Impact/Purpose:

The first objective of this project is to update the AGSIM model's parameters and extend the model to include fruits and vegetables to improve its capability in estimating regional impacts on farmers and consumers, crop production, export, and costs of farm program associated with existing/proposed EPA's regulations and policies. The second objective is to make the new updated/extended version of AGSIM model available for any Office within the agency and training necessary to run the model.

Description:

AGSIM is a large-scale econometric simulation model of regional crop and national livestock production in the United States. The model was initially developed to analyze the aggregate economic impacts of a wide variety issues facing agriculture, such as technological change, pesticide withdrawals, farm programs, and environmental degradation. This model ties together econometrically estimated demand and supply equations and solves for the set of crop and livestock prices that simultaneously clears all markets in a given year for given exogenous factors. The most updated version is capable of analyzing the economic effects of changes in farm programs and other relevant policies on 1) changes in regional per-acre crop yields, 2) changes in production costs, 3) changes in target prices and set-aside rates, 4)changes in paid land diversion by crop and region, and 5) acreage in the conservation reserve. The simulation model can provide a full welfare evaluation of 1) domestic consumers' surplus, 2) farm income, 3) government program payments, and foreign surplus. AGSIM is based on a set of supply equations for each of the 11 regions and national demand elasticity. Crops included in the model are corn, grain sorghum, barley, oats, wheat, soybeans, cotton, and hay.

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