A farm household model for agri-food policy analysis in developing countries: Application to smallholder farmers in Sierra Leone

Abstract

This paper presents a generic farm household model for use in the context of developing countries to gain knowledge on food security and rural poverty alleviation under different policy options. It is a static positive programming model which simultaneously solves a set of microeconomic farm models reproducing the behaviour of representative individual farm households. This model is designed to capture key features of developing countries’ agriculture such as the non-separability of production and consumption decisions due to market imperfections, the inter-linkage between transaction costs and market participation decisions, the interaction among farm households for factor markets and the seasonality of resource use. Model use is illustrated in this paper by simulating the impact of rice seed policy on the livelihood of representative smallholder farmers in Sierra Leone. Results show that the seed policy would improve farm productivity and boost household income but that it is not sufficient to fight poverty since 90% of the surveyed farm households would continue to live below the extreme poverty line of 1 USD-equivalent per person per day.