. The purpose of this paper is to carry out an economic assessment of the costs of groundwater over-exploitation in the Maghreb. This was achieved by using bio-economic modeling in three case studies: the Saïss plain (Morocco), El Haouaria plain (Tunisia) and Sétif plain (Algeria). A set of indicators (land use, farm gross margin, the dual value of water and labor requirements) was calculated for each case study in two scenarios (a business-as-usual (S_BAU) scenario and a return-to-equilibrium (S_RtE) scenario) over a period of 15 years, from 2021 to 2035. Our results show that (i) the state of the aquifer and its over-exploitation level determine the extent of future changes; (ii) in the case of significant groundwater over-exploitation, restoration costs are higher than over-exploitation costs (Saïss plain); on the other hand, in the case where the over-exploitation rate is lower (El Haouaria and Sétif plains), the over-exploitation and restoration costs are close; (iii) both scenarios show significant structural and social changes, and without the effective implementation of environmental and social policies, they lead to high economic losses.
... The mathematical model is based on Positive Mathematical Programming (PMP) formalized by Howitt (1995). PMP is a HEM method that uses observed agricultural production behavior to define a constrained non-linear optimization model, used to simulate water allocation for policy analysis assuming profit maximization (Graveline, 2020;MacEwan et al., 2017;Howitt et al., 2012;Rodríguez-Flores et al., 2019). In this study we implement a PMP calibration that uses a stochastic data assimilation method to calibrate the economic parameters described by Maneta and Howitt (2014) and Maneta et al. (2020). ...
... = ( − 1)∕ , where is the elasticity of substitution between inputs used to produce each crop. For this study we defined = 0.17 following Howitt et al. (2012). The scale parameter and are calibrated using the first order conditions of the first step of the PMP calibration process (SM 2). ...
Increasing irrigation demand has heavily relied on groundwater use, especially in places with highly variable water supplies that are vulnerable to drought. Groundwater management in agriculture is becoming increasingly challenging given the growing effects from overdraft and groundwater depletion worldwide. However, multiple challenges emerge when seeking to develop sustainable groundwater management in irrigated systems, such as trade-offs between the economic revenues from food production and groundwater resources, as well as the broad array of uncertainties in food-water systems. In this study we explore the applicability of Evolutionary Multi-Objective Direct Policy Search (EMODPS) to identify adaptive irrigation policies that water agencies and farmers can implement including operational decisions related to land use and groundwater use controls as well as groundwater pumping fees. The EMODPS framework yields state-aware, adaptive policies that respond dynamically as system state conditions change, for example with variable surface water (e.g., shifting management strategies across wet versus dry years). For this study, we focus on the Semitropic Water Storage district located in the San Joaquin Valley, California to provide broader insights relevant to ongoing efforts to improve groundwater sustainability in the state. Our findings demonstrate that adaptive irrigation policies can achieve sufficiently flexible groundwater management to acceptably balance revenue and sustainability goals across a wide range of uncertain future scenarios. Among the evaluated policy decisions, pumping restrictions and reductions in inflexible irrigation demands from tree crops are actions that can support dry-year pumping while maximizing groundwater storage recovery during wet years. Policies suggest that an adaptive pumping fee is the most flexible decision to control groundwater pumping and land use.
... Hydro-economic models have been utilized by water resource managers for decades (Brouwer and Hofkes, 2008;Harou et al., 2009). These models are used at various spatial and temporal scales to analyze, anticipate and manage competing demands between water supply systems and agriculture under different climate extremes (Esteve et al., 2015;Falloon and Betts, 2010;Maneta et al., 2009;Medellín-Azuara et al., 2011;Torres et al., 2012;Ward et al., 2006), and the influence of economic and policy scenarios (Ghosh et al., 2014;Howitt et al., 2012;Varela-Ortega et al., 1998). There are numerous studies that implement hydro-economic models with a focus on irrigated agriculture (Borrego-Marín et al., (2020); Connell-Buck et al., 2011;Ghosh et al., 2014;Medellín-Azuara et al., 2011;Ward et al., 2006), but fewer studies have focused on regions with mixed rainfed and irrigated crops (Maneta et al., 2009;Siderius et al., 2016). ...
... However, their study showed that shifting to higher value crops, over less land, may translate into increased revenue per unit area in California. Likewise, farmers may choose to fallow their land and sell or lease their water to other users (Ghosh et al., 2014;Howitt et al., 2012). Montana has a limited crop portfolio and does not have a climate suitable for widespread production of high value crops that can be used to mitigate economic losses in the way California could. ...
Study region,Montana, U.S.A. Study focus Creating adaptation plans for projected imbalances in the western U.S. agricultural water demand-supply system are difficult given uncertainty in climate projections. It is critical to understand the uncertainties and vulnerabilities of the regional agricultural system and hydrologic impacts of climate change adaptation. We applied a sto-chastic, integrated hydro-economic model that simulates land and water allocations to analyse Montana farmer adaptations to a range of projected climate conditions and the response of the hydrologic system to those adaptations. Satellite observations of crop types, productivity, water use, and land allocation were used for model calibration. A suite of climate models was employed to quantify end-of-century impacts on streamflows, water and land use, production, and net revenues.New hydrological insights for the region Simulations showed summer streamflows were influenced by a statewide 18.2% increase in agricultural water use. Decreased summer water availability with increased demand could have far reaching impacts downstream. Land use for irrigated crops increased 1.6%, while rainfed crops decreased 6.5%, implying state-level decrease in planted area. Even with increased land and water use for irrigated crops, production decreased 0.5%, while rainfed production decreased 2.7%. Corresponding losses in net revenues totaled 1.5% and 7.2% for irrigated and rainfed crops, respectively.Results highlight vulnerabilities of semi-arid agricultural regions and can aid water managers in sustaining agriculture in these regions.
... However, under this policy the ecosystem status improves in some river reaches but worsens in other reaches. Environmental water markets require also stakeholders' cooperation as an essential ingredient to curtail losses from water scarcity, and achieve the "good ecological status" of water bodies promoted by European legislation [85][86][87][88][89][90][91][92]. Well functioning environmental water markets would enhance social benefits [89][90][91][92], but this entails the support of strong institutions fostering collective action [29], which would prevent third party effects that mostly affect the environment. ...
... Environmental water markets require also stakeholders' cooperation as an essential ingredient to curtail losses from water scarcity, and achieve the "good ecological status" of water bodies promoted by European legislation [85][86][87][88][89][90][91][92]. Well functioning environmental water markets would enhance social benefits [89][90][91][92], but this entails the support of strong institutions fostering collective action [29], which would prevent third party effects that mostly affect the environment. ...
The increasing concern about the degradation of water-dependent ecosystems calls for considering ecosystems benefits in water management decision-making. Sustainable water management requires adequate economic and biophysical information on water systems supporting both human activities and natural ecosystems. This information is essential for assessing the impact on social welfare of water allocation options. This paper evaluates various alternative water management policies by including the spatial and sectoral interrelationships between the economic and environmental uses of water. A hydroeconomic model is developed to analyze water management policies for adaptation to reduced water availability in the Ebro Basin of Spain. The originality in our contribution is the integration of environmental benefits across the basin, by using endemic biophysical information that relates stream flows and ecosystem status in the Ebro Basin. The results show the enhancement of social welfare that can be achieved by protecting environmental flows, and the tradeoffs between economic and environmental benefits under alternative adaptation strategies. The introduction of water markets is a policy that maximizes the private benefits of economic activities, but disregards environmental benefits. The results show that the current institutional policy where stakeholders cooperate inside the water authority, provides lower private benefits but higher environmental benefits compared to those obtained under water markets, especially under severe droughts. However, the water authority is not allocating enough environmental flows to optimize social welfare. This study informs strategies for protection of environmental flows in the Ebro Basin, which is a compelling decision under the imminent climate change impacts on water availability in coming decades.
... For water resources planning applications, an economic optimization model typically guides discovery of a water development or use plan that achieves a maximum economic benefit or minimum economic cost of achieving a well-defined goal. Properly calibrated, an optimization model could match actual observed historical water use patterns based on observed water supply conditions and historical policies in place (Buysse et al., 2007;Cortignani and Severini, 2009;Heckelei and Wolff, 2003;Howitt, 1995;Howitt et al., 2012;Kanellopoulos et al., 2010;Paris and Howitt, 1998;Rohm and Dabbert, 2003;Ward et al., 2019). A good example is a model recently developed to predict historical aquifer depletion and pumping patterns over time for the base policy and starting aquifer conditions (Ward et al., 2019). ...
... If an optimization model can be calibrated to replicate historical use patterns (Buysse et al., 2007;Cortignani and Severini, 2009;Heckelei and Wolff, 2003;Howitt, 1995;Howitt et al., 2012;Iglesias and Blanco, 2008;Medellin-Azuara et al., 2010;Rohm and Dabbert, 2003), it is likely to see growing use to assess impacts of several kinds of changes, such as: ...
Allocation of water over its six dimensions of quantity, quality, timing, location, price, and cost remains an ongoing challenge facing water resource planning worldwide. This challenge is magnified with growing evidence of climate change and related water supply stressors. This stress will challenge food, energy, and water systems as climate adaptation policy measures see continued debate. Despite numerous achievements made many by previous works, few attempts have scanned the literature on economic optimization analysis for water resources planning to discover affordable climate adaptation measures. This paper aims to fill that gap by reviewing the literature on water resource optimization analysis at the basin scale to guide discovery of affordable climate adaptation measures. It does so by posing the question “What principles, practices, and recent developments are available to guide discovery of policy measures to improve water resource system adaptions to growing evidence of climate water stress?” It describes past achievements and identifies improvements needed for optimization analysis to inform policy debates for crafting plans to improve climate resilience. It describes an economic conceptual framework as well as identifying data needs for conducting economic optimization exercises to support river basin planning faced by the challenge of managing the six water dimensions described above. It presents an example from an ongoing issue facing water planners in the Middle East. Conclusions find considerable utility in the use of economic optimization exercises to guide climate water stressadaptation. Any use of trade, firm, or product names is for descriptive purposes only and does not imply endorsement by the U.S. Government.
... Some studies include more flexible functions such as Constant Elasticity of Substitution (CES) (Edwards et al., 1996;Howitt, 1995b). Among others, Howitt et al. (2012), describe includes the estimation of CES regional production functions. Graindorge et al. (2000) use a CES specification as Medellín-Azuara et al. (2010) do to obtain the agricultural water economic value. ...
CONTEXT: The concurrent global demands of ensuring food production, preserving the environment, and responsibly managing natural resources, shape the formulation of EU policies, influencing farmers’ decision-making processes and production activities. In this context the Farm to Fork Strategy plays a crucial role, setting specific targets such as a 50 % and a 20 % reduction in pesticides and fertilizers use by 2030.
OBJECTIVE: This paper addresses the growing concern regarding the potential adverse effects of the Farm to Fork Strategy’s targets on EU agricultural production, with a particular focus on Italian arable farms cultivating maize.
The objectives are to analyze the impact of F2F targets on chemical reduction on Italian arable farms and maize grain production, identifying vulnerable areas and farms.
METHODS: A Farm Accountancy Data Network sample of 395 arable farms is analyzed through an integrated approach, combining an agro-economic supply model with an econometrically estimated translog production function. This integration enhances the model’s flexibility, endogenizing maize grain gross saleable product, fertilizers, and pesticide quantities. This approach enables an assessment of the F2F targets’ economic impacts in terms of economic variables and resource use, production output, and chemical intensity at the farm and crop level.
... Additionally, the group assumed delta smelt population augmentation, the bioacoustic barrier, and Chinook salmon trap and transport would have no effect on water availability and variability. (Howitt et al., 2012). Under no shortages of water, farmers produced the base amount of crops with benefits. ...
A structured decision making (SDM) approach can help evaluate tradeoffs between conservation and human-benefit objectives by fostering communication and knowledge transfer among stakeholders, decision makers, and the public. However, the process is iterative and completing the full process may take years. It can be difficult to initiate an SDM effort when problems seem insurmountable. Occasionally, SDM may not even be the best or correct approach for addressing the conservation problem at hand. We describe the implementation of an SDM process to help inform difficult decisions related to competing objectives. We convened a diverse stake-holder group from the largest estuary in the western United States; the San Francisco Bay and Sacramento-San Joaquin Delta (Bay-Delta). The stakeholder group consisted of representatives from local, state, and federal agencies, non-profit organizations, and recreational fishers. The stakeholder group agreed on a problem statement and identified four priority objectives related to Chinook salmon, delta smelt, water availability and reliability, and agricultural water use. Furthermore, they proposed 14 candidate management actions to achieve their objectives. The group then used existing quantitative models and data to evaluate trade-offs in proposed management actions to identify areas of agreement of proposed candidate actions. The clear communication of the problem statement and objectives among the stakeholder group, along with evaluation of tradeoffs and uncertainty via decision-support models suggest that a full SDM approach may work in the Bay-Delta. We further communicate lessons learned during our implementation of SDM to help guide future SDM efforts in the region and elsewhere.
... The quadratic PMP calibration coefficients represent the unobserved costs of agricultural production activities (Garnache et al., 2017). These unobserved costs reflect the technological, environmental, and market constraints facing individual farmers (Howitt et al., 2012;Paris and Howitt, 1998). The coefficients are derived from regional data about crop acreages since land use data are more comprehensive and accurate than direct estimates of marginal costs (Howitt, 1995). ...
Large-scale hydrological models (LHMs) are commonly used for regional and global assessment of future water shortage outcomes under climate and socioeconomic scenarios. The irrigation of croplands, which accounts for the lion's share of human water consumption, is critical in understanding these water shortage trajectories. Despite irrigation's defining role, LHM frameworks typically impose trajectories of land use that underlie irrigation demand, neglecting potential dynamic feedbacks in the form of human instigation of and subsequent adaptation to water shortages via irrigated crop area changes. We extend an LHM, MOSART-WM, with adaptive farmer agents, applying the model to the continental United States to explore water shortage outcomes that emerge from the interplay between hydrologic-driven surface water availability, reservoir management, and farmer irrigated crop area adaptation. The extended modeling framework is used to conduct a hypothetical computational experiment comparing differences between a model run with and without the incorporation of adaptive farmer agents. These comparative simulations reveal that accounting for farmer adaptation via irrigated crop area changes substantially alters modeled water shortage outcomes, with US-wide annual water shortages being reduced by as much as 42 % when comparing adaptive and non-adaptive versions of the model forced with US climatology from the period 1950–2009.
... The price of tanker water depends on the marginal resource opportunity costs (MROC) of water, defined as the marginal value of water at its source, varying across space and time 57,58 . Here these MROC of water at rural wells are determined by a positive mathematical programming (PMP) model 59 Well production and yield data are based on a US Geological Survey well survey (n = 8,200) 62 . Since irrigated agriculture is constrained by scarce rural freshwater sources, we assume that water sold on the tanker market could always be used for agriculture. ...
Scarce and unreliable urban water supply in many countries has caused municipal users to rely on transfers from rural wells via unregulated markets. Assessments of this pervasive water re-allocation institution and its impacts on aquifers, consumer equity and affordability are lacking. We present a rigorous coupled human–natural system analysis of rural-to-urban tanker water market supply and demand in Jordan, a quintessential example of a nation relying heavily on such markets, fed by predominantly illegal water abstractions. Employing a shadow-economic approach validated using multiple data types, we estimate that unregulated water sales exceed government licences 10.7-fold, equalling 27% of the groundwater abstracted above sustainable yields. These markets supply 15% of all drinking water at high prices, account for 52% of all urban water revenue and constrain the public supply system’s ability to recover costs. We project that household reliance on tanker water will grow 2.6-fold by 2050 under population growth and climate change. Our analysis suggests that improving the efficiency and equity of public water supply is needed to ensure water security while avoiding uncontrolled groundwater depletion by growing tanker markets.
... Positive mathematical programming (PMP), an innovative model calibration method (Buysse et al., 2007;Cortignani and Severini, 2009;Heckelei and Wolff, 2003;Howitt, 1995;Howitt et al., 2012;Iglesias and Blanco, 2008;Kanellopoulos et al., 2010;Medellin-Azuara et al., 2010;Paris and Howitt, 1998;Rohm and Dabbert, 2003;Wing et al., 2008) is used in the construction of the groundwater pumping optimization model and is characterized by observed data on pumping, pumping depth, and farm income. It is a state-of-the art methodology for formulating scenarios where policy assessments are being investigated (Paris, 2010). ...
... costs or benefits and is calibrated using shadow values of the calibration constraints, PMP can replicate base year activity levels and resource allocation without artificial constraints while generating smooth responses to changes in the economic environment (Frahan et al., 2007;Garnache et al., 2017;Mérel and Howitt, 2014). With explicit technology representation, PMP can be conveniently linked with biophysical models for policy analysis (Heckelei et al., 2012;Howitt et al., 2012;Medellín-Azuara et al., 2012). The PMP cost functions in this model are calibrated using observed base year crop areas, water uses, production costs and crop revenues following the procedures in Howitt (1995) and Zhu et al. (2015). ...
Water shortage and soil salinization are the key limiting factors in agricultural production of arid and semi-arid regions. Located in western Inner Mongolia of China, the Hetao Irrigation District (HID) is one of the top three largest irrigation districts in China. Irrigation water overuse and high level of soil salinity have curbed the agricultural productivity, adversely affected farmers’ revenues, and threatened long-term sustainability of irrigated farming in the HID. Nevertheless, opportunities still exist to improve the situation. Irrigation water allocation, salt accumulation and leaching, crop productivity and farming decisions are intrinsically connected and thus require taking a holistic approach to investigate into the interactions among all those factors and devise appropriate technological, management and policy interventions. Towards this goal, we develop an integrated hydro-agro-economic optimization model to reconcile agricultural net revenue, irrigation practices, and environmental sustainability in the HID. Positive Mathematical Programming is used for model calibration to ensure the model can replicate the base year observations of crop acreage, making the model suitable for evaluating alternative scenarios. Scenario analyses are conducted to analyze the effects of water supply reduction, reducing winter irrigation, water-saving irrigation, and crop commodity price change on optimal agricultural water management practices. Results show that water supply reduction without complementary measures increases land fallow, exacerbates soil salinization, and reduces net benefits. Winter irrigation can conserve soil moisture and increase the net salt leaching in the root zone, and a reduction in winter irrigation will incur a benefit loss to the HID. Water-saving irrigation can stabilize planting areas under water shortage but exacerbate soil salinization. Price increase of a cash crop, if it has a large area share, tends to “crowd out” grain crops growing in the same season. These results provide a holistic perspective and useful insights for water management and policy in the HID.
... We modeled the agricultural production system following PMP (Howitt et al. 2012) using two baselines: the average of 2010-2012 (wet period) and the average of 2013-2015 (dry period). The average of these years was taken from observed data used in the calibration process. ...
Assessing impacts on coupled food-water systems that may emerge from water policies, changes in economic drivers and crop productivity requires an understanding of dominant uncertainties. This paper assesses how a candidate groundwater pumping restriction and crop prices, crop yields, surface water price, electricity price, and parametric uncertainties shape economic and groundwater performance metrics from a coupled hydro-economic model (HEM) through a diagnostic global sensitivity analysis (GSA). The HEM used in this study integrates a groundwater depth response, modeled by an Artificial Neural Network (ANN), into a calibrated Positive Mathematical Programming (PMP) agricultural production model. Results show that in addition to a groundwater pumping restriction, performance metrics are highly sensitive to prices and yields of perennial tree crops. These sensitivities become salient during dry years when there is a higher reliance on groundwater. Furthermore, results indicate that performing a GSA for two different water baseline conditions used to calibrate the production model, dry and wet, result in different sensitivity indices magnitudes and factor prioritization. Diagnostic GSA results are used to understand key factors that affect the performance of a groundwater pumping restriction policy. This research is applied to the Wheeler Ridge-Maricopa Water Storage District located in Kern County, California, region reliant on groundwater and vulnerable to surface water shortages.
... This model was applied in three regions of Italy. Finally, Howitt et al. [48] in their work describe calibration methods for models of agricultural production and water use, where economic variables can directly interact with models of biophysical systems. ...
The aim of this study is to compare three mathematical programing models used for sustainable land and farm management. The sample for the comparison was 219 agricultural holdings participating as beneficiaries of the measure ‘Modernization of agricultural holdings’ in the Rural Development Plan at the Region of Central Macedonia in Greece. Using the crop plan of the agricultural land of these farms the mathematical programming models calculate the optimum solution under different and conflicting goals. The results of the methodologies of Linear Programming (LP), of Positive Mathematical Programming (PMP) and Weighted Goal Programming (WGP), are compared in terms of the proposed agricultural land changes. The sustainability of farms is measured with the use of eleven economic, social, and environmental indicators. Each model has some unique advantages and disadvantages that can enable it to be implemented in particular situations. In the conclusions to this research the characteristics of each model are highlighted.
... Furthermore, g,i is the CES technology parameter, i = (s − 1) ∕ s where s is the elasticity of substitution between inputs. Following Howitt et al. (2012), the elasticity of substitution parameter is set to be 0.22, because the elasticity of substitution between inputs is generally low in agricultural production. The parameter denotes the returns to scale parameter, and , = ( 1 g,i , … … , j g,i ) is the vector of share coefficients of inputs. ...
Since non-commercial users of land may not have the typical goal of profit-maximization as in the case of commercial users—it is important to understand how differently the former type of users may respond to a significant change in policy, such as property tax rules. In the present paper, to demonstrate this divergence, we take the recent case of Maui County’s proposed market-value assessment (MVA)-based property tax, which is expected to increase the tax bills substantially mainly for non-commercial users. We modified and expanded an economic model of land use and food production of Hawaii, developed in 2012—based on a positive mathematical programming (PMP) technique—to simulate the proposed tax policy to determine heterogeneous impacts across different usages. Our simulations suggest that such policy changes will have moderate impacts on commercial food production, but large impacts on its non-commercial counterpart. Although it may be expected that non-commercial producers in operation without profits would contract first in response to an adverse policy, our study confirms that their intangible benefits are inferior relative to the profits that commercial users garner. Non-commercial users, such as hobby farmers are usually thought to have an altruistic motive, which may no longer be sustainable under a rigid property tax regime. Since non-commercial food production accounts for a small amount of total production, the overall effect will be moderate. However, the outcomes offer a better understanding of how aggressive policies may affect different segments of property users differently.
... Besides, in the policy of reducing the available water, the cropping pattern has not been changed from irrigated and rainfed agriculture, but there has been a significant saving in the water consumption. Howitt et al. (2012) introduced a separate calibration model of agricultural production and water management by utilizing a positive mathematical programming approach. Their results showed that income increases by 30% through more flexible allocation of water market under drought conditions. ...
Given rapid socio-economic development, increasing food demand and decreasing available resources, the challenge of seasonal fluctuations of surface water has become a major problem in the agricultural sector, causing a change in consumption from surface water to groundwater resources and reduction of farmers' income. Therefore, optimal programming of the cropping pattern is necessary to handle such challenges. To accomplish this aim, a model of irrigation water allocation was developed based on cropping pattern using multistage stochastic programming in accordance with surface water supply fluctuations. In this model, different stochastic states were considered for all irrigation seasons in the irrigation network of the Jiroft plain in Kerman Province, Iran, which faces a severe shortage of surface water resources and the tendency of farmers to overuse groundwater resources. By solving a multistage stochastic model, it can be observed that, by utilizing an appropriate programming of the cropping pattern, more benefits for the farmers could be realized in the conditions of available surface water fluctuations. The results also indicated that if the surface water released into the canals increased in the spring, the share of profitable high water consumption crops in the pattern will increase, which will strengthen farmers' profits and put pressure on groundwater resources. However, this could not be expected to lead to a significant reduction of groundwater resource consumption and a significant increase of cropping intensity. According to the results obtained, surface water resources cannot meet the water needs of the region, even by using optimal cropping patterns, and this has led to overuse of groundwater resources in this area. Finally, such planning can help adoption of desired policies for irrigation water management through the proper release of these resources.
... The calibration process of the EOM included several steps and was validated in each step using the calibration tests suggested by Howitt et al. (2012). First, we divided the region of interest to 30 subdistricts (Figure 1), based on differences in hydrological and climatic conditions, as well as crop patterns and irrigation district affiliation. ...
Managed aquifer recharge (or intentional recharge) is a purposeful human intervention designed to supplement natural enrichment processes of groundwater aquifers by various methods. It holds the potential to mitigate the impact of climate uncertainty on irrigated agriculture by restoring storage levels in depleted aquifers, the economic value of which increases during droughts. We use a high-resolution dynamic regional hydroeconomic framework that endogenizes farming decisions in response to water quantity-quality changes, as well as complex hydrogeological principles to analyze several institutional designs and climate scenarios applied to the Kings Groundwater Basin in California. Our analysis demonstrates that intentional recharge is of high benefit to the region, potentially increasing average groundwater levels in the region by 20% over a 20-year horizon. Additionally, we show how this practice could become the subject of second-best arrangements among water users in the region in view of property rights to groundwater derived from recent legislation in California, thus increasing its materialization potential. However, we also find that the quantity recharged is sensitive to climate conditions and hydrological properties.
... This approach provides decision support tools for conjunctive management of surface and groundwater, contributing to improving management strategies that promote efficiency and transparency in water use, as discussed in detail in Jackeman et al. (2016). In the Santa Maria River basin study , the hydroeconomic model resolved water allocation by following linear piece-wise economic penalty functions, developed from the marginal economic benefit functions calculated by the agricultural production model (Howitt et al., 2012). ...
This chapter explores how conjunctive use operations of groundwater and surface water can be implemented to improve water supply reliability to urban and irrigated agriculture demands in Southern Brazil. We discuss the application of conjunctive use strategies and water management instruments under a comprehensive and integrated approach to improve water supply reliability and flexibility in a sustainable way. The discussion is followed by field examples where such strategies should build upon. We believe such combination is necessary to allow groundwater resources to fully contrib- ute to promoting economic growth in the long run, going beyond the aquifer and in- corporating its operation to broader and integrated water management required under the challenges ahead.
... Hydroeconomic analysis (HEA) has been a state-of-the arts approach for integrating physical and economic dimensions of water resource systems to guide policy debates (Booker et al., 2012;Boucher et al., 2012;Brouwer and Hofkes, 2008;Esteve et al., 2015;Foudi et al., 2015;George et al., 2011;Goor et al., 2011;Guan and Hubacek, 2007;Guan and Hubacek, 2008;Harou and Lund, 2008;Harou et al., 2010;Harou et al., 2009;Heinz et al., 2007;Howitt et al., 2012;Jalilov et al., 2016;Kahil et al., 2015;Klein and Whalley, 2015;Kragt et al., 2011;Maneta et al., 2009;Pulido-Velazquez et al., 2008;Qureshi et al., 2013;Varela-Ortega et al., 2011;Verkade and Werner, 2011;Ward and Pulido-Velazquez, 2008;Yang et al., 2016). This capacity of HEM to guide policy choices sees growing importance in light of ongoing debates over methods to inform policy design for adapting to climate-water stress. ...
Climate water stress internationally challenges the goal of achieving food, energy, and water security. This challenge is elevated by population and income growth. Increased climate water stress levels reduce water supplies in many river basins and elevate competition for water among sectors. Organized information is needed to guide river basin managers and stakeholders who must plan for a changing climate through innovative water allocation policies, trade-off analysis, vulnerability assessment, capacity adaptation, and infrastructure planning. Several hydroeconomic models have been developed and applied assessing water use in different sectors, counties, cultures, and time periods. However, none to date has presented an optimization framework by which historical water use and economic benefit patterns can be replicated while presenting capacity to adapt to future climate water stresses to inform the design of policies not yet been implemented. This paper's unique contribution is to address this gap by designing and presenting results of a hydroeconomic model for which optimized base conditions exactly match observed data water use and economic welfare for several urban and agricultural uses at several locations in a large European river basin for which water use supports a population of more than 3.2 million. We develop a state-of-the arts empirical dynamic hydroeconomic optimization model to discover land and water use patterns that optimize sustained farm and city income under various levels of climate-water stress. Findings using innovative model calibration methods allow for the discovery of efficient water allocation plans as well as providing insight into marginal behavioral responses to climate water stress and water policies. Results identify that water trade policy under climate water stress provides more economically efficient water use patterns, reallocating water from lower valued uses to higher valued uses such as urban water. The Ebro River Basin in Spain is used as an example to investigate water use adaptation patterns under various levels of climate water stress. That basin's issues and challenges can be of relevance to other river basins internationally.
... Surface water storage cost is derived from Equation (8). The agricultural water scarcity cost is the product of the unit cost of delivery links and the difference between flow in the link and target delivery derived from the Statewide Agriculture Production model [70,71]. We multiplied the unit cost with the flow value in the link for all other delivery and operation costs. ...
Frequent and prolonged droughts challenge groundwater sustainability in California but managing aquifer recharge can help to partially offset groundwater overdraft. Here, we use managed aquifer recharge (MAR) to examine potential benefits of adding an artificial recharge facility downstream from California’s Lower American River Basin, in part to prepare for drought. We use a statewide hydroeconomic model, CALVIN, which integrates hydrology, the economics of water scarcity cost and operations, environmental flow requirements, and other operational constraints, and allocates water monthly to minimize total scarcity and operating costs. This study considers a recharge facility with unconstrained and constrained flows. The results show that adding a recharge facility increases groundwater storage, reduces groundwater overdraft, and increases hydropower without substantially impacting environmental flows. Further, artificial recharge adds economic benefits by (1) reducing the combined costs of water shortage and surface water storage and (2) by increasing hydropower revenue. This study provides a benchmark tool to evaluate the economic feasibility and water supply reliability impacts of artificial recharge in California.
... We also observe the potential implications of N runoff abatement efforts for water use within the MRB. With N and irrigation as substitute production factors to some extent (Howitt et al., 2012;Mérel et al., 2014), one can expect irrigation to increase in response to stricter regulation of N use. This outcome, as a co-effect of policies that aim to reduce N runoff, is important to consider because water scarcity is a significant challenge in some regions within the MRB. ...
An integrated hydro-economic agricultural land use model was developed with endogenous and spatially explicit crop planting, nitrogen (N) fertilizer use and irrigation in the Mississippi River Basin (MRB). We used the model to quantify the effects of energy and N fertilizer prices on N runoff to the Gulf of Mexico. Results show a modest effect of energy costs and a more substantive impact of N fertilizer costs on N delivered to the Gulf of Mexico. A 30 % reduction (increase) in N fertilizer price leads to a 3.5 % and 1.5 % increase (2.9 % and 1.5 % decrease) in N use and runoff, respectively. The model was also used to estimate the opportunity cost of N runoff abatement. The opportunity cost of reducing N runoff from crop production to the Gulf by 45 % is estimated to be 29.3 per kg of N runoff reduction. The results show heterogeneities in the optimal N runoff reduction efforts across counties within the MRB, demonstrating the significance of a targeted abatement strategy.
... Coefficients α and β were estimated using the dual values of constraints (7) and following the approach of [42,43], where additional exogenous information about land rents was used for α and β estimation. The PMP approaches used in this work has been widely validated and approved for modelling and calibrations [44][45][46][47][48][49]. ...
Climate change is expected to have serious economic and social impacts on Tunisian rural farmers. The extent of these impacts will largely depend on the level of political and structural adaptations. This study aims to evaluate the effect of increasing water shortages on agricultural income and employment. It also analyzes structural adaptation strategies implemented by farmers in response to this challenge. We have therefore developed a regionally disaggregated supply model to simulate three types of scenarios concerning (i) decreasing quantities of irrigation water at the regional level; (ii) enhanced irrigation water use efficiency; and (iii) higher production prices. Observed crop production data for 21 crops and 24 districts of Tunisia have been used. Districts have been aggregated into five regions based on bioclimatic homogeneity. Results show that climate change will lead to the reduction of irrigated areas and an increased importance of rainfed agriculture. It will also have a negative impact on farm income and employment. This negative effect can be fully mitigated by improving water use efficiency, at farm and perimeter levels, and can be reversed by offering more attractive producer prices to farmers through enhanced value chain integration.
This paper reviews recent advances in the motivation, conceptualization, development, application, and assessment of hydroeconomic models (HEMs), for which these models are implemented by conducting a hydroeconomic analysis (HEA). It addresses various dimensions of HEA, including problems motivating the need for an HEM, roles of HEA, policy debates informed by HEMs, important uses of HEA, recent achievements in the scientific literature performed by use of HEMs, future improvements desired in HEA, as well as one simple prototype HEM. Supplementary material is included describing some contributions made to HEA, with special attention given to four individual contributors to water resource economics generally, criteria for credibility, and a description of some of the more popular mathematical programming packages used to build an HEM.
The gravity recovery and climate experiment (GRACE) satellite mission, which was active between March 2002 and June 2017 and its successor, the GRACE follow-on (GRACE-FO), which has been in operation since May 2018, marked the pioneering remote sensing missions to track changes in terrestrial water storage (TWS) across time. TWS encompasses the cumulative water masses found in the Earth’s soil column, including elements like surface water, soil moisture, snow water equivalent and groundwater (GW). Over the course of the last 20 years, there has been extensive research conducted on fluctuations in the mass of different Elements of the Earth's system, such as the hydrosphere, seas, cryosphere, and solid Earth, utilizing time-varying gravity measurements from the GRACE/GRACE-FO missions. This technology can be utilised to improve monitoring results of large-scale spatial and temporal variations in the water cycle patterns. A review of recent GRACE data used for monitoring terrestrial hydrology over India is provided in this work. The primary applications of GRACE data in the context of large-scale terrestrial hydrological monitoring, such as assessing alterations in terrestrial water storage, involve: retrieving the hydrological components of GW, analysing droughts, floods, land subsidence and determining how glaciers are responding to climate change, have recently been described. India has the tenth position globally in the utilization of GRACE data. Therefore, more investigation is required to completely understand the potential of GRACE data. It was found through a review of the literature that several hydrological models have not yet been thoroughly examined with GRACE data. Furthermore, small river basins can be analysed at a fine scale with downscale GRACE data using machine learning/artificial intelligence. In the Indian context, no research has been conducted to estimate river discharge by using GRACE data.
Water shortage and salinization are the main challenges confronted by irrigated agriculture in semiarid and arid regions. As one of the top-three largest irrigation districts in China, the Hetao Irrigation District faces pressing challenges to reduce irrigation water use and mitigate soil and groundwater salinization. Managing water and salinity requires understanding and analyzing not only the hydrologic and agronomic processes involved but the cropping and irrigation decision-making of farmers. With this aim, we build a hydroeconomic optimization model, which integrates the agrohydrological processes of water and salt balance in the crop root zone and underlying aquifer into economic optimization of water allocation and crop production. The positive mathematical programming method is used to calibrate the model such that it can replicate base-year observations. Model results highlight that a portfolio of interventions is necessary for alleviating soil and groundwater salinization and maintaining agricultural productivity and revenues; it is thus crucial to understand their long-term, cumulative effects for the sake of sustainable irrigated agricultural production. The model can assist decision-making for water and salinity management in the HID and offer useful insights for water and salinity management in irrigated agriculture of other arid regions in the world.
In this study, in order to save and improve agricultural water consumption in Neka county, the farmers' response to the policy of price change and the amount of available water in agriculture was studied. In this regard, the Positive Mathematical Programming (PMP) method was used to simulate the farmers' responses in Neka county. Data gathering was done by Simple random sampling method during the 2011-2012 crop year. The scenarios included increase in water prices per cubic meter of 4, 6 and 8 times, and 20, 30 and 50 percent reduction in the amount of available water and as a complementary policy, increase of 4, 6 and 8 times the price of water, with decrease of 50, 30, 20% of available water which was considered. The results showed that with the policy of raising the price of water up to 4 times and the policy of reducing the amount of water up to 20%, there is not Considerable change compared to the primary data. with regard to the policy of rising water prices, the shift in the pattern of cropping of irrigated products into rainfed products and the level of crops are allocated to products that require a lower water requirement and higher production value. In fact, this policy doesn’t reduce water consumption significantly. Also, in the policy of reducing the amount of available water, There have been no changes from cropping pattern of irrigated crops to rainfed crops, but Water consumption decrease significantly. In conclusion, water demand is elastic to its price.
Our country is among regions facing water scarcity as a large area of Iran is located in arid and semi-arid climates. So, comparing the annual average rainfall with annual mean annual precipitation on the planet, the rainfall in Iran is less than one-third of the the world, in addition, the amount of rainfall and the area in which the
agricultural main water user are located, does not match.The average annual rainfall in the world is about 850 mm and for Iran is about 250 mm, which is 40% less than the annual rainfall in Asia and approximately 33% less than the annual average of the world. The province of Hamedan has an area of 19493 square kilometers, located in the west of Iran between.
This plain, based on climatic divisions, is located in a cold semisolid climate and has a cool, mountainous climate. The ban on the development of exploitation of groundwater in the Hamedan-Bahar plain has been applied since the year 1992 due to the negative balance and the susceptibility of supplying drinking water in the
cities of Hamedan, Bahar, Laljin. Around, 330 of the 609 plains in the country have been declared forbidden due to excessive perceptions. Hamedan-Bahar plain has been faced with a serious problem of water shortages due to excessive withdrawal of groundwater and negative water balance and the expansion of the area under irrigated production, as the annual rate of groundwater loss in this plain is 1 meter.
The main objectives of this research are to estimate the economic value of groundwater in the agricultural sector of Hamedan-Bahar plain and to determine the optimal cropping pattern in the studied area using the GAMS programming model and mathematical programming.
In this study, a dynamic mathematical programming model was used to evaluate the economics of groundwater in the agricultural sector. Since the main objective of this study is to estimate the economic value of water in the region, the results
showed that the economic value per cubic meter of calculated water in the study area is higher than the current
price of water in the region. Therefore, any additional unit of water intake in the region can be as much as the calculated economic value of the water to increase the gross margin of farmers in the studied area.
Predicting the impacts of water management policies under uncertainty can support policy-makers in making sound decisions. Most previous methods for policy-impact simulation lacked a calibration process that would allow model results to match observed values, and did not address the inherent uncertainties. To fill this methodological knowledge gap, an interval credibility-constrained positive mathematical programming (ICPMP) approach was first developed in this study for simulating the impacts of water management policies. This method improved over traditional positive mathematical programming in terms of uncertainty treatment. It also improved upon inexact programming methods through activating a calibration process. ICPMP was then coupled with a multi-attribute decision-making approach, leading to a simulation-evaluation method that could support the analysis and screening of policy alternatives. This method has been applied to an agricultural water management problem in northwestern China. Various policy alternatives corresponding to different water prices and varied fuzzy credibility levels of water availability were investigated. The impacts of these alternatives over farmers’ income, irrigation water consumption, benefit per cubic meter of water, planting area, and fertilizer use were simulated through ICPMP. Forty policy alternatives with better indicator performances were selected to be comprehensively evaluated using the multi-attribute decision-making approach. The results indicated that when the decision-makers have a positive preference for water availability, the water price at the turning point of water use efficiency (i.e. benefit per cubic of water) was recommended. When decision-makers have conservative attitude towards water availability, it was recommended to keep the water price unchanged. Comparisons of ICPMP against traditional methods indicated that, ICPMP could generate more reliable results through incorporating uncertain information as inputs and reproducing actual situation. As well, solutions of ICPMP could provide in-depth analysis of the trade-offs between violation risk and system benefits. ICPMP and the associated simulation-evaluation method are also applicable to analyze other types of policies.
Pesticide use in peri-urban areas affects the urban environment and public health, and reducing the use may present food security issues for urban dwellers. In this study, we explore how a municipality-adopted goal of a 20% reduction in pesticide use could be achieved, along with local food security and environmental implications, for Shanghai located in the densely populated East China. A regional Shanghai Agricultural Sector Model incorporating district- and technology-varying crop budgets, was developed to simulate the effects of pesticide reduction policy. Here we find that achieving the reduction goal had the largest implications in districts with high pesticide use totals and intensities, potentially reducing pesticide non-point source pollution in the Yangtze River Estuary and Dianshan Lake; the production levels of rice and leafy vegetables would be most affected; and adopting machinery that allows more precise pesticide application modulates these results. Moreover, imposing the requirements at the district-level caused more severe local food security concerns, and less environmental benefits. Furthermore, a closed Shanghai's agricultural economy would substantially enlarge the regional heterogeneity in the above-mentioned outcomes. Exploring the effects of a quantity control policy on current-use pesticides at different aggregation levels has important implications for regulating the use of agrochemicals.
The Middle Eastern countries along with Iran possess an arid to semi-arid climates. For this reason, they encounter many problems in water supply and distribution within different sectors, especially agriculture. Hence, it is necessary to achieve some strategies for optimal, efficient and fair use of water supplies and irrigation grids to manage water allocation and distribution for irrigation in agricultural sector to reduce water wastes. To this end, the present study mainly aims to formulate a model for optimal water distribution for irrigation under uncertain conditions and the impact of water redistribution on the gross profit of farmers. In this study, positive mathematical programming was used and for applying uncertainty in water transfer model, robust optimization method was utilized. A combination of these two methods led to invention of a robust positive mathematical programming (RPMP) model. Tajan Irrigation and Drainage Network in northern Iran was selected as a case study to evaluate the ability of the proposed model. The results showed that with the increase in the probability of deviation (p) of the available water constraint, area under cultivation of all the selected crops decreases, and this can reduce production ultimately declining farmers' gross profits. Also, as the probability level (p) increases, amount of water transfer from upstream to downstream of irrigation and drainage network increases. Thus, cultivation structure should be mitigated for farming crops in order to prevent from reduced profit for farmers. The results of Monte Carlo Simulation indicated that using results of RPMP model were reliable and it might noticeably contribute to changing cultivation pattern.
Water market is one of the modern issues in demand management in face of water scarcity, which is increasingly used in different parts of the world as a tool for optimal allocation of water consumption and transfer of water to consumers with higher final efficiency. Despite the benefits of forming a water market, such markets are not yet developed in developing countries, such as Iran. Accordingly, this study examines the economic impact of water market design on farmers’ livelihood in Iran. The data of this study were collected using a multistage random sampling method from 100 users with water rights in the irrigation network of Ramjerd plain in Fars province. The data were analyzed using positive mathematical programming and scenario making. The results showed that with the formation of the water market, the gross margin of the total lands with irrigation network of Ramjerd plain increased from 2,013.080 billion Rials to 2,194.2200 billion Rials. As a result, the agricultural economic situation of the region experienced an increase of 9%. therefore an appropriate legal and regulatory structure is recommended to create a water market on the lands located within the irrigation networks. HIGHLIGHTS
Comprehensive assessment of the effects of water market design on farmers’ gross margin and crop pattern by region.;
Application of positive mathematical programming to simulate the effects of water market formation on economic situation of farmers.;
In terms of water transfer costs in order to make the effects of water market policy more realistic.;
This study aims to analyze the effects of local water market formation in a limited region of the Gavkhuni Basin, located in the center of Iran. An economic optimization mathematical model, called ‘inter-sectoral water exchanges programming’ (IWEP), is developed to address the study objectives. The proposed model seeks to maximize the net benefit of participating agents in the water market mechanism. This model can determine the scope of production activities and the monthly volume of water exchange through different technical methods of water transfer. Results demonstrate that the agriculture sector contributes to an increase in the productions of the agriculture industries and building industries through selling its surplus water. Although farm agents sell only 1% of their groundwater permits to industrial agents, the total net benefit of the agents is increased by more than 30%, compared to when the water market is not implemented. The shared aquifer method, based on common pool groundwater resources, is identified as a suitable technical method for water transfer in the groundwater markets. Finally, the socio-hydrological analysis of groundwater exchanges reveals that the inter-sectoral water market at the local scale can increase the region's employment rate by 45% and mitigate more pressure on the aquifer to meet water demands in the industry sector. These results clarify the efficient role of market-based groundwater allocation approach under water scarcity conditions.
The cotton as a strategic crop has the important role in creating job, foreign currency and increasing income in agricultural sector and related industries which has been considered by government. In the last couple of decades, the cotton cultivation area in Gorgan County which is one of the major cotton-producing regions has decreased considerably duo to high costs of production and continuation of import. Therefor the object of this study is mainly concentrate on assessing the influence of cultivation and profitability of cotton in Gorgan County influenced by government supportive policies using PMP. The data has been collected by filling out 295 questionnaires using the stratified random sampling method from farmers of Gorgan County in 2014-2015. Three cropping systems of cotton are considered in this study, including: mono-cropping, double cropping and intercropping systems and the governments supportive policies are measured in three parts such as cotton pricing policy, cotton production input subsidy policy and direct payment to cotton production policy. The result shows that the cotton production inputs subsidy has positive profitability among different government supportive policies, so that the most profitable one is related to the cotton mechanic harvesting policy with 1.78 percent of the change. According to results, it is recommended to increase cotton cultivation in Gorgan by applying production inputs subsidy.
Emerging evidence showing trends in climate change with a strong likelihood those changes will continue elevates the importance of finding affordable adaptations by irrigated agriculture. Successful climate adaptation measures are needed to affordably sustain irrigated agriculture in the face of elevated carbon emissions affecting the reliability of water supplies. Numerous potential adaptation options are available for adjusting irrigated agricultural systems to implement climate risk adaptation. This work focuses on addressing the gap in the literature defined by a scarcity of reviews on measures to elevate the capacity of irrigated agriculture to enhance its climate change resilience. Accordingly, the original contribution of this work is to review the literature describing measures for enhancing climate resilience by irrigated agriculture. In addition, it describes the role of economic analysis to discover affordable measures to enhance resilience by irrigated agriculture. It achieves those aims by posing the question “What principles, practices, and recent developments are available to guide discovery of measures to improve resilience by irrigated agriculture to adapt to ongoing evidence of climate change?” It addresses that question by reviewing several risk reduction measures to control the economic cost of losses to irrigators in the face of growing water supply unreliability. Following this review, a role for optimizing a portfolio of climate adaptation measures is described, followed by a discussion of potential contributions that can be made by the use of hydroeconomic analysis. Results provide a framework for economic analysis to discover economically attractive methods to elevate resilience of irrigated agriculture.
Measures implemented to restore ecosystem services are widely believed to conflict with food production in the world's irrigated regions because of their competition for scarce water. However, little integrated analysis has been conducted to test this hypothesis. This work tests that hypothesis by presenting results of a basin-scale hydroeconomic analysis linking biophysical, hydrologic, agronomic, ecological, economic, policy, and institutional dimensions of the partially-restored Mesopotamian Marshes of Western Asia. Results serve to partly reject the hypothesis: Here we find that an economically-optimized ecosystem restoration trajectory can be achieved with a minimal loss in food production or farm income where restored wetlands complement important dimensions of food production. Moreover, we find that where water shortage sharing rules can be made more flexible, ecosystem restoration more nearly complements improved food security. Our results point to previously unexplored synergies among food production, ecosystem restoration, and water laws in arid and semi-arid regions internationally.
Mathematical programming models have received renewed interest in the area of agricultural and agri- environmental policy analysis. Their ability to explicitly represent physical constraints makes them specifically suited for connecting economic and bio-physical aspects of agricultural systems. Furthermore, they allow for a direct representation of many current agricultural policy measures related to production activity levels. The introduction of Positive Mathematical Programming (PMP) addressed problems with plausibility of simulated behaviour and lack of empirical validation of these models. This paper reviews the development of PMP in its various forms and takes a look at approaches beyond PMP contributing to the quest for empirically specified programming models.
Farmers make joint water and land use decisions for economic purposes based in part on water availability and reliability. A two-stage economic production model is developed to examine the effects of hydrologic uncertainty and water prices on agricultural production, cropping patterns, and water and irrigation technology use. The model maximizes net expected farm profit from permanent and annual crop production with probabilistic water availability and a variety of irrigation technologies. Results demonstrate effects of water availability, price, and reliability on economic performance, annual and long-run cropping patterns, and irrigation technology decisions. Variations in water price and availability affect the desirability of different irrigation technologies. Increased water supply reliability can raise the probability of higher economic returns and promote more effective use of water for permanent crops. Such economic benefits can be compared to costs of operational changes and programs to increase water supply reliability for agricultural areas.
The primary purpose of this paper is to provide updated estimates of domestic own-price, cross-price and income elasticities of demand and estimated price elasticities of supply for various California commodities. Flexible functional forms including the Box-Cox specification and the nonlinear almost ideal demand system are estimated and bootstrap standard errors obtained. Partial adjustment models are used to model the supply side. These models provide good approximations in which to obtain elasticity estimates. The six commodities selected represent some of the highest valued crops in California. The commodities are: almonds, walnuts, alfalfa, cotton, rice, and tomatoes (fresh and processed). All of the estimated own-price demand elasticities are inelastic and, in general, the income elasticities are all less than one. On the supply side, all the short-run price elasticities are inelastic. The long-run price elasticities are all greater than their short-run counterparts. The long-run price supply elasticities for cotton, almonds, and alfalfa are elastic, i.e., greater than one. Policy makers can use these estimates to measure the changes in welfare of consumers and producers with respect to changes in policies and economic variables.
Meta-regression models are estimated to investigate sources of variation in empirical estimates of the price elasticity of irrigation water demand. Elasticity estimates are drawn from mathematical programming, econometric and field experiment studies reported in the United States since 1963. Explanatory variables include method of analysis, water price, time-frame of analysis, farmers'’ adjustment options, type of data, and climate. Results indicate that the magnitudes of elasticity estimates are affected by the method of analysis. When separate regressions are performed for the estimates from each method, the price of water at which an elasticity is estimated as well as the time-frame of analysis are found to influence price elasticities.
The paper introduces a general methodological approach for the estimation of constrained optimisation models in agricultural supply analysis. It is based on optimality conditions of the desired programming model and shows a conceptual advantage compared with Positive Mathematical Programming in the context of well-posed estimation problems. Moreover, it closes the empirical and methodological gap between programming models and duality-based models with explicit allocation of fixed factors. Monte Carlo simulations are performed with a maximum entropy estimator to evaluate the functionality of the approach as well as the impact of empirically relevant prior information with small samples. Copyright 2003, Oxford University Press.
An economic-engineering optimization model of California's major water supply system is presented. The model's development, calibration, limitations, and results are reviewed. The major methodological conclusions are that large-scale water resources optimization models driven by economic objective functions are both possible and practical; deterministic models are useful despite their limitations; and data management, reconciliation, and documentation are important benefits of large-scale system modeling. Specific results for California indicate a great potential for water markets and conjunctive use to improve economic performance and significant economic value for expanding some conveyance facilities. Overall, economic-engineering optimization #even if deterministic# can suggest a variety of promising approaches for managing large systems. These approaches can then be refined and tested using more detailed simulation models. The process of developing large-scale models also motivates the systematic and integrated treatment of surface water, groundwater, facility, and water demand data, and identification of particularly important data problems, something of long-term value for all types of water resources analysis.
Учебник рассматривает микроэкономические аспекты работы фирмы. Является базовым для чтения курса «Экономика производства» для магистров и докторантов первого года обучения. Основные рассматриваемые темы – технические аспекты производственного процесса, производство с одним переменным фактором, производство с двумя переменными факторами, эластичность производства, один продукт-n-переменных факторов, экономические аспекты производства – анализ со стороны ресурсов, случай при спросе на один ресурс и на несколько ресурсов одновременно, выпуск продукции, функции дохода и издержек, производство при различном ассортименте выпуска.
Abstract Over the last 25 years, economic water policy models have evolved in concept, theoretical and technical methods, scope and application to address a host of water demand, supply, and management policy questions. There have been a number of theoretical and empirical advances over this period, particularly related to estimation of nonmarket, public good water‐related values involving different methods of valuation. We discuss modeling advances including modeling multiple, competing demands, types of incentives and technologies and behavioral responses, incorporation of groundwater and other supply alternatives, integration of institutional factors, and increasing attention to system‐wide impacts. The largest changes in hydroeconomic policy models have been the integration of the individual demand and supply components, inclusion of environmental values, incorporation of governance and institutional conditions (laws, regulations and policies), and expansion to river basin and even interposing scales of analysis. Important areas of future hydroeconomic model advances will be the use of genetic and neurological based algorithms for solving dynamic, stochastic problems, reconstruction of hydrological and economic relationships for remotely sensed data, and the expansion of models to understand and address transboundary water resource economic, hydrologic, environmental and institutional policy, and interdependencies.
Irrigated agriculture is the largest water user in many regions, and agricultural water use efficiency and consumption has been studied by several authors. This paper provides a framework and application of economic valuation of water for agriculture in three regions in northern Baja California, Mexico, namely Guadalupe, Maneadero and Mexicali Valleys. Positive mathematical programming (PMP), a deductive valuation technique, was the framework used for this estimation using water delivery data reported by the National Water Commission in Mexicali, production costs and cultivated area, production factors use from the Agriculture Ministry (SAGARPA); and other data from previous studies. Analysis of the results shows that marginal economic water value in Mexicali is at least 2.6 times the water price paid by farmers. Guadalupe and Maneadero with higher value agriculture, have higher marginal economic values of water than Mexicali, albeit closer to their water costs. Small shortages increase this economic value for farmers. Estimated price elasticities of irrigation water for each turn-out are inelastic for all regions and within the range of most previous studies. Policies aimed to reduce water consumption by decreasing current pumping subsidies are encouraged.
Models are increasingly being relied upon to inform and support natural resource management. They are incorporating an ever broader range of disciplines and now often confront people without strong quantitative or model-building backgrounds. These trends imply a need for wider awareness of what constitutes good model-development practice, including reporting of models to users and sceptical review of models by users. To this end the paper outlines ten basic steps of good, disciplined model practice. The aim is to develop purposeful, credible models from data and prior knowledge, in consort with end-users, with every stage open to critical review and revision. Best practice entails identifying clearly the clients and objectives of the modelling exercise; documenting the nature (quantity, quality, limitations) of the data used to construct and test the model; providing a strong rationale for the choice of model family and features (encompassing review of alternative approaches); justifying the techniques used to calibrate the model; serious analysis, testing and discussion of model performance; and making a resultant statement of model assumptions, utility, accuracy, limitations, and scope for improvement. In natural resource management applications, these steps will be a learning process, even a partnership, between model developers, clients and other interested parties.
Models are increasingly being relied upon to inform and support natural resource management. They are incorporating an ever broader range of disciplines and now often confront people without strong quantitative or model-building backgrounds. These trends imply a need for wider awareness of what constitutes good model-development practice, including reporting of models to users and sceptical review of models by users. To this end the paper outlines ten basic steps of good, disciplined model practice. The aim is to develop purposeful, credible models from data and prior knowledge, in consort with end-users, with every stage open to critical review and revision. Best practice entails identifying clearly the clients and objectives of the modelling exercise; documenting the nature (quantity, quality, limitations) of the data used to construct and test the model; providing a strong rationale for the choice of model family and features (encompassing review of alternative approaches); justifying the techniques used to calibrate the model; serious analysis, testing and discussion of model performance; and making a resultant statement of model assumptions, utility, accuracy, limitations, and scope for improvement. In natural resource management applications, these steps will be a learning process, even a partnership, between model developers, clients and other interested parties.
A method for calibrating models of agricultural production and resource use using nonlinear yield or cost functions is developed.
The nonlinear parameters are shown to be implicit in the observed land allocation decisions at a regional or farm level. The
method is implemented in three stages and initiated by a constrained linear program. The procedure automatically calibrates
the model in terms of output, input use, objective function values and dual values on model constraints. The resulting nonlinear
models show smooth responses to parameterization and satisfy the Hicksian conditions for competitive firms.
The US National Assessment of the Potential Consequences of Climate Variability and Change provides compelling arguments for action and adaptive measures to help mitigate water resource, agricultural production and environmental quality impacts of future climate change. National resource planning at this scale can benefit by the development of integrated impact analysis toolboxes that allow linkage and integration of hydroclimate models, surface and groundwater hydrologic models, economic and environmental impact models and techniques for social impact assessment. Simulation models used in an assessment of climate change impacts on water resources, agriculture and environmental quality in the San Joaquin Basin of California are described in this paper as well as the challenges faced in linking the component models within an impacts assessment toolbox. Results from simulations performed with several of the tools in the impacts assessment toolbox are presented and discussed. After initially attempting model integration with the public domain, GIS-based modeling framework Modular Modeling System/Object User Interface (MMS/OUI), frustration with the framework's lack of flexibility to handle monthly timestep models prompted development of a common geodatabase to allow linkage of model input and output for the linked simulation models. A GIS-based data browser was also developed that works with both network flow models and makes calls to a model post-processor that shows model output for each selected node in each model network. This data and output browser system is flexible and can readily accommodate future changes in the model network configuration and in the model database.
California agriculture is driven by the interactions between technology, resources, and market demands. Future production is a balance between the rates of change in these variables and environmental factors including climate change. With tight statewide water supplies and agriculture being an important part of the California economy, quantifying the economic consequences of changes in these variables is important for addressing related policy questions. We estimate the economic effects of climate change on California crop farming by year 2050 using the Statewide Agricultural Production Model (SWAP). With climate warming, crop yields are expected to decline, production costs to increase, and water supplies to fall. These negative effects may be partially offset by higher crop prices and technological improvements. Results indicate that gross agricultural revenues across all regions are reduced under climate change, as is water usage. However, given the climate-induced reductions in water supply and crop yields, reductions in revenue are proportionally less due to shifting crop demands, technological change, and a shift to higher value less water intensive crops. Given the long time horizon required in this study, the results should not be considered a projection or forecast, but as a probable outcome of the interaction of several uncertain driving forces.
We develop a methodology to exactly calibrate quadratic programming models of agricultural supply against exogenous own-price supply elasticities. We show that calibration is only possible against certain sets of supply elasticities. For the case where one constraint is binding and the matrix of quadratic coefficients is diagonal, we derive the necessary and sufficient condition under which the calibration problem has a solution, and prove that it is then unique. We propose a general procedure to obtain implied elasticity equations in models of input allocation, and apply it to the constant-elasticity-of-substitution model with land constraint. Oxford University Press and Foundation for the European Review of Agricultural Economics 2010; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.
This article provides a methodology to exactly calibrate land-constrained programming models of agricultural supply against supply elasticities using generalized constant-elasticity-of-substitution, crop-specific production functions. We formally derive the necessary and sufficient conditions under which the model can replicate a reference allocation while displaying crop supply responses consistent with exogenous information on supply elasticities. When it exists, the solution to the exact calibration problem is unique. Subject to a caveat, the proposed specification is shown to be more flexible with respect to calibration than the quadratic specification that has been used extensively in policy models based on positive mathematical programming. Copyright 2011, Oxford University Press.
Production economics problems are often ill-posed. This means that the number of parameters to be estimated is greater than
the number of observations. In this article we show how to recover flexible cost functions from very limited data sets using
a maximum entropy approach. We also argue that there exists a continuum of analysis between mathematical programming and traditional
econometric techniques which is based solely upon the available information. The limiting case of a multi-output cost function
recovered using only a single observation of a farmer's allocation decisions can be easily extended to handle more than one
observation.
Economics brings powerful insights to water management, but most water professionals receive limited training in it. This text offers a comprehensive development of water resource economics that is accessible to engineers and natural scientists as well as economists. The goal is to build a practical platform for understanding and performing economic analysis using both theoretical and empirical tools. The mathematics needed to understand the subjects covered in this text include basic optimization methods and integral calculus. Familiarity with microeconomics or natural resource economics is helpful, but all the economics needed is presented and developed progressively in the text. Many water-based example calculations are included. Thus the book can be used for independent study as well as course work. The book focuses on the scarcity of water quantity (rather than water quality). The author presents the economic theory of resource allocation, recognizing the peculiarities imposed by water, and expands the theory to encompass time-defined matters such as ground water depletion. He then discusses such subjects as institutional economics, water law, how economics is used in policy and cost-benefit analysis, the roles of water marketing and water pricing, demand and supply estimation, privatization, and modeling with demand and supply functions. As an aid to readers with specific interests, references to recent literature are given for all of these topics. Each chapter ends with a summary and exercises. All graphic portrayals of economic theory and most calculations are performed using Mathematica software. These programs are downloadable, but their use is entirely optional.
In this paper an integration of the agricultural economic model RAUMIS with the hydrological models GROWA98 and WEKU is presented. The focus lies on an area wide, regionally differentiated, consistent link-up between the indicator “nitrogen balance surplus” and nitrogen charges into surface waters. The model network is used to analyze the status quo situation in the year 1999 for two river catchments in Germany that feature very distinct natural and socio-economic conditions. Regarding agriculture, the study areas include regions with specializations in cash crops, in intensive livestock featuring high nitrogen surplus, and extensive livestock production on permanent grassland. Due to regionally varying hydrological conditions quite different shares of agricultural nitrogen surpluses ranging from 25 to 92% enter surface waters. Furthermore, impacts of alternative nitrogen reduction measures namely a limitation of livestock density and a tax on mineral nitrogen are quantified. Measures of the nitrogen reduction potential and costs in terms of agricultural income forgone are taken into account in the assessment. Results regarding the effects of restricting the livestock density or tax mineral nitrogen highlight that the mitigation of diffuse water pollution problems requires regionally tailored measures.
A holistic model embeds water resources and economic components into a consistent mathematical programming model, with the objective of maximizing economic profits from water uses in various sectors. Such a model can be used to address combined environmental-economic issues. Although holistic modeling represents a simple approach for building truly integrated water resources and economic models, it faces many difficulties in terms of temporal and spatial scale issues and model formulation, calibration, solution and result interpretation, as well as extensive data requirement. This paper addresses the difficulties involved in large-scale holistic modeling for integrated river basin management, and provides solution methods taking a self-reflective stance through a prototype model. This paper is a methodological paper for practitioners who are interested in integrated water resources-economic modeling.
Future water management will shift from building new water supply systems to better operating existing ones. The variation of water values in time and space will increasingly motivate efforts to address water scarcity and reduce water conflicts. Hydro-economic models represent spatially distributed water resource systems, infrastructure, management options and economic values in an integrated manner. In these tools water allocations and management are either driven by the economic value of water or economically evaluated to provide policy insights and reveal opportunities for better management. A central concept is that water demands are not fixed requirements but rather functions where quantities of water use at different times have varying total and marginal economic values. This paper reviews techniques to characterize the economic value of water use and include such values in mathematical models. We identify the key steps in model design and diverse problems, formulations, levels of integration, spatial and temporal scales, and solution techniques addressed and used by over 80 hydro-economic modeling efforts dating back 45-years from 23 countries. We list current limitations of the approach, suggest directions for future work, and recommend ways to improve policy relevance.
Most lowland stream drainage-basins have a high population density and the land use is very intensive. The permeable subsoil acts as an integrating medium, thus providing a widespread dispersal of leached nutrients and transmission of water-table lowering. This leads to eutrophication and desiccation of stream ecosystems. For providing suggestions with respect to cost-effective and sustainable spatial planning solutions, the ‘Waterwise’ bioeconomic model has been developed. It combines the accuracy of simulation models with the versatility of optimization techniques to generate land-use patterns along with the appropriate water management, taking into account the preferences of stakeholders with respect to peak discharges, nutrient loading on groundwater and surface water, the biological value of nature areas, and the revenue from agriculture. Computational experiments with the model show, for instance, that a certain goal for the nitrogen load on surface water can be reached at a 40% lower cost if the measures are ‘tailored’ to the region instead of using generic-style measures towards the same end.
Enlarging the scope of agricultural policy analysis, with contemporary issues such as multifunctional farming, means that conventional models should be adjusted. Starting from the intrinsic nature of multifunctionality, we show that the link between farm and policies is becoming increasingly important in the general framework of model-based policy impact analysis. This argues for the use of farm-level programming models. The paper presents three mathematical programming approaches, of which the choice depends on the type of problem and the availability of historical data. First is shown how normative mathematical programming (NMP) can help to simulate the impact of new activities when historical data are scarce. The second approach is positive mathematical programming (PMP), which allows taking both historically observed behaviour and new normative information into account. The similarities and differences between both approaches are illustrated with a simplified dairy farm model that simulates the uptake of meadow bird management. Finally, a more advanced programming technique, econometric mathematical programming (EMP), is introduced combining the advantages of econometrics and programming techniques. Advantages and disadvantages as well as the integration with other quantitative methods are discussed for relevance and applicability in multifunctionality research.
This paper presents a disaggregated rural economywide modeling (DREM) approach to explore how agricultural and trade policy reforms play out within rural economies of less developed countries (LDCs). DREMS combine the strengths of aggregate, computable-general equilibrium (CGE), and microagricultural household models. We calibrate our model with new microsurvey data from Central Mexico, and we use the model to explore the impacts of policy changes on individual rural household groups as well as on the rural economy as a whole. Simulations highlight how rural market constraints and heterogeneous household responses shape the outcomes of policy reforms.
Neural networks have been developed to model the electrolysis of wastes polluted with phenolic compounds, including phenol, 4-chlorophenol, 2,4-dichlorophenol, 2,4,6-trichlorophenol, 4-nitrophenol and 2,4-dinitrophenol. They enable the prediction the Chemical Oxygen Demand of a treated waste as a function of the initial characteristics (pollutant concentration, pH), operation conditions (temperature, current density) and current charge passed. A consistent set of experimental data was obtained by electrochemical oxidation with conductive diamond electrodes, used to treat synthetic aqueous wastes.Several modeling strategies based on simple and stacked neural networks, with different transfer functions into the hidden and output layers, have been considered to obtain a good accuracy of the model. Global errors during the training stage were under 3% and those of the validation stage were under 4%, demonstrating that the neural network based technique is appropriate for modeling the system.The generalization capability of the neural networks was also tested in realistic conditions where Chemical Oxygen Demand was predicted with errors around 5%. Therefore, the developed neural models can be used in industry to determine the required treatment period, to obtain the discharge limits in batch electrolysis processes, and it is a first step in the development of process control strategies.The ten step methodology was applied to the neural network based process modeling.
"Using linear programming in bio-economic farm modelling often results in overspecialised model solutions. The positive mathematical programming (PMP) approach guarantees exact calibration to base year data but the forecasting capacity of the model is affected by necessary but arbitrary assumptions imposed during calibration. In this article, a new PMP variant is presented which is based on less arbitrary assumptions that, from a theoretical point of view, are closer to the actual decision making of the farmer. The PMP variant is evaluated according to the predictions of the bio-economic farm model, developed within the framework for integrated assessment of agricultural systems in Europe (SEAMLESS). The forecasting capacity of the model calibrated with the standard PMP approach and the alternative PMP variant, respectively, is tested in ex-post experiments for the arable farm types of Flevoland (the Netherlands) and Midi-Pyrenees (France). The results of the ex-post experiments, in which we try to simulate farm responses in 2003 using a model calibrated to 1999 data, show that the alternative PMP variant improves the forecasting capacity of the model in all tested cases." Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The Agricultural Economics Society.
Given the high proportion of water used for agriculture in certain regions, the economic value of agricultural water can be an important tool for water management and policy development. This value is quantified using economic demand curves for irrigation water. Such demand functions show the incremental contribution of water to agricultural production. Water demand curves are estimated using econometric or optimisation techniques. Calibrated agricultural optimisation models allow the derivation of demand curves using smaller datasets than econometric models. This paper introduces these subject areas then explores the effect of spatial aggregation (upscaling) on the valuation of water for irrigated agriculture. A case study from the Rio Grande-Rio Bravo Basin in North Mexico investigates differences in valuation at farm and regional aggregated levels under four scenarios: technological change, warm-dry climate change, changes in agricultural commodity prices, and water costs for agriculture. The scenarios consider changes due to external shocks or new policies. Positive mathematical programming (PMP), a calibrated optimisation method, is the deductive valuation method used. An exponential cost function is compared to the quadratic cost functions typically used in PMP. Results indicate that the economic value of water at the farm level and the regionally aggregated level are similar, but that the variability and distributional effects of each scenario are affected by aggregation. Moderately aggregated agricultural production models are effective at capturing average-farm adaptation to policy changes and external shocks. Farm-level models best reveal the distribution of scenario impacts.
Although significant water trading has occurred in California since the drought of the early 1990s, many localities have restricted water transfers because of the perceived harm to other users and the local economy. In Who Should Be Allowed to Sell Water in California? Third-Party Issues and the Water Market, Ellen Hanak examines water transfers in California, local resistance to them, and various approaches to resolving water disputes. Drawing on a new database of water transfers as well as interviews with state, county, and water district officials, the report calls for water management at the local level that balances the interests of other residents and the potential gains from transfers.
An ecosystem in freefall, a shrinking water supply for cities and agriculture, an antiquated network of failure-prone levees-this is the Sacramento-San Joaquin Delta, the major hub of California's water system. Written by a team of independent water experts, this analysis of the latest data evaluates proposed solutions to the Delta's myriad problems. Through in-depth economic and ecological analysis, the authors find that the current policy of channeling water exports through the Delta is not sustainable for any interest. Employing a peripheral canal-conveying water around the Delta instead of through it-as part of a larger habitat and water management plan appears to be the best strategy to maintain both a high-quality water supply and at the same time improve conditions for native fish and wildlife. This important assessment includes integrated analysis of long term ecosystem and water management options and demonstrates how issues such as climate change and sustainability will shape the future. Published in cooperation with the Public Policy Institute of California.
A method for calibrating agricultural production models is presented. The data requirements are those for a linear programming model with the addition of elasticities of substitution. Using these data, production models with a CES production function can be simply and automatically calibrated using small computers. The resulting models are shown to satisfy the standard microeconomic conditions. When used for analysis of policy changes, the CES models are able to respond smoothly to changes in prices or constraints. Prior estimates of elasticities of substitution, supply or demand can be incorporated in the models.
No abstract available.
Models Based on Positive Mathematical Programming: State of the Art and Further Extensions Estimation of constrained optimisation models for agricultural supply analysis based on generalised maximum entropy
- T Heckelei
- W Britz
Heckelei, T., Britz, W., 2005. Models Based on Positive Mathematical Programming: State of the Art and Further Extensions. EAAE Seminar Paper, February 2005, Parma. Heckelei, T., Wolff, H., 2003. Estimation of constrained optimisation models for agricultural supply analysis based on generalised maximum entropy. European Review of Agricultural Economics 30, 27e50.
Un modelo regional agrícola de equilibrio parcial: el caso de la Cuenca del Río Bravo
- R E Howitt
- J Medellín-Azuara
Howitt, R.E., Medellín-Azuara, J., 2008. Un modelo regional agrícola de equilibrio parcial: el caso de la Cuenca del Río Bravo. In: Guerrero-GarcíaRojas, H.G., Yúnez Naude, A., Medellín-Azuara, J. (Eds.), El agua en México: Implicaciones de las políticas de intervención en el sector. El Fondo de Cultura Económica, México, D.F.
Water Resource Economics: the Analysis of Scarcity, Policies, and Projects Who Should be Allowed to Sell Water in California? Third-party Issues and the Water Market
- R C Griffin
- London
- England
- E Hanak
Griffin, R.C., 2006. Water Resource Economics: the Analysis of Scarcity, Policies, and Projects. MIT Press, Cambridge, Mass.; London, England. Hanak, E., 2003. Who Should be Allowed to Sell Water in California? Third-party Issues and the Water Market. Public Policy Institute of California.
Comparing Futures for the Sacramento-San Joaquin Delta Public Policy Institute of California A calibrated agricultural water demand model for three regions in northern Baja California Estimating economic value of agricultural water under changing conditions and the effects of spatial aggre-gation
- In
- J R Lund
- E Hanak
- W Fleenor
- W Bennett
- R E Howitt
- J Mount
- P Moyle
- J Medellin-Azuara
- R E Howitt
- C Waller-Barrera
- L G Mendoza-Espinosa
- J R Lund
- J E Taylor
In: Lund, J.R., Hanak, E., Fleenor, W., Bennett, W., Howitt, R.E., Mount, J., Moyle, P. (Eds.), Comparing Futures for the Sacramento-San Joaquin Delta. Public Policy Institute of California, San Francisco, California. Medellin-Azuara, J., Howitt, R.E., Waller-Barrera, C., Mendoza-Espinosa, L.G., Lund, J.R., Taylor, J.E., 2009. A calibrated agricultural water demand model for three regions in northern Baja California. Agrociencia 43, 83e96. Medellín-Azuara, J., Harou, J.J., Howitt, R.E., 2010. Estimating economic value of agricultural water under changing conditions and the effects of spatial aggre-gation. Science of the Total Environment 408, 5639e5648. Medellin-Azuara, J., Howitt, R.E., MacEwan, D., Lund, J.R., 2012. Estimating impacts of climate related changes to California agriculture. Climatic Change 109 (S1), S387eS405.
Envisioning Futures for the Sacramento-San Joaquin Delta. Public Policy Institute of Cal-ifornia
- J Lund
- E Hanak
- W Fleenor
- R E Howitt
- J Mount
- R Moyle
Lund, J., Hanak, E., Fleenor, W., Howitt, R.E., Mount, J., Moyle, R., 2007. Envisioning Futures for the Sacramento-San Joaquin Delta. Public Policy Institute of Cal-ifornia. Available at: http://www.ppic.org (Last accessed June 2011).
A fully calibrated generalized constant-elasticity-of-substitution programming model of agricultural supply A method for estimating the demand for irrigation water An analysis of ill-posed production problems using maximum entropy Ten steps modeling of electrolysis processes by using neural networks
- P Merel
- L K Simon
- F Yi
- Q Paris
- R E Howitt
Merel, P., Simon, L.K., Yi, F., 2011. A fully calibrated generalized constant-elasticity-of-substitution programming model of agricultural supply. American Journal of Agricultural Economics 93 (4), 936e984. Moore, C.V., Hedges, T.R., 1963. A method for estimating the demand for irrigation water. Agricultural Economics Research 15, 131e135. Paris, Q., Howitt, R.E., 1998. An analysis of ill-posed production problems using maximum entropy. American Journal of Agricultural Economics 80, 124e138. Piuleac, C.G., Rodrigo, M.A., Cañizares, P., Curteanu, S., Sáez, C., 2010. Ten steps modeling of electrolysis processes by using neural networks. Environmental Modelling and Software 25 (1), 74e81.
Integrated economic-ecological modeling
- Vanlierop Braat
Economics and the modeling of water resources and policies
- Booker
Drought, jobs, and controversy: revisiting 2009. University of California Giannini Foundation of Agricultural Economics ARE Update
- Howitt Etal
Un modelo regional agrí***cola de equilibrio parcial: el caso de la Cuenca del Rí***o Bravo
- Medellín-Azuara Howitt
Economic effects on agriculture of water export salinity south of the Sacramento-San Joaquin Delta
- J R Medellin-Azuara Etal Lund
- E Hanak
- W Fleenor
- W Bennett
- R E Howitt
- J Mount
- P Moyle
United States Department of Agriculture Available at: http://www.usda.gov (Last accessed
- Usda Usda