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Challenged of resource allocation
Problems of resources allocation
Challenged of resource allocation
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5.5.1 Baseline scenario The baseline scenario (BSL) is the simulation run that represents the current situation and, in which all parameter values are taken as they are. Each model was calibrated in such way that the baseline scenario reflects the observed conditions from the survey data. This is followed by an analysis of the allocation possibilities of the available resources to production activities, which are related to the availability of the relevant inputs and expected prices and yields. Crop yields are then simulated from production decisions (crop choice, variable input levels) and resources condition, which is also affected by investment decisions. Finally, based on the simulated crop yields, the model calculates the village revenues. …show more content…
The effect of the price change is then analyzed by comparing the baseline scenario (without the price change) with the alternative scenario that includes the price change while keeping all other parameters constant (ceteris paribus). For Piura, price changes in cowpea, maize, sheep and goat meat were considered. In Campo Verde, the analysis focused on production of cassava, rice, maize, plantain, palm oil, cacao and cattle meat. These scenarios were employed in order to see what happens if the price increased or decreased. For the analysis, five levels of the factor (price change) were considered 0.5, 0.7, 1, 1.3 and 1.5. 5.5.3 Sensitivity to Wages and Yields Household´s decision could be influence by wages for hired labor, wages for off-farm work, declines in crop yields (e.g. due to short rainy season or plant diseases) or yield increases (e.g. due to water availability, improve planting material). Therefore a sensitivity analysis is performed in order to see the household responses. For the sensitivity analysis to wages and yields, five levels of the factor were considered 0.5, 0.7, 1, 1.3 and 1.5. During the simulation run tested factor is kept constant at the initially chosen …show more content…
Usually, social discount rates are lower than private discount rates because social preferences place greater value on the future generations in contrast with private preferences (Irawan, Tacconi, and Ring 2013). In the Stern Review and the Garnaut Review, the social discount rates were 1 to 2 percent. However, in some REDD+ studies, 10 percent of private discount rate is used (Ebeling and Olander 2011). Therefore, for this study a social discount rate of 3 percent was employed, which is higher than the discount rate used in the Stern and Garnaut Reviews. A positive rate could also be considered to approximate social preferences; one of the most appropriate is the yield of long-term government bonds, which is about 5 percent in case of Peru. In the case of assessment of the value of public investment, discount rates of 9 percent are used, whereas for mitigation projects 3 percent is used and 10 percent for private projects (GIZ 2013). To account for the difference between discount rates in social and business contexts in evaluating land use options, discount rates of 3, 5 and 10 percent were employed. The time considered was 40 years for the forest project in Piura and 30 years for the forest project in the Amazon
AICPA Audit Procedures for Agricultural Producers Pt.1 Ch5.02 ?Growing crops and developing animals to be held for sale should be valued at the lower of cost or market.?
The article “Big Crop Won’t Reduce Pecan Prices” is about how the market for pecans affects the both the wholesale market and the retail market. The article describes how pecans are relatively inelastic around major holidays, such as Thanksgiving and Christmas. It is stated that there was a 150 million pound increase in pecans from the previous year. Since there was such a great increase in quantity supplied, the price decreased. Since the demand for pecans is relatively inelastic, consumers are not affected by a change in price. This article also describes the difference between the wholesale market and the retail market for pecans. Wholesale markets produce the pecans, and sell them to retailers for a low price; between seventy-five to eighty-five cents per pound. While the retailers purchase the pecans for a low price, they turn around and sell them to consumers for about five times the price they paid for them. The pecan producers have no control over the prices that they sell the pecans at, and they have no control over the price that the retailers sell the pecans at.
this notion of stable supply and demand affected prices of farm commodities. “Low prices on
D. Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 cents. Outline the significant factors that could cause changes in supply and demand for the low-calorie, frozen microwavable food. Determine the primary manner in which both the short-term and the long-term changes in market conditions could impact the demand for, and the supply, of the product.
By exploring the past and its threats to human populations, the global modern mythology of sustainable agriculture can begin to be narrowed down as to the how and why rural communities may or may not have benefited from agricultural sustainability. By describing the dynamic analysis in the livelihoods of developing countries, the historical changes that had occurred in rural communities, can be understood. Halberg and Müller stated that globally “The world’s population was about 7 billion in 2010 and is expected to grow much more. The expected growth is highest in parts of the world that are vulnerable to hunger and adverse climate condit...
below, if firm X decides to lower its price from B to D, sales should
When demand is elastic as with Coca Cola products price changes affect total revenue. When the price increases revenue decreases and when the price decreases revenue increases. For Coca Cola if they notice a decrease in revenue they would offer products at a discount to increase revenue. They do this quite often with sales such buy 2 20 oz. bottles for $3 instead of the normal $1.89 each price
Price changes affect demand for various foods. According to the economic theory, consumption of a certain product falls as the price of that item rises...
Tradeoffs between experiments, field experiments, natural experiments, and field data. American Journal of Agricultural Economics, 91(5), 1266-1271. doi:10.1111/j.1467-8276.2009.01295.x
There are the everyday issues of family life especially on allowance of their children in their schooling, balancing budgets on in terms of basic needs of their family and especially on planning for the future and keeping up with development in the area of farming and also the added pressures of managing corn farm during difficult times like floods, market fluctuation or drought can sometimes seem overwhelming that can affected of most of the farmers. Most farmers sacrifice their hardships on managing their farm such as financial strain, social isolation, reduced access services and long hours of work (Olson and Schellen 1986).Many farming families respond to hard times by tightening the household budget and spending less on food, clothes and maintenance of equipment.
Generally, technological change in agriculture can be categorized as labor-intensive and capital-intensive system or it can be yield-increasing with affecting labour or capital intensity. Therefore, the impact of technological change in these directions become more complex and would have positive or negative impact depending on how much the agent is constrained in respective resources, to what extent market is imperfect to balance resource constraints, and what other institutional factors influences the movement of resource from intensive and extensive agricultural margins (Angelsen & Kaimowitz, 2001). Market or policies that increase output price or reduce input cost also found to have a contrary or minor impact in reducing crop land expansion. On one hand, profitability of agriculture could encourage farmer to use improved input and increase yield or it could create incentive to clear forest for additional production. Thus, the outcome depends on the availability of labour and land. Technological improvements and productivity gains potentially also make the agricultural activity more profitable and thus more attractive, resulting in an increase in total agricultural land rather than a reduction (Lambin & Meyfroidt, 2011) contrary to most of the theoretical assumptions. An increase in input price could have both effects on one hand, reduce the profitability of agriculture and hence, the area allocated to farming. On the other hand, farmers could replace fertilizer with other input, land, through expansion. Besides, access to credit or lower interest rate for capital also found to have resulted in expansion of land through relaxing farmers’ capital constraints. However, creation of off-farm income could not be a guarantee since increased income can be allocated to acquire extra land, which in the case of rural
There are four distinctive characteristics, when dealing with supply response of perennial crops. According to Soontaranurak(2011), these characteristics separately and collectively, imply that producers must have foresight or long-term planning with reference to investment. First, perennial crops have a biologically-determined gestation period between planting and harvesting. Second, current production depends on previous output levels. Third, there are significant costs of adjustment which restrict the planting and removal of trees. Fourth, planting and removal decisions are restricted by both past decisions and the existence of binding non-negativity constraints about the adjustment process(technical conditions of production, the availability
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.
There are many influences on food choice for a rural household. The household agricultural output contributes to household food security by providing them with direct access to food they that can harvested, cook and fed their family members. Since the households income are from the sale of produce grown and other employment activities the family is relatively food secure during certain periods. They may be vulnerable if their agriculture production is negatively affect since it largely contributes to the overall household income level. The food choices made by this households seeks to maximize their utility with whatever income constraint exist.
Farmers have no specific amount of money that they are going to receive each year. This unreliability upon income causes financial problems when a family is involved.