Modelling agri-food policy impact at farm-household level in developing countries (FSSIM-Dev): application to Sierra Leone

Abstract

This report describes the generic template of a farm-household model for use in the context of developing countries in order to gain knowledge on food security and rural poverty alleviation under different economic conditions and agri-food policy options. This model, called FSSIM-Dev (Farming System Simulator for Developing Countries), is an extension of the FSSIM model developed within the SEAMLESS project. Contrary to most well-known household models which are econometric based, FSSIM-Dev is a non-linear optimization model which relies on both the general household's utility framework and the farm's production technical constraints, in a non-separable regime. It is referred to as a static Positive Mathematical Programming (PMP) which optimise at farm household level, with the opportunities to simulate the exchange of production factors among farm-households. FSSIM-Dev is designed to capture five key features of developing countries or/and rural areas: (i) non-separability of production and consumption decisions due to market imperfection; (ii) interaction among farm-households for market factors; (iii) heterogeneity of farm households with respect to their both consumption baskets (demand side) and resource endowments (supply side); (iv) inter-linkage between transaction costs and market participation decisions; and (v) the seasonality of farming activities and resource use. Model use is illustrated in this report with an analysis of the combined effects of rice support policy, namely fertiliser subsidy policy, and improved rice cropping managements (practices) on the livelihood of representative farm households in Sierra Leone. Results show that, first, the improvement of rice cropping managements is a key factor to boost significantly farm household income in the studied region. Second, the amount of N fertilizer required for, mainly, upland rice appears too high and costly and could not be applied by farm households without policy support (i.e. subsidies). Third, both the simulated rice policy and the improved crop managements would increase farm productivity and boost household income but they are not sufficient to fight poverty since most of the farm household types would continue to live below the extreme poverty line of 1 USD-equivalent per day.