The paper contributes to the methodology of linear programming applications to the optimal risk management. It is suggested to model two-stage decision making processes (before and after instantiation of stochastic, e.g. weather, parameters) using empirical distributions of stochastic parameters. This ensures that the resulting production programme does not suffer from resource shortages under any instantiation of the stochastic parameters within the linear combination of actually observed instantiations.
Access: on-line, PDF format (in Russian). UDK 631.115:512.711.3.

The marginal product of arable land and grassland is estimated by a shadow price parameterization. The shadow prices are obtained from multiple runs of a linear programming model of the Moscow region land market that randomly uses varying crop yields. The marginal product of land approximates the possible rental price of agricultural land from 2001-2003 under the assumption of a properly functioning land market. In 2003, this value (for arable land) varied from 290 to 1,309 roubles, depending on distance from Moscow and soil fertility. Higher crop yields negatively influence the marginal land product values. There is a declining trend of these values during the studied period, which impedes emerging market institutions.
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A shorter presentation of findings published in (155)
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A conference edition of (145).
Access: on-line, PDF document (in English). Alternative access: at AgEcon site (Univ. of Minnesota).

The preferences of corporate agricultural farms of Moscow region are approached by the instrumentality of data envelopment model. The hypothesized neoclassical behaviour (short-term profit maximization) is rejected in favour of Baumol's revenue maximizing model. The topmost factor constraining revenue is shortage of machinery.
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The results from dynamic DEA modeling of Moscow region corporate farms during 1995-2004. The following is concluded. The major source of inefficiency is a suboptimal input-output mix. One of the reasons for that is transitional markets volatility. Technical inefficiency is minor and mostly due to congestion problems. During the specified period the limiting factor of efficiency changed from the lack of liquidity to the lack of working power. There is an evidence of higher innovational capacities of larger corporate farms. Resources scarcity was found to improve the efficiency. Soft and too hard budget constraints simultaneously hamper the studied farms efficiency.
Access: on-line, PDF document (in English). Alternative access: the site of Chinese Economists Society (MS Word document).
A detailed summary in English.
The first draft of the paper in PDF.

The corporate farm size determinants are studied by the instrumentality of the dynamic DEA model from (166), which was re-estimated after fixing the identified data errors. The results suggest positive dependence of efficiency on size, which is not only due to the wider growth opportunities of highly efficient farms; return to scale is found to be volatile, thus hardly affecting managers' decisions concerning farm size; the best-practice farms (in terms of dynamic efficiency) keep growing, while others shrink their size.
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Determinants of the Moscow region corporate farms dynamic efficiency are studied by the instrumentality of the dynamic DEA model from (166), which was re-estimated after fixing the identified data errors. The studied period is 1996-2004. The major limitation of dynamic efficiency was proved to be sources of production costs financing in 1996 and lack of labour later on, in contrast to a body of studies which argue labour-abundance of Russian corporate farms. The expected effect of increased labour supply is the greatest in the least efficient corporate farms (in terms of dynamic efficiency).
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It is proposed to use Markovitz model to distribute investment resources between portfolio investments and projects.
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178.

Testing impact of return to scale on the efficiency of agricultural production

abst.

Nikonov lectures-2008: The role of innovations in development of agro-industrial complex. Moscow: VIAPI; Enciklopediia rossiiskikh dereven', 2008. – p. 252-254.

6

Sergei A. Kudriashov

Methodology developed in (166) is used to demonstrate insignificance of returns to scale for the economic efficiency of corporate farms in Moscow region. Scale effects are significant only for the technical efficiency in a short run, which plays a minor role in overall capabilities of improving economic efficiency.
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 The results of approving the approach described in (74) are reported.  The application is developing annual production programme for JSC Agrofirma Fediukovo in Podolsk rayon of Moscow oblast.
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Opportunities are discovered that contribute into improving competitiveness of agro-industrial sector of Russian economy by means of state support of investment risk hedging combined with diversification of investments.
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Abstract of  (191) (published separately).
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See (190) for description.
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The study is similar to (191). An important difference is that allocatively efficient farms are excluded from analysis of internal transaction costs (ITC). Allocative efficiency and ITC are shown to correlate negatively.
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A set of dynamic DEA models is applied to investigate the determinants of farm size of Moscow oblast corporate farms in the period 1996-2004. New institutional economics is found to be more relevant to explaining farm sizes and their changes than the neo-classical framework. The results prove the hypothesis that the development of farm size is mainly caused by reducing transaction costs associated with getting access to product markets.
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Annotation of the presentation (208) at Shatalin seminar.
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A shortened version of (193) presented at Nikonov lectures-2009.
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The methodology of measuring internal transaction costs (ITC) is enriched with using arctangential averaging of ITC throughout a sample. The calculations are performed for 1998 and 2005-2007. The hypotheses are supported that the evolution of fams' internal institutions slowed down since 2005 and that ITC per unit of a major output positively correlate to farm sizes.
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A journal version of  (191).
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The paper presents the earliest findings in the methodology and estimations of internal transaction costs by means of the micro-economic DEA model. These results were further elaborated in (193) è (198).
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A shorter version of (198). In comparison to (198), the description of the theoretical model is omitted, the reasoning of conclusions is extended.
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A system dynamics model is developed that allows for retirement of assets after bankruptcies. The aim of the model is to select hypotheses about influence of assets' retirement on economic growth and inflation under restrictive monetary policies. The core of the model consists of relations between mean profitability (variance is fixed) and increment of money in turnover; between credit issue and economic growth; between profitability and bankruptcy.
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The paper develops a microeconomic methodological framework that allows approaching subsidy allocation across the types of assets and impact of subsidies on agricultural outputs and profits. The methodology is based on a non-parametric production frontier estimation. The empirical application is made to 1084 Belarusian corporate farms. The results suggest targeting governmental support at grain and milk production. In this case, 4.14 trillion Belarusian roubles of subsidies increase the overall profit of the sample farms by 1.46 trillion. In the case of targeting, the farms with higher overall efficiency are more sensitive to the support and are able to absorb larger amount of subsidies. The opposite is true in the absence of targeting.
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The estimates of internal transaction costs (ITC) using data of 1998 and 2005…2007 from Moscow oblast corporate farms are presented. Compared to (198), several minor bugs are found and fixed in calculations. Both theoretical and empirical models are revised so to make them simpler and implying conditions for stronger estimates. Absence of significantly positive institutional changes is supported, whereas in short run (2005-2009) there is an evidence of negative changes. It is confirmed that larger farms face larger ITC. The influence of ITC on allocative efficiency is found negative, except 1998 when the results are indefinite. Higher technical efficiency implies higher ITC.
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A journal version of  (212).
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Mathematical models that are used in food security studies are reviewed. The methodologies are suggested applicable to unsolved problems related to food security, such as estimation of comparative competitiveness of a national agricultural sector, forecasting of production and consumption balance of food resources, modeling relations between food supplying branches and other sectors of national economy, modeling international food and agricultural resources exchange, development of ecology-economic models, modeling optimal governmental support. 
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A brief report on a method of reproducing institutional evolution by means of a simple system dynamics model. The regimes are found in which institutions can co-exist that generate different transaction costs burdens depending on economic activity scale.
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The paper delivers the results of (212) to Belarusian and Russian readers.
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The system dynamics model of growing economy consisting of several populations characterized by the population-specific dependence of transaction costs and social inequality on economic activity scale indicators is studied. It is found that such model reproduces basic characteristics of competition between different institutional settings, like co-existence of different settings (particularly, infinitely long existence of settings which are ‘strictly worse’ than their competitors), faster growth of ‘the worst’ setting in the short-term period, break-even (catastrophical) population changes of settings.
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ДFor the purpose of understanding the nature of Kondratiev waves it is suggested to represent the long-term dynamics of gross production as a random value, which is a sum of four independent components: purely random, trend, effect of the lagged values and regulation.
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The paper presents the experience of developing a stochastic two-stage model of one-year production program of a dairy corporate farm located in the Moscow oblast, which secures feasibility of the plan under weather conditions of two worst years actually observed.
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A mathematical model of optimal debt service of a corporate farm is proposed allowing for re-financing the debt. Simulations on this model make it possible to estimate probability of insolvency.
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A set of routines is developed for decision support systems in the area of state budget financing of activities, which are aimed at improving competitiveness of agro-industrial complex in financial markets via reducing investment risks. Estimated  the parameters of the state support for a set of projects recommended for implementation in the Krasnodar region.
Access: on-line, PDF document of the journal site (in Russian). UDC 330.45:336.648.8.

An econometric model is developed and econometrically justified that explains long waves of economic conjuncture, which show up in total yields of grain on the territory of the former USSR, with presence of lagged negative feedback in making investment decisions.
Access: on-line, PDF document (in Russian). UDC [338.12.015+338.12.017]:633.1:330.46.

Non-parametric production frontier models of Russian corporate farms, family farms and household plots are developed using regional (oblast) level data. Price growth is found to stimulate production on household plots to a larger extent than on corporate farms. Soaring grain prices are able to cause decreasing production of other agricultural outputs. Additional input of mineral fertilizers, compared to fixed assets, stimulates larger capital value growth on corporate farms (per rouble of input). Family farms are the best place to capitalize agricultural land, while corporate farms demonstrate advantages in capitalizing cattle.
Because of numerous publisher's flaws, please use the author's version of the paper rather than the published one. Thank you.
Access: on-line, PDF document (in Russian). UDC 338.43.001:631.15:658.589.

The methodology of simulation of variational series of NPV and IRR distribution attributed to the group of projects exposed to the same risk influence is developed. The results allow making decisions on investments, forms and
amounts of government support of investment risk depreciation in agro-industrial complex.
Access: on-line, PDF document (in Russian, on the journal site). UDK 330.45:336.648.8.

The article follows earlier publications [253, 261]. It is suggested to predict the investor's reaction on state support using G. Markowitz model enriched with real project share variables. The data for this modified Markowitz model are generated by the simulation model of the cash flows of interrelated projects.
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The possibility of computer simulations application is argued to satisfying the information demand of investment portfolio risk analysis in the cases when real projects shares are included in the portfolio. The necessary data set, characterizing the projects risk, is made available by the simulation cash flow model, which generates variational series of each project's NPV and IRR.  The empirical base of the model consists of the project feasibility study materials, data on project-specific prices variation and aggregated price indices. The instrumental methods, based on the proposed model, allow making decisions about capital investment as well as about forms and amount of state support aimed at improving investment attractiveness of the agro-industrial complex.
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By means of a set of non-parametric production frontier models competitive advantages of family farms on Russian agricultural land market are revealed, while corporate farms experience advantages on herd market.
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The monograph studies the case of scientific substantiation of such a middle-term plan of investment, financial and operational activities of a corporate farm that ensures low sensitivity to risks and uncertainties. For this purpose, a new approach to agricultural producers' operations research is introduced that is applicable in the situation of scarce input data. This approach is based on a multi-stage linear programming model, which makes use of the empirical distribution of probabilities of uncertain parameters (so called ED-model). The solution of the ED-model is an optimal program which remains feasible under any random conditions taken from the set of the conditions that have been actually observed in a given set of years in the past. The model runs under a limited number of scenarios, which are represented by the parameters for which the empirical distribution is not accessible. The overall approach ensures better control over risk and uncertainty factors in comparison to other approaches that could be implemented subject to the available input data.
Access: on-line, chargeable (in Russian). Restricted access (some browsers are not supported). UDC 65.012.122:631.152.2.

The possibility of computer simulations application is argued to satisfying the information demand of investment portfolio risk analysis in the cases when the shares of interrelated real investment projects are included in the portfolio. A complex of cash flow simulation model and portfolio simulation model is developed that makes it possible to approach statistic characteristics of economic effect of investment projects and estimate expectation value of investments in real projects in the presence of governmental support. The empirical base of the model consists of the project feasibility study materials, data on project-specific prices variation and aggregated price indices. The instrumental methods, based on the proposed model, allow making decisions about capital investment as well as about forms and amount of state support aimed at improving investment attractiveness of the agro-industrial complex.
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The author's methodology of econometric estimation of managerial transaction costs (MTC) per unit of output is applied to testing the following hypotheses: about non-decreasing МТС during the periods 1998 to 2007 and 2005 to 2007; about their positive correlation with farm size and with technical efficiency; about their negative correlation with allocative inefficiency. None of these hypotheses are rejected. The evidence of regressive evolution of internal farm institutions during the period 2005-2007 is found. MTC downgrade the competitiveness of the studied farms. However, large potential of decreasing MTC can be found in relatively small number of farms, thus implying limited economic motivation to restructuring aimed at cutting MTC down.
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A summary of the presentation (326).
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Expected changes are outlined in the agricultural markets of the three originating members of the Eurasian Economic Space (Belarus, Kazakhstan and Russia) in the case of adoption a unified agricultural policy. These results are obtained from a partial equilibrium model of these markets based on the code of EPACIS project.
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Experience of practical application of stochastic multistage ED-models (empirical distribution models) is discussed. ED-models are found to be less demanding to source data, less expensive in use and secure a higher level of risk protection in comparison to available alternatives.
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For the purpose of the model presented in the paper (315), investment as a proxy for the aggregated resource and linear combination of population and GNP as a proxy for needs are tried. The results do not surpass those obtained with GNP as a proxy for the resource and population as a proxy for needs.
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Advantages of maximum entropy estimation are outlined in the context of econometric modeling of infratrajectories.
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A disequilibrium theoretical model of long-term economic dynamics, which considers availability of an aggregated resource and satisfaction of needs in specific outputs, is tested against the expansion of surface transportation networks. The 1871–2013 time series of the length of the USA railroads, highways, pawed roads, surfaced roads and total automobile roads, some of which lack numerous observations, are used for the empirical testing. Two incomplete non-linear auto-regression empirical specifications are applied, which differ in the lag duration (one year and 13 years). The both are estimated using generalized maximum entropy (GME) procedure, which is enriched with the endogenous supporting values for the parameter estimates. For the purpose of testing null hypotheses a non-parametric criterion of statistical indiscriminability of two series (reference and compared) is developed, using an area of intersect of polygons of empirical distributions as a critical value. The empirical specification assuming one year lag supports the proposed theoretical model. The parameter estimates do not support the influence of Schumpeterian technological structure changes on the extension of the transportation networks. The possible reason is the fixed correspondence between a given type of the network and a certain technical structure, which is assumed by the empirical specification. The specification with the 13 year lag is rejected, thus giving no evidence for the significance of the investment lag for the transportation network expansion processes.
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The paper presents the economic and mathematical analysis of the likely consequences of the transition to a single agri-food policy in the three countries EAEC - Belarus, Kazakhstan and Russia. Use any copyrighted modification of economic-mathematical model of partial equilibrium EPACIS, which eliminates the drawbacks associated with alternative solutions and computational problems. The expediency of a conservative approach to integration processes in the EAEC, consisting in the integration of primary markets, the integration of the least prone to stress; the priority of improving the competitiveness of inefficient sectors to the integration of markets; ready to suspend the acts aimed at deepening integration, the detection of adverse effects.
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A mathematical model for modeling agricultural and food policy in the core countries of Eurasian Economic Union (EAEU), namely Belarus, Kazakhstan and Russia, is developed on the basis of earlier EPACIS project, which originates in Leibniz Institute of Agricultural Development in Transition Economies (IAMO). Workarounds are provided for some imperfections of the original model that expose themselves during simulations that allow for bilateral international trade, namely presence of multiple equilibrium solutions, large systematic bias and occasional computational problems. The model outcome is analyzed for the scenario of equal average subsidies per unit of each output in the three countries (separate for direct subsidies, input subsidies and the support of agriculture besides subsidizing producers). The scenario assumes securing the gross amount of subsidies of each type across the three countries, allowing their burden to be redistributed from one country to another. The major scenario effects are the growth of foreign trade turnover in all three countries (e.g. Russia's import from two other countries grows by 3,3% and from the rest of the world by 4,5%, while its export grows by 6,8 and 13,2% correspondingly) and growth of state support of agriculture in Kazakhstan by 62,6%. Hence, international traders will promote this scenario, while the government of Kazakhstan will tend to hamper it. Other actors, including consumers and producers in all the three countries and governments of Belarus and Russia receive marginal effects. On this reason, they will stay neutral thereupon the scenario is about to be implemented. 
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For the purpose of verification of a disequilibrium theoretical model of traffic networks expansion considering availability of an aggregated resource and consumption of traffic services, an incomplete (in terms of factors taken into account) non-linear autoregressive econometric model of motor and rail road lengths is developed for the period 1871-2013 (the data on motor roads are available from 1904 on). Parameters of the model are estimated by means of the general maximum entropy (GME) estimator. The results fit into the theoretical model. An investment lag and a technological structure are both found insignificant.
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The paper is aimed at the development and application of a computer toolset for the systems analysis applied to the Russian grain markets. The systems analysis problem is set as elaboration of the cause-and-effect relations in the wheat market. Solving it is particularly necessary in order to correctly set the borders of the price corridor for the purpose of commodity and purchase interventions.
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The study develops a finite difference dynamic simulation model of the Russian market of wheat for the purpose of agricultural policy analysis. The distinctive feature of the model is that it does not simulate prices in the absence of an active policy, taking the historical prices as input data instead. Another distinction is a parameter of market perfection, which can vary from zero (absolutely fragmented market) to one (the perfect market). The paper reports three cases of state policy applicable to the grain market: first, purchase and commodity interventions that are exercised outside a fixed price corridor; second is similar to the first but the price corridor is allowed to vary once a year depending on the market conjuncture; third is the producers' price loss coverage with a fixed reference price. It is demonstrated that the strictly defined rules of intervention allow decreasing variation coefficient of wheat price by 1 to 2.5 per cent points in comparison to the historic monthly data of years 2007-2015. The interventions are ineffective as means of income support for producers and cost control for households. The price loss coverage, although generating larger costs for the state budget, secures the incomes of grain producers at the cost of failing to protect consumers from excessively high prices and to make the prices of wheat more predictable for investors.
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A simplistic mathematical model is introduced that links the salary of researches engaged in industry to the accumulated amount of scientific knowledge, while the salaries of scientists and professors do not depend on this factor. The model demonstrates the threat of cyclic trajectories such that part of the previously accumulated knowledge can be lost periodically as a consequence of excess motivation for the researchers to occupy positions in industry instead of researcher or professor positions.
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A methodology is developed that uses a non-parametric stochastic frontier in order to analyze opportunities of productive use of abandoned agricultural lands. It is shown that in Russia, providing conditions for production growth, it is more profitable to expand sown areas than to increase productivity of the currently used agricultural lands, but the possible scale of expansion is far less than the previously abandoned areas.
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A methodology is developed that uses a non-parametric stochastic frontier in order to analyze opportunities of productive use of abandoned agricultural lands. It is shown that in Russia, providing conditions for production growth, it is more profitable to expand sown areas than to increase productivity of the currently used agricultural lands, but the possible scale of expansion is far less than the previously abandoned areas.
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The structure of the model of location of Russian agricultural production is presented. The model relies on the non-parametric representation of regional production frontiers and non-parametric probability distribution of random conditions.
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The hypothesis is tested about the homogeneity of influence of factors (aggregated resource and the demand for transportation) on the expansion of surface transportation networks in the USA. The hypothesis is not rejected.
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Using the mathematical model based on the non-parametric production frontier of Russian agriculture, this study estimates the area of unused agricultural lands that could be involved in cultivation subject to different assumptions on drivers of agricultural production growth. The contradiction is revealed between the strategies aimed at capitalization of agricultural lands and their re-cultivation.
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© N. Svetlov, 2006-2018.
February 24, 2018.