1) Does the TIF of the farm decrease with a 15€/ha subsidy ? Explain.
A 15€/ha subsidy per hectare does not encourage the farmer to change his practices and the average TIF therefore does not evolve. Indeed, the subsidy is lower than the loss of gross margin per hectare which a change in technology would involve.
2) What is the minimum subsidy level which is likely to encourage the farmer to react ? What impact does it have on the average farm ? On the income of the farmer ?
The average TIF would only decrease with a 25€/ha subsidy.
3) Simulate a scenario in which the subsidy is 30€/ha. Is this subsidy effective ? Efficient ?
The 30€/ha subsidy is effective : the State has met its objective. But it is inefficient. Indeed, the State may meet that same objective with a lower subsidy (for example 25€/ha). In order to be as efficient as possible, the State must find the lowest possible subsidy amount (in order to reduce the total cost) which encourages the farmer to change his farming practices.
Summary of solutions
| Crop | Disruption level | Scenario 1 | Scenario 2 | Scenario 3 | Scenario 4 | Scenario 5 |
| TIF limit | 3 | 3 | 3 | 3 | 3 | |
| Total TIF | 4.5 | 4.5 | 4.5 | 3 | 3 | |
| Subsidy | 0 | 15 | 20 | 25 | 30 | |
| Soft wheat | Rais | 33.333 | 33.333 | 33.333 | 2.083 | 2.083 |
| Soft wheat | protI | 31.250 | 31.250 | |||
| Soft wheat | systCl | |||||
| Rapeseed | Rais | 33.333 | 33.333 | 33.333 | 2.083 | 2.083 |
| Rapeseed | protI | 31.250 | 31.250 | |||
| Rapeseed | systCl | |||||
| Winter barley | Rais | 33.333 | 33.333 | 33.333 | 2.083 | 2.083 |
| Winter barley | protI | 31.250 | 31.250 | |||
| Winter barley | systCl | |||||
| Hemp | systCl | |||||
| Income | 49850 | 49850 | 49850 | 50145.313 | 50645.313 |
You can download the solution and check that you wrote the model correctly and obtained the same solution : modelEco_ParisBasin_subsidies.gms
