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Coupling the Tradeoff Analysis Model with a market equilibrium model to analyze economic and environmental outcomes of agricultural production systems

Valdivia, Roberto O., Antle, John M., Stoorvogel, Jetse J.
Agricultural systems 2012 v.110 pp. 17-29
case studies, economic analysis, farms, issues and policy, markets, models, poverty, prices, production technology, Kenya
Analysis of the economic and environmental outcomes of agricultural systems requires a bottom-up linkage from the farm to market, as well as a top-down linkage from market to farm. This study develops this two-way linkage between the Tradeoff Analysis Model of agricultural systems and a partial equilibrium market model. The resulting model can determine the effects of technology and policy interventions on the spatial distribution of environmental and economic outcomes at market equilibrium quantities and prices. The approach is demonstrated with a case study of tradeoffs between poverty and nutrient depletion in a semi-subsistence agricultural system (Machakos, Kenya). The results suggest that the linkage of market equilibrium analysis to farm level Integrated Assessment Models can be important in the analysis of agriculture–environment interactions.