The MODERE Model and The Economic Analysis of Farmers’ Decisions

The MODERE, the Ministry of the Environment Irrigation Decision Model, is a simulation tool whichuses mathematical programming methods to reveal the implicit multiattribute objective function lyingbehind the observed cropping decision. The model takes different criteria such as profit maximization,risk aversion, avoidance of management complexities and so forth into account. In order to determinethe feasible combination of attributes of this objective function the model considers the productionpossibility frontier explicitly as depending on market prices, policy incentives, availability ofproduction factors, water irrigation facilities agronomic vocation and other constraints.Once calibrated the model becomes a powerful tool to assess the impact of different policy scenariossuch as subsidies decoupling, water prices modifications, irrigation technique substitution and so on.The MODERE is a preference revelation model purposedly designed to be integrated in the DecisionSupport Platform which is used by the Spanish Ministry of the Environment to compare the policyscenarios which are relevant to assess the effectiveness and economic impact of the measuresdesigned to reach the environmental objectives of the Water Framework Directive.The model is supported by a comprehensive data base built on purpose for its implementationcovering almost all the Spanish Irrigation Districts with high spatial detail. This model is currentlyone of the important modules of the information and decision support systems developed by theEconomic Analysis Unit of the Water Directorate at the Ministry of the Environment in Spain.