This module represents agricultural trade among world regions. It ensures that the regional demand is met by domestic production and imports from other regions. The global trade balance dictates that global production must be larger than or equal to global demand. For non-traded goods, the regional production must be larger than or equal to regional demand.
| Description | Unit | A | B | C | D | E | |
|---|---|---|---|---|---|---|---|
| vm_prod_reg (i, kall) |
Regional aggregated production | \(10^6 tDM/yr\) | x | x | x | x | x |
| vm_supply (i, kall) |
Regional demand | \(10^6 tDM/yr\) | x | x | x | x | x |
| Description | Unit | |
|---|---|---|
| vm_cost_trade (i) |
Regional trade costs | \(10^6 USD_{05MER}/yr\) |
In this realization, agricultural trade is fully prescribed exogenously. This also means that there is no interaction between regions as amounts of exports and imports are fix.
The regional production must be larger than the regional demand plus exports from that region (or minus imports in case of a negative trade balance).
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,kall) \geq \sum_{supreg(h2,i2)} vm\_supply(i2,kall) + \sum_{ct}f21\_trade\_balance(ct,h2,kall) \end{multline*}\]
Limitations regions are completely separated and do not interact with each other
In this realization, agricultural trade is fully liberalized in all timesteps.
For traded goods the only active constraint is that the global supply is larger or equal to demand. This means that production can be freely allocated globally based on comparative advantages.
\[\begin{multline*} \sum_{i2 }vm\_prod\_reg(i2,k\_trade) \geq \sum_{i2} vm\_supply(i2,k\_trade) \end{multline*}\]
For non-tradable commodites, the regional supply should be larger or equal to the regional demand.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_notrade) \geq \sum_{supreg(h2,i2)} vm\_supply(i2,k\_notrade) \end{multline*}\]
Limitations This realization does not account for current trends in agricultural trade.
In this realization, there is no agricultural trade, i.e. regions are fully self-sufficient and dependent on domestic production.
For all commodites, the regional supply should be larger or equal to the regional demand.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,kall) \geq \sum_{supreg(h2,i2)} vm\_supply(i2,kall) \end{multline*}\]
Limitations This realization does not account for current trends in agricultural trade.
In this realization trade patterns defined by self-sufficiency ratios
and export shares, together with regional demands, establish a baseline
value for the production of traded products in the superregions.
Production is then allowed to fluctuate freely within a band around this
baseline value, only being enforced to maintain the condition of global
production exceeding global demand. The width of the production band is
determined by the i21_trade_bal_reduction (ptb) factor.
Effectively, this factor splits the global demand into two pools: The
ptb share of demand goes into a pool for which the origin
of products is fixed by the self-sufficiency ratios and export shares.
This “self-sufficiency” pool thus implies minimum production levels in
superregions, which are enforced by the lower bound of the production
band. The remaining part of the demand can be allocated more freely
based on comparative advantage in production of different superregions,
though still being constrained by the upper bounds of the production
band.
The superregional self-sufficiency ratios f21_self_suff
define how much of the demand of each superregion h for
each traded good k_trade is met by domestic production.
Self-sufficiency ratios smaller than one indicate that the superregion
imports from the world market, while self-sufficiencies greater than one
indicate that the superregion produces for export. The superregional
export shares f21_exp_shr distribute the total excess
demand of the importing superregions to the exporting superregions.
Trade costs are the sum of trade margins (international transport costs) and trade tariffs.
In the comparative advantage pool, the main constraint is that the global supply is larger or equal to demand. This means that production can be freely allocated globally based on comparative advantages.
\[\begin{multline*} \sum_{i2 }vm\_prod\_reg(i2,k\_trade) \geq \sum_{i2} vm\_supply(i2,k\_trade) + \sum_{ct}f21\_trade\_balanceflow(ct,k\_trade) \end{multline*}\]
For non-tradable commodites, the superregional supply should be larger or equal to the superregional demand.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_notrade) \geq \sum_{supreg(h2,i2)} vm\_supply(i2,k\_notrade) \end{multline*}\]
The following equations define the production band. The share of
demand that has to be fulfilled through the self-sufficiency pool is
determined by a trade balance reduction factor for each commodity
i21_trade_bal_reduction(ct,k_trade) (Schmitz et al. 2012). If the trade
balance reduction equals 1, all demand enters the self-sufficiency pool.
If it equals 0, all demand enters the comparative advantage pool. Note
that m21_baseline_production is a macro defined in
core/macros.gms. Lower bound for production.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_trade) \geq m21\_baseline\_production\left(vm\_supply, v21\_excess\_prod, f21\_self\_suff\right) \cdot \sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade) - v21\_import\_for\_feasibility(h2,k\_trade) \end{multline*}\]
Upper bound for production.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_trade) \leq \frac{ m21\_baseline\_production\left(vm\_supply, v21\_excess\_prod, f21\_self\_suff\right) }{ \sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade)} \end{multline*}\]
The global excess demand of each tradable good
v21_excess_demad equals to the sum over all the imports of
importing superregions.
\[\begin{multline*} v21\_excess\_dem(k\_trade) \geq \sum_{h2}\left( \sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) \cdot \left(1 - \sum_{ct}f21\_self\_suff(ct,h2,k\_trade)\right) \$\left(\sum_{ct}f21\_self\_suff(ct,h2,k\_trade) < 1\right)\right) + \sum_{ct}f21\_trade\_balanceflow(ct,k\_trade) + \sum_{h2} v21\_import\_for\_feasibility(h2,k\_trade) \end{multline*}\]
Distributing the global excess demand to exporting superregions is based on export shares (Schmitz et al. 2012). Export shares are derived from FAO data (see Schmitz et al. (2012) for details). They are 0 for importing superregions.
\[\begin{multline*} v21\_excess\_prod(h2,k\_trade) = v21\_excess\_dem(k\_trade) \cdot \sum_{ct}f21\_exp\_shr(ct,h2,k\_trade) \end{multline*}\]
\[\begin{multline*} v21\_cost\_trade\_reg(h2,k\_trade) \geq \left(i21\_trade\_margin(h2,k\_trade) + i21\_trade\_tariff(h2,k\_trade)\right) \cdot \sum_{supreg(h2,i2)}\left( vm\_prod\_reg(i2,k\_trade)-vm\_supply(i2,k\_trade)\right) + v21\_import\_for\_feasibility(h2,k\_trade) \cdot s21\_cost\_import \end{multline*}\]
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_cost\_trade(i2) = \sum_{k\_trade}v21\_cost\_trade\_reg(h2,k\_trade) \end{multline*}\]
Limitations This realization depends on predetermined self-sufficiency rates and export shares, which leads to a relative fixed trade pattern.
Within this realization, there are two ways for a region to fulfill
its demand for agricultural products: a self-sufficiency pool based on
historical region specific trade patterns, and a comparative advantage
pool based on most cost-efficient production. In the self-sufficiency
pool, regional self-sufficiency ratios
f21_self_suff_seedred_1995(i,k) defines how much of the
demand of each region i for each traded goods
k_trade has to be met by domestic production. Self
sufficiency ratios smaller than one indicate that the region imports
from the world market, while self-sufficiencies greater than one
indicate that the region produces for export. This realization uses
world-region-level bilateral trade margins and tariffs for traded
goods.
In the comparative advantage pool, the active constraint ensures that superregional and thus global supply is larger or equal to demand. This means that production can be freely allocated globally based on comparative advantages.
\[\begin{multline*} \sum_{i2 }vm\_prod\_reg(i2,k\_trade) \geq \sum_{i2} vm\_supply(i2,k\_trade) + \sum_{ct}f21\_trade\_balanceflow(ct,k\_trade) \end{multline*}\]
amount produced superregionally must be equal to supply + net trade
\[\begin{multline*} \sum_{supreg\left(h2, i2\right)}\left( vm\_prod\_reg\left(i2, k\_trade\right)\right) \geq \sum_{supreg(h2,i2)}\left( vm\_supply\left(i2, k\_trade\right) - \sum_{i\_ex}\left( v21\_trade\left(i\_ex, i2, k\_trade\right)\right) + \sum_{i\_im}\left( v21\_trade\left(i2, i\_im, k\_trade\right)\right)\right) \end{multline*}\]
For non-tradable commodites, the regional supply should be larger or equal to the regional demand.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_notrade) \geq \sum_{supreg(h2,i2)} vm\_supply(i2,k\_notrade) \end{multline*}\]
The following equation indicates the regional trade constraint for
the self-sufficiency pool. The share of regional demand that has to be
fulfilled through the self-sufficiency pool is determined by a trade
balance reduction factor for each commodity
i21_trade_bal_reduction(ct,k_trade) according to the
following equations (Schmitz et al. 2012). If the trade
balance reduction equals 1
(f21_self_suff(ct,i2,k_trade) = 1), all demand enters the
self-sufficiency pool. If it equals 0, all demand enters the comparative
advantage pool. Lower bound for production.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_trade) \geq \left(\left(\sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) + v21\_excess\_prod(h2,k\_trade)\right) \cdot \sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade)\right) \$\left(\sum_{ct}\left(f21\_self\_suff(ct,h2,k\_trade) \geq 1\right)\right) + \left(\sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) \cdot \sum_{ct}f21\_self\_suff(ct,h2,k\_trade) \cdot \sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade)\right) \$\left(\sum_{ct}\left(f21\_self\_suff(ct,h2,k\_trade) < 1\right)\right) - v21\_import\_for\_feasibility(h2,k\_trade) \end{multline*}\]
Upper bound for production.
\[\begin{multline*} \sum_{supreg(h2,i2)}vm\_prod\_reg(i2,k\_trade) \leq \left(\frac{\left(\sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) + v21\_excess\_prod(h2,k\_trade)\right)}{\sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade)}\right) \$\left(\sum_{ct}\left(f21\_self\_suff(ct,h2,k\_trade) \geq 1\right)\right) + \left(\sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) \cdot \frac{\sum_{ct}f21\_self\_suff(ct,h2,k\_trade)}{\sum_{ct}i21\_trade\_bal\_reduction(ct,k\_trade)}\right) \$\left(\sum_{ct}\left(f21\_self\_suff(ct,h2,k\_trade) < 1\right)\right) \end{multline*}\]
The global excess demand of each tradable good
v21_excess_demad equals to the sum over all the imports of
importing regions.
\[\begin{multline*} v21\_excess\_dem(k\_trade) \geq \left(\sum_{h2}\left( \sum_{supreg(h2,i2)}vm\_supply(i2,k\_trade) \cdot \left(1 - \sum_{ct}f21\_self\_suff(ct,h2,k\_trade)\right) \$\left(\sum_{ct}f21\_self\_suff(ct,h2,k\_trade) < 1\right)\right) + \sum_{ct}f21\_trade\_balanceflow(ct,k\_trade)\right) + \sum_{h2} v21\_import\_for\_feasibility(h2,k\_trade) \end{multline*}\]
Distributing the global excess demand to exporting regions is based on regional export shares (Schmitz et al. 2012). Export shares are derived from FAO data (see Schmitz et al. (2012) for details). They are 0 for importing regions.
\[\begin{multline*} v21\_excess\_prod(h2,k\_trade) = v21\_excess\_dem(k\_trade) \cdot \sum_{ct}f21\_exp\_shr(ct,h2,k\_trade) \end{multline*}\]
Trade tariffs are associated with exporting regions. They are dependent on net exports and tariff levels.
\[\begin{multline*} v21\_cost\_tariff\_reg(i2,k\_trade) \geq \sum_{i\_im}\left( \sum_{ct}\left( i21\_trade\_tariff\left(ct, i2,i\_im,k\_trade\right)\right) \cdot v21\_trade(i2,i\_im,k\_trade)\right) \end{multline*}\]
Trade margins costs assigned currently to exporting region. Margins at region level
\[\begin{multline*} v21\_cost\_margin\_reg(i2,k\_trade) \geq \sum_{i\_im}\left( i21\_trade\_margin(i2,i\_im,k\_trade) \cdot v21\_trade(i2,i\_im,k\_trade)\right) \end{multline*}\]
regional trade values are the sum of transport margin and tariff costs
\[\begin{multline*} v21\_cost\_trade\_reg(i2,k\_trade) \geq v21\_cost\_tariff\_reg(i2,k\_trade) + v21\_cost\_margin\_reg(i2,k\_trade) + \sum_{supreg(h2,i2)} v21\_import\_for\_feasibility(h2,k\_trade) \cdot s21\_cost\_import \end{multline*}\]
Regional trade costs are the costs for each region aggregated over all the tradable commodities.
\[\begin{multline*} vm\_cost\_trade(i2) = \sum_{k\_trade} v21\_cost\_trade\_reg(i2,k\_trade) \end{multline*}\]
Limitations This realization depends on predetermined self-sufficiency rates and export shares, which leads to a relative fixed trade pattern. Bilateral trade happens within the above, based on bilateral tariffs and margins. Other notable difference from selfsuff_reduced is that bilateral margins are now defined over regions (as these are transport costs) as opposed to super-regions (which delimit free trade zones or similar large regions)
| Description | Unit | A | B | C | D | E | |
|---|---|---|---|---|---|---|---|
| f21_exp_shr (t_all, h, kall) |
Superregional and crop-specific export share | \(1\) | x | x | |||
| f21_self_suff (t_all, h, kall) |
Superregional self-sufficiency rates | \(1\) | x | x | x | x | |
| f21_trade_bal_reduction (t_all, trade_groups21, trade_regime21) |
Share of inelastic trade pool | \(1\) | x | x | |||
| f21_trade_balance (t_all, h, kall) |
trade balance of positive exports and negative imports | \(10^6 tDM/yr\) | x | x | |||
| f21_trade_balanceflow (t_all, kall) |
Domestic balance flows | \(10^6 tDM/yr\) | x | x | |||
| f21_trade_margin (h, kall) |
Costs of freight and insurance | \(USD_{05MER}/tDM\) | x | x | |||
| f21_trade_tariff (h, kall) |
Specific duty tariffs | \(USD_{05MER}/tDM\) | x | x | |||
| i21_trade_bal_reduction (t_all, k_trade) |
Trade balance reduction | \(1\) | x | x | x | ||
| i21_trade_margin (h, k_trade) |
Trade margins | \(USD_{05MER}/tDM\) | x | x | x | ||
| i21_trade_tariff (h, k_trade) |
Trade tariffs | \(USD_{05MER}/tDM\) | x | x | x | ||
| q21_cost_trade (h) |
Superregional trade costs | \(10^6 USD_{05MER}/yr\) | x | x | |||
| q21_cost_trade_reg (h, k_trade) |
Superregional trade costs for each tradable commodity | \(10^6 USD_{05MER}/yr\) | x | x | |||
| q21_costs_margins (i, k_trade) |
Regional bilateral trade requirements | x | |||||
| q21_costs_tariffs (i, k_trade) |
Regional trade tariff costs | \(10^6 USD_{05MER}/yr\) | x | ||||
| q21_excess_dem (k_trade) |
Global excess demand | \(10^6 tDM/yr\) | x | x | |||
| q21_excess_supply (h, k_trade) |
Superregional excess production | \(10^6 tDM/yr\) | x | x | |||
| q21_notrade (h, kall) |
Superregional production constraint of non-tradable commodities | \(10^6 tDM/yr\) | x | x | x | x | x |
| q21_trade_bilat (h, k_trade) |
Superregional bilateral trade requirements | \(10^6 tDM/yr\) | x | ||||
| q21_trade_glo (k_trade) |
Global production constraint | \(10^6 tDM/yr\) | x | x | x | ||
| q21_trade_reg (h, k_trade) |
Superregional trade balances i.e. minimum self-sufficiency ratio | \(1\) | x | x | |||
| q21_trade_reg_up (h, k_trade) |
Superregional trade balances i.e. maximum self-sufficiency ratio | \(1\) | x | x | |||
| s21_cost_import | Cost for additional imports to maintain feasibility | \(USD_{05MER}/tDM\) | x | x | |||
| s21_min_trade_margin_forestry | Minimum trade margin for forestry products | \(USD_{05MER}/tDM\) | x | x | |||
| s21_trade_tariff | Trade tariff switch (1=on 0=off) | \(1\) | x | x | |||
| s21_trade_tariff_fadeout | fadeout scenario setting for trade tariffs | x | |||||
| s21_trade_tariff_startyear | year to start fading out trade tariffs | x | |||||
| s21_trade_tariff_targetyear | year to finish fading out trade tariffs | x | |||||
| v21_cost_margin_reg (i, k_trade) |
Rregional trade margins for each tradable commodity | \(10^6 USD_{05MER}/yr\) | x | ||||
| v21_cost_tariff_reg (i, k_trade) |
Regional trade tariffs for each tradable commodity | \(10^6 USD_{05MER}/yr\) | x | ||||
| v21_cost_trade_reg (h, k_trade) |
Superregional trade costs for each tradable commodity | \(10^6 USD_{05MER}/yr\) | x | x | |||
| v21_excess_dem (k_trade) |
Global excess demand | \(10^6 tDM/yr\) | x | x | |||
| v21_excess_prod (h, k_trade) |
Superregional excess production | \(10^6 tDM/yr\) | x | x | |||
| v21_import_for_feasibility (h, k_trade) |
Additional imports to maintain feasibility | \(10^6 tDM/yr\) | x | x | |||
| v21_trade (i_ex, i_im, k_trade) |
Amounts traded bilaterally | \(10^6 tDM/yr\) | x |
| description | |
|---|---|
| ct(t) | Current time period |
| h | all superregional economic regions |
| h2(h) | Superregional (dynamic set) |
| i | all economic regions |
| i2(i) | World regions (dynamic set) |
| k_hardtrade21(k_trade) | Products where trade should be limited |
| k_import21(k_trade) | Commodities that can have additional imports to maintain feasibility |
| k_notrade(kall) | Production activities of non-tradable commodites |
| k_trade(kall) | Production activities of tradable commodities |
| kall | All products in the sectoral version |
| supreg(h, i) | mapping of superregions to its regions |
| t_all(t_ext) | 5-year time periods |
| t(t_all) | Simulated time periods |
| trade_groups21 | Trade groups |
| trade_regime21 | Trade scenarios |
| tstart21(t_all) | Historic time steps |
| type | GAMS variable attribute used for the output |
Xiaoxi Wang, Anne Biewald, Christoph Schmitz, Markus Bonsch
11_costs, 16_demand, 17_production