Agricultural economy

{{ComponentTemplate2 |Application=Eururalis (2007) project; Millennium Ecosystem Assessment - MA (2005) project; Global Environmental Outlook - GEO4 (2007) project; AgMIP and ISI-MIP project; The Protein Puzzle (2011) project; |IMAGEComponent=Drivers; Land-use allocation; |ExternalModel=EFIGTM model; |KeyReference=Stehfest et al., 2013; Woltjer et al., 2014; Von Lampe et al., 2014; |Reference=Woltjer et al., 2011; Kallio et al., 2004; Carpenter et al., 2006; |InputVar=Population; GDP per capita; Capital supply; Labour supply; Trade policy; Biofuel policy; Land supply; Potential crop and grass yield - grid; Technological change (crops and livestocks); |Parameter=Income and price elasticities; |OutputVar=Management intensity crops; Management intensity livestock; Food availability per capita; Commodity price; Livestock production; Crop production; Demand (all commodities); Trade (all commodities); |Description=As a result of the growing world population and higher per capita consumption, production of food, feed, fibres and other products, such as bioenergy and timber, will need to increase rapidly in the coming decades. Even with the expected improvements in agricultural yields and efficiency, there will be increasing demand for more agricultural land. However, expansion of agricultural land will lead to deforestation and increases in greenhouse gas emissions, loss of biodiversity and ecosystem services, and nutrient imbalances. To reduce these environmental impacts, a further increase in agricultural yields is needed, together with other options such as reduced food losses, dietary changes, improved livestock systems, and better nutrient management.

In the IMAGE framework, future development of the agricultural economy can be calculated using the agro-economic model MAGNET (formerly LEITAP; Woltjer et al. (2011); Woltjer et al. (2014)). MAGNET is a computable general equilibrium (CGE) model that is connected via a soft link to the core model of IMAGE. Demographic changes and rising incomes are the primary driving factors of the MAGNET model, and lead to increasing and changing demand for all commodities including agricultural commodities. In response to changing demand, agricultural production is increasing, and the model also takes into account changing prices of production factors, resource availability and technological progress. In MAGNET, agricultural production supplies domestic markets, and other countries and regions are supplied via international trade, depending on historical trade balances, competitiveness (relative price developments), transport costs and trade policies. MAGNET uses information from IMAGE on land availability and suitability, and on changes in crop yields due to climate change and agricultural expansion on inhomogeneous land areas. The results from MAGNET on production and endogenous yield (management factor) are used in IMAGE to calculate spatially explicit land-use change, and the environmental impacts on carbon, nutrient and water cycles, biodiversity, and climate.

Although MAGNET is the standard agro-economic model used with IMAGE, other models can be linked with IMAGE. For example, the IMPACT model was used with IMAGE in the Millennium Ecosystem Assessment (Carpenter et al., 2006), and in a PBL study on protein supply, both the [[MAGNET model|MAGNET and the IMPACT model were used to study the same set of scenarios. This allowed a systematic comparison between IMPACT and MAGNET (Stehfest et al., 2013). In IMAGE, demand for forest products can be derived from several sources, the most simplest being via a relationship with GDP or preferably, from specific forest demand models, such as EFIGTM modelEFI-GTM (Kallio et al., 2004). In the future, competition between forestry and other land uses can be included using the forestry module in MAGNET. Other land-use changes, such as infrastructure expansion, which do not require interregional links, are described in the land-use allocation model).

|ComponentCode=AEF |AggregatedComponent=Agriculture and land use |FrameworkElementType=pressure component }}