Models / FARMSIM: A Farm Income Simulator
FARMSIM is a simulation model used for projecting the probable economic and nutritional impacts of alternative technologies, farming systems, livestock management programs, marketing arrangements, crop mixes, risk management schemes, and environmental remediation programs on a representative crop/livestock farm.
FARMSIM is programmed in Microsoft® Excel using Simetar©. The Fortran based version of the model (FLIPSIM) has been used for 33 years to advise the U.S. Congress on the impacts of alternative farm programs, income tax provisions, and environmental policies, as well as private companies regarding their investments in renewable energy and technology. The new model was developed in Excel to provide a transparency not available in Fortran and to allow rapid adaptation to alternative countries, changing data availability, and issues facing farmers in developing countries.
The model simulates the base scenario and the alternative scenario using the same underlying stochastic weather history in APEX and NUTBAL so the differences in the results are due to the management variables that define the scenarios. For example, the analysis of an improved vaccine to control a cattle disease will use the same stochastic forage and crop residue values for the base and alternative scenario, so the difference in the farm’s economic and nutritional results are due to only the impact of the vaccine on animal health and improved performance, and added costs for the vaccine. The outputs from FARMSIM are estimates of empirical probability distributions for more than 100 key output variables (KOV). Probabilities of the KOV’s exceeding target levels and falling below maximums accepted values are displayed graphically in StopLight charts as shown below.
For More Information:
James W. Richardson
Regents Professor & Texas AgriLife Research Senior Faculty Fellow
Department of Agricultural Economics
Texas A&M University College Station, TX 77843
Learn more about the FARMSIM model at the Agricultural and Food Policy Center.
FARMSIM simulates an actual or representative farm for five years in an annual time step. The data to simulate a farm in FARMSIM can be developed from a survey of an actual family farm, data collected from a panel of producers in a common area, or statistical data for a village or larger area. FARMSIM can simulate a one-half hectare farm up to a multiple-thousand hectare farm.
- Budgets for crops and livestock
- Probability distributions of crop yields
- Probability distributions for livestock production
- Historical and projected average price
- Annual nutritional requirements for the farm family
Outputs from FARMSIM are estimates of empirical probability distributions for more than 100 key output variables (KOV). The primary KOV’s include:
- Annual net income for crops and/or livestock
- Annual ending cash reserves
- Annual nutrient intake by the family
- Net present value
- Probabilities of economic success, increasing real net worth, positive cash flows, and family nutrient intake exceeding average daily recommended quantities