Technical Bulletin No. (TB-1918) 61 pp

February 2008

Equilibrium Displacement Mathematical Programming Models: Methodology and a Model of the U.S. Agricultural Sector

The objective of this research is to extend and generalize the equilibrium displacement methodology by combining it with mathematical programming methods and existing knowledge of farm sector relationships to develop sectoral adjustment models that can operate in pure competition, monopoly/monopsony, or mixed-competition. A model of the U.S. agricultural sector at the national aggregate level is presented to illustrate the methods. An appendix contains a user's manual describing the operation of the model. Further appendices contain documentation of the structure of the spreadsheets, the programming tableau, and the SAS solution program.

Keywords: Equilibrium displacement models, positive mathematical programming, U.S. farm programs, direct payments, counter-cyclical payments, loan deficiency payments, conservation reserve

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