Rice, corn and livestock sector model for analysis of agricultural policies in the Philippines

While the model is "up and running" and generates results in accordance with some combination of historical experience and economic theory, more than the usual amount of caution needs to be exercised in interpreting the simulation output in that several of the parameters have not yet been estimated econometrically. Suggestive parameters, in particular for the livestock sector, have been incorporated into the model to facilitate model development and to allow analysis of subsector interactions. The model has been programmed in such a way that supply/demand parameters may be easily changed, so that the significance for policy of the values for specific parameters which have been selected in a somewhat ad hoc manner can be tested through sensitivity analysis. Chapters 2 and 4 discuss how the various supply/demand parameters were obtained. To the extent that policy results prove to be sensitive to a parameter which has been selected in an ad hoc manner, this suggests specific areas for future research. Personnel at the Policy Analysis Division of the Planning and Monitoring Service at the Department of Agriculture have been trained in the use of the version of the model reported on here, which has been updated to begin simulations with observed data for the 1989/90 crop year. The manual is organized as follows. Chapter 1 discusses the scope and objectives of the model, Chapter 2 provides a theoretical overview of how the model works, and Chapter 3 explains the mechanical details of how to run the model. As just mentioned above, estimation procedures for supply/demand parameters are discussed in Chapter 4 as is the procedure for updating the model. Finally, Chapter 5 provides a an example of how to use the model for policy analysis by presenting a series of eight related simulation runs. (Author abstract)