Modelling agri-food policy impact at farm-household level in developing countries (FSSIM-Dev) : application to Sierra Leone

This report presents a farm household model for use in the context of developing countries to gain knowledge on food security and rural poverty alleviation under different economic conditions and agri-food policy options. This model, called FSSIM-Dev (Farming System Simulator for Developing Countries), is an extension of the FSSIM model developed within the SEAMLESS project for impact assessment of agricultural and environmental policies on farm performances across Europe. FSSIM-Dev is conceived to be applied for family agriculture where farm household production, consumption and labour allocation decisions are non-separable due to market imperfections. Contrary to most well-known household models which are econometric-based, FSSIM-Dev is a non-linear optimization model which simultaneously solves a set of microeconomic models reproducing the behaviour of representative farm households. FSIM-Dev is designed to capture five key features of developing countries' agriculture: non-separability of production and consumption decisions; interaction among farm households for market factors; heterogeneity of farm households with respect to their both consumption baskets and resource endowments; inter-linkage between transaction costs and market participation decisions; and the seasonality of farming activities and resource use. Model use is illustrated in this report with an analysis of the combined effects of rice support policy and improved rice cropping management on the livelihood of representative farm households in Sierra Leone. Results show that both the rice support policy and the improved crop management would significantly increase rice productivity and boost household income but they are not sufficient to fight poverty since most of the farm household types would continue to live below the extreme poverty line of 1 USD-equivalent per day.