Production and Markets in Agriculture

Production and Markets in Agriculture (PMA)

Group leaders: Elodie Letort et Carole Ropars-Collet

Secretary: Françoise Auffray

The work in this research axis follows a double ambition:  (1) analyzing the choices made by farmers and actors on markets related to the agricultural production sector, and (2) assessing the effects of public policies (including the EU CAP) impacting this sector.  A particular attention is given to the evolution of the structure, incomes, and economic and environmental performance of farms, to the effects of agricultural, agri-environmental, and trade policies on this performance and the equilibria on the markets for agricultural goods and land, and to price volatility of agricultural products.  The main tools of analysis are economic modeling and statistical analysis. The applications contribute to the economics of agricultural production and environmental economics.  An exception is the research analyzing environmental law and its application to the agricultural sector from a legal point of view.

The research is structured in three areas:

Microeconomic and microeconometric modeling of agricultural producers’ choices

The work in this area contributes to the economics of agricultural production (microeconometric models or mathematical programming).  Based on multidisciplinary collaborations, one of our objectives is to formalize the notion of technical itineraries, the effects of crop rotation, cropping systems, or the linkages between breeding activities and vegetable production, using usual microeconomic models.  This work allows us to better analyze the effects of policy instruments, which are increasingly tailored toward agricultural practices and their specific characteristics. We consider both the short- and long-term effects of agricultural policies.  We seek to use microeconometric modeling as far as possible, so as to infer the parameters of agricultural producers’ choices statistically.  Some research studies farmers’ attitudes toward production and price risks and their effect on farmer choices (crop rotation, crop protection, investment, saving, insurance, pesticide use, change of production techniques).

Land and agricultural commodity markets

The land market is crucial role for the agricultural sector.  We investigate several aspects: (i) the capitalization of agricultural subsidies in the price of land, (ii) the role of land market regulation and environmental regulation for land exchanges, (iii) the demographic evolution of farms accounting for entries and exits, and (iv) the measuring and evolution of agricultural income.  We approach these phenomena using econometric analysis, partial equilibrium models, and, more originally, multi-agent modeling.  Studies on agricultural commodity markets complement this research.  They aim to explain the volatility of agricultural prices and to study the efficiency of private and public instruments which may influence it (storage, financial markets). Part of this research uses macroeconomic data and dynamic and stochastic econometric market equilibrium models. Other work builds on simulation exercises using general or partial market equilibrium models.

Agricultural policy, modeling, and global aspects

This area seek to better understand global challenges to the agricultural sector, such as food security and climate change.  We approach this topic in two ways: (i) econometric analysis of specific markets and countries, and (ii) calibration and simulation exercises using general or partial equilibrium models to study the redistribution effects of policies.  In particular, we develop at our institute agricultural market models (for human and animal nutrition and energy production) at the level of large world regions.  This research specially accounts for the important roles of land use and international trade.  We use those models to analyze agricultural and energy policy effects (especially for the US and the EU) and the macroeconomic effects of changes of agricultural practices.