A Simulation Framework to Study Policy Formulation and Evaluation of Economic Viability and Sustainability of Small and Marginal Farmers

This paper proposes an economic computational agent-based framework, referred to here as FarmSIM, to model the micro-level economic and financial behaviour of farmers. We model macro-level external environmental impacts of costs, prices and rainfall through a set of flexible power functions. The framework allows us to trace a “digital future” of a farming community over a number of “seasons”, effectively offering the ability to test an appropriate policy on the community. FarmSIM may provide a valuable test-bed for gaining a direct insight into economic viability and sustainability issues in relation to policy implementation. The paper suggests an evaluation framework, FarmSIM, to assess the efficacy of policy formulation by Governments and other institutions concerned before the policies are implemented. The paper demonstrates the utility of FarmSIM by posing important questions relevant to pricing, profitability and indebtedness in the farming community in the form of simulation models within the FarmSIM framework. Realistic data are used to assess the dynamics and the effects of interactions of core variables over time.