THE APPROACH

In the field with which we are dealing short-run and long-run problems are inter- related. It is impossible either to distinguish perfectly between them or to separate them in a satisfactory manner. Yet, when looking at the reference system in Figure 10 that we have developed for the country models we can tentatively identify the main fields of short-run and long-run investigations as well as the points of contact between them.

In the short-run investigation the present agricultural policies are described under the prevailing economic conditions (Parikh, 1977; Csaki, 1978, 1979; de Haen et al.,

1978). In the closed economic model of a country the food sector differs only in its degree of detail from the rest of the economy. In fact it is such an integral part of the economy that Figure 10 could represent any other sector without the slightest change.

Although this is a somewhat more detailed version of a national model from Figure 1 it is still oversimplified.

The main parts of this system are the blocks for production, exchange, income redistribution and spending, assessment of the nutritional situation, and government policy. Of these, the exchange part is the connecting module with other countries. The box labeled "international market" is just a dummy for a third dimension in the figure.

110 F. Rabar The linkage system, taking care of the exchange part, is based on the general equilibrium approach (Keyzer, 1977a, b, c; Keyzer et al., 1978). What is important to note here is that all the countries have to meet certain "linkage requirements" in order to be able to be linked with the system. The main requirements are the following. (1) The commodity list should be accepted. It is possible to introduce more commodities than there are on the commodity list but only those products which are defined by the list participate in the international exchange. (2) The time horizon will be 15 years and the time increment one year. (3) There is a one-year time lag after production decisions are made. Production is given at the time of exchange. (4) The models should be closed; the rest of the economy should be represented as one aggregated commodity. (5) Government policies should be explicitly formulated. ( 6 ) The models should behave as continuous nonsmooth excess- demand functions of international prices.

Within these restrictions much freedom is given to represent different national economies. Production might be represented by different methodologies (in fact almost all countries use their own methods) and with proper modifications the centrally planned economies can also be fitted into the system (Csaki et al., 1978).

Let us return to our reference system and summarize its shortcomings: (I) agricul- ture, being a part of the general structure, is hidden here; (2) in Figure 10 two dimensions are missing, namely international exchange and time delays; (3) a range of feedback relations among resources, technologies, and environment is also missing.

By turning to this last item we can identify the long-run problems. There are feed- back relations in this field which should be investigated. In the short run it is quite safe to assume that renewable resources and environment will not be heavily affected by the pro- duction methods and that the shift in technologies will be slow and predictable up to the short-term horizon. However, in the long run we cannot rely on these assumptions. As soon as a long-run process is started, the short-run pressures in these interconnected fields begin to exhibit lives of their own and a slow long-run feedback mechanism begins to be felt.

This in turn reacts through production on short-run economic processes. To use a some- what naive analogy, the short-run economic system acts like a fast cogwheel which begins to move a big slow flywheel whichlater, under given circumstances, begins to take over the driving functions in the system. Technological developments, originally induced by labor or land scarcity, begin to develop autonomously once they have transformed the capital structure. This autonomous development forecloses more and more other technical options;

i.e. "jumping" t o another technical path will be more and more difficult. In addition, vi- cious circles may be created: e.g. scarcity of resources might lead to overexploitation of a technology which, through environmental deterioration, reduces the resources even further.

Here is the field for our second task which we will try to reformulate this year. In the new task definition (Hirs, 1979) we try to use all the experience we have gained in the single, partial solutions developed for problems in the related fields of environment, resources, and technology (Csaki, 1977; Carter et al., 1977; Clapham and Pestel, 1978;Golubev et al., 1978). The first tentative ideas connected with this task are under development.

Local problems in a global system

REFERENCES

Abel, M.E. (1975). The impact of U.S. agricultural policies o n trade of the developing countries. In G.S. Tolley and P.A. Zadrozny (Editors), Trade, Agriculture, and Development. Ballinger, Cambridge, Massachusetts, pp. 21 -56.

Carter. H.O., Csaki, C., and Propoi, A. (1977). Planning long-range agricultural investment projects: a dynamic linear programming approach. RM-77-38. International lnstitute for Applied Systems Analysis, Laxenburg, Austria.

Clapham, W.B. and Pestel, R. (1978). A common framework for integrating the economic and ecologic dimensions of human ecosystems: Part 1 - General considerations, RM-78-29; Part 2 - Pro- cesses and problem chains within the natural stratum, RM-78-30; Part 3 - Policy, uncertainty, and analysis, RM-78-3 1. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

Clark, C. (1967). Population Growth and Land Use. Macmillan, London.

Csaki, C. (1977). Dynamic linear programming model for agricultural investment and resources utilization policies. RM-77-36. International lnstitute for Applied Systems Analysis, Laxenburg, Austria.

Csaki, C. (1978). First version of the Hungarian Agricultural Model (HAM-I). RM-78-38. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Csaki, C. (1979) Second version of the Hungarian Agricultural Model (HAM-2). WP-79-71. Inter- national Institute for Applied Systems Analysis, Laxenburg, Austria.

Csaki, C., Jonas, A., and Meszaros, S. (1978). Modeling of centrally planned food and agricultural systems: a framework for a national policy model for the Hungarian food and agriculturesector.

RM-78-1 1. International Institute for Applied Systems Analysis, Laxenburg, Austria.

F A 0 (1976). F A 0 Trade Yearbook 1976. Food and Agricultural Organization, Rome.

Golubev, G., Shvytov, I., and Vasiliev, 0 . (1978). Environmental problems of agriculture. I: Water- related environmental impacts of agriculture at the field level. RM-78-32. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

de Haen, H. (1978). The Food and Agricultural Model of the lnternational Institute for Applied Systems Analysis. RM-78-24. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

de Haen, H., Schrader, J.V., and Tangermann, S. (1978). Modeling the EC agricultural sector: problem assessment, policy scenarios, and model outline. RM-78-23. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Hirs, J. (1979). An approach t o the investigation of limits and consequences of food production tech- nologies. Draft. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Jansen, (1975). Constructing Tomorrow's Agriculture. EEC Report. EEC, Brussels.

Johnson, D.G. (1975). Free trade in agricultural products: possible effects o n total output, prices, and t h e international distribution of output. In G.S. Tolley and P.A. Zadrozny (Editors), Trade, Agriculture, and Development. Ballinger, Cambridge, Massachusetts, pp. 3-20.

Josling, T. (1975). World food problem - national and international aspects. Food Policy, 1(1):3-14.

Keyzer, M.A. (1977a). Linking national models of food and agriculture. RM-77-2. lnternational tnstitute for Applied Systems Analysis, Laxenburg, Austria.

Keyzer, M.A. (1977b). Analysis of a national model with domestic price policies and quota o n inter- national trade. RM-77-19. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Keyzer, M.A. ( 1 9 7 7 ~ ) . lnternational trade policies in models of barter exchange. RM-77-5 1. Inter- national lnstitute for Applied Systems Analysis, Laxenburg, Austria.

Keyzer, M.A., Lemarechal, C., and Mifflin, R. (1978). Computing economic equilibria through non- smooth optimization. RM-78-13. International lnstitute for Applied Systems Analysis, Laxen- burg, Austria.

Klatzmann, J. (1975). Comment Nourrir Dix Milliards d'Hommes? Presses Universitaires d e France, Paris.

112 F. Rabar Littlechild, S., Weber, R., and Young, H.P. (1979). Strategic models of world food production and

trade. WP-79-58. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Neunteufel, M. (1977). The state of the art in modeling of food and agriculture systems. RM-77-27.

International Institute for Applied Systems Analysis, Laxenburg, Austria.

Parikh, K.S. (1977). A framework for an agricultural policy model for India. RM-77-59. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

Popov, T. (1978). The general situation and main tendencies of food and agricultural development in the European CMEA member countries (1960-1975 and up t o 1980). RM-78-51. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

Rabar, F. (1976). Food and agriculture: global aspects of supply and demand. CP-76-7. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Revelle, R. (1974). 1:ood and population. Scientific American, 231(3):160.

Schmidt, S.C. (1977). Assessment o f existing and prospective world economic and food trends.

RM-77-14. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

Schmidt, S.C. and Carter, H.O. (1978). National and international food policies and options that impact o n world trade and aid. RM-78-22. International Institute for Applied Systems Analysis, Laxenburg, Austria.

Swanson, E.R. (1975). Classification o f food and agricultural policies: objectives, instruments, and performance indicators. WP-75-151. lnternational Institute for Applied Systems Analysis, Laxenburg, Austria.

University of California (1974). A hungry world: the challenge to agiculture. Sumn~ary Report o f a Task Force Meeting. UCLA, Los Angeles, California.

DISCUSSION

In reply to a question by Kamrany, Rabar explained that the coordination between the national models is effected by the modelers' actually working together: every few months the groups are convened at IIASA in a very tense workshop, often sitting at the computer together throughout the night! Part of the work consists in studying how the national models behave in the linked mode. One problem lies in the balance of payments since the monetary system as such is normally not modeled.

Kellogg asked how climatic variations (both short-term variations (e.g. a major drought) and long-term changes) are represented in the models. Rabar replied that the original idea o f using a random procedure has been dropped; a scenario-type approach (e.g. considering simultaneous droughts in several major areas of the world) seems preferable. With regard to the long-run changes, exogenous assumptions could be intro- duced and their effects studied.

Parker asked how government policy aimed at influencing production, consump- tion, and/or trade is represented in the models. Rabar answered that neither endogenous nor exogenous treatment seems satisfactory: on the one hand, i f government policies were completely endogenized the predictive value of the model becomes questionable since government policies will definitely change in reaction to certain developments; on the other hand, ifgovernment policies were completely exogenized hundreds of scenarios

Local problems in a global system 113

would become possible. The crucial aspect lies in finding the proper level of endogeniz- ation, for example, by reducinggovernment policies to a few basic types which can be verified by running the models for a past period.

Asked by Roberts, Rabar outlined the treatment o f "energy "in the model: it is true that 'knergy "is represented within the "rest of the economy"; however, it can be explicitly introduced in the production functions, whereby exogenous changes in energy prices will exert a joint effect on all sectors of the model. As to technical change, it has practically been ignored so far, given the medium-term time horizon o f the model. In the next phase, however, the questions of what effects scarcities or abundances of resources will have on technical choices, and the feedback these choices will have on the environ- ment and on resources themselves, will be studied.

Steger wondered why "environment "is being treated only exogenously. Rabar replied that environment plays a role (a) on a small geographical scale and ( b ) on a long-run time scale. In a medium-term model based on nations as units it is almost impossible to endogenize environment. It can be introduced as a constraint to identify short-run pressures plus their long-run effects.

AIMS AND APPROACHES IN STUDYING THE "LIMITS AND