SUPPLY SIDE OF THE MODEL FOR DUTCH AGRICULTURE

• describing the reactions of the agricultural entrepreneurs to changes 6 in e.g.: prices, crop prospects and government measures;
• to predict the level of the production activities;
• to predict the development of income, savings and investments of the individual entrepreneur.

The model has been set up for the whole of Dutch agriculture and horticulture because we want to describe not only the reactions within the branches (e.g. farms becoming larger or smaller), but also the interactions between the branches of agriculture (e.g. separation of arable and livestock farms, specialization in the horticultural sector under glass).

Because we want to say as much as possible about income, savings, etc. of the individual farm or group of farms, the model starts with describing the behaviour of small groups of farms by means of the representative farm approach, i.e. production, income and investments are determined for groups of farms displaying similar behaviour and investments activities (cells).

All agricultural and horticultural holdings in the Netherlands larger than 60 standard farm units (s.f.u.) have been classified into "homogeneous" cells of this kind. For each cell, a mean, representative farm determines the level of the production and investment activities. Now by multiplying the production of this representative farm by the number of farms represented, we arrive at the production per cell. After a correction for the production of the farms smaller than 60 s.f.u., we arrive at the national level, by simply adding up the production figures per cell (fig. 1).

To apply this approach the following problems have to be taken care of:

1. Forming groups of farms with a similar behaviour to the production and investment activities (cells).
2. Describing the behaviour within such a "homogeneous" cell: how do you determine the level of the production and investment activities?
3. Describing the interactions between the various "homogeneous" cells. Interactions between the cells are for instance:

1. Transitions from the one cell to the other, e.g.:

• transition from arable farms to outdoor vegetable-growing holdings;
• specialization of horticultural holdings under glass in vegetable

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