Abstract
This paper presents an integrated model for the economic and environmental assessment of the use of natural resources when new activities (i.e. biomass crops for energy production) are introduced into the farm production plan. The methodology is based on the integration of positive mathematical programming (PMP) with the AquaCrop model developed by FAO. PMP represents farmer decision processes and evaluates how farms react to the biomass-sorghum activity option at different price levels. AquaCrop evaluates the relationship between water needs and biomass production and assesses the effect of the land allocation on water requirements at regional level. The integration of these two models assists global policy evaluation at regional level as it makes it possible to identify the economic threshold for biomass crops, the change in land allocation and total water requirement. The model can help policy makers to evaluate the impacts of variations in crop profitability and market innovations on farm profitability, land use and water consumption and the sustainability of the market scenario.
