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Brief Description for the BrazilianLand Use Model - BLUM
In response to the World Bank’s interest in studying different scenarios in order to evaluate green house gas emissions for different Brazilian sectors, named “Low Carbon Study for Brazil”, the ICONE (Institute for International Trade Negotiations) in partnership with the FAPRI-CARD (Food and Agricultural Policy Research Institute – Center for Agricultural and Rural Development) developed an economic model named Brazilian Land Use Model (BLUM). The model aims to analyze and project the dynamics of the main agricultural sectors in Brazil, for a time period of 10 years.
BLUM comprises the following products: soybeans, corn (first and second crop), cotton, rice, dry beans (first and second crop), sugarcane, dairy and livestock sectors (beef, broiler, eggs and swine). Commercial forests will be considered in the model as a next step and it is now considered as exogenous projections.
For this analysis, Brazil was divided in six regions, as shown in Figure 1: South (states of Paraná, Santa Catarina, Rio Grande do Sul), Southeast (states of São Paulo, Rio de Janeiro, Espírito Santo, Minas Gerais), Center-West Cerrado (states of Mato Grosso do Sul, Goiás and part of the state of Mato Grosso inside the biomes Cerrado and Pantanal), North Amazon (part of the state of Mato Grosso inside the Amazon biome, Amazonas, Pará, Acre, Amapá, Rondônia, Roraima), MAPITO and Bahia (Maranhão, Piauí, Tocantins, Bahia), Northeast (Alagoas, Ceará, Paraíba, Pernambuco, Rio Grande do Norte, Sergipe)[1].
Figure 1 – Map of the Brazilian Land Use Model – BLUM regions
Source: Basead on the Instituto Brasileiro de Geografia e Estatística – IBGE.
Elaboration: ICONE and UFMG.
The BLUM is a one-country, multi-regional partial equilibrium economic model and comprises two general sections: supply and demand and land use. In the first section, the demand is projected in a national level and is formed by domestic demand, net trade (exports minus imports) and ending stocks (which is not considered for dairy and livestock sectors). It responds to prices and to exogenous variables as GDP, population and exchange rate. The supply includes national production (which is regionally projected) and beginning stocks (again considered only for grains, sugarcane and its sub-products [2]). It responds to each commodity’s profitability, which depends on costs and prices of each product.
The equilibrium in the BLUM is obtained solving a vector of prices which leads to supply and demand being equal. The interaction is maintained until the simultaneous equilibrium in all markets occur, for each projected year.
The land use section is divided in two effects: scale and competition. Scale effect is the result of regional equations in which the dependent variable is the share of the area used for agriculture in relation to the total available and suitable area to agriculture. The above mentioned was estimated by Geographical Information Systems. The competition effect is determined by equations that generate land allocated to each crop and pasture in each region as a function of its own and cross profitabilities. The land allocated and yield trends result in the total production of each product in each region. In addition to beginning stocks correspond to the total national supply of the product. This relationship between land allocated and production guarantees the interaction between both sections land use and supply and demand in the model.
Besides the competition for land, there are interactions among the analyzed sectors, as well as among one product and its sub-products. For example, the interaction between the grains and the livestock sectors is the feed consumption (basically corn and soybean meal) that is generated by the supply of meat, dairy and egg production and is one component of the domestic demand of corn and soybeans. In the case of soybean complex, soybean meal and soybean oil are components of the domestic demand for soybeans and are determined by its crush demand. Similarly, ethanol and sugar are the components of sugarcane demand.
The methodological diagram below, Figure 2, summarizes the dynamic of the BLUM.
Figure 2 – Methodological diagram of the Brazilian Land Use Model - BLUM
Elaboration: ICONE
Main Applications
The BLUM can be used as an important tool to assess the dynamics of different land occupation in different regions in Brazil. Thus, it can contribute to decision-making in the public and private sectors, helping long-term planning for the country. The use of different exogenous variables, such as macroeconomic or technological ones, can generate alternative scenarios for land use and agricultural production.
Once BLUM generates land use change data over a ten-year period, it can also be very useful to analyze land use change caused by an expansion of a certain crop or product. The model simulates demand shocks for a product, such as sugarcane ethanol, and thus analyze how the other crops and pasture will react.
Since the model results in land allocation data in the six previously mentioned regions, and due to the fact that each region contains a predominant biome, the type of natural vegetation converted to agriculture can be determined. This means that, if the agricultural expansion results in the conversion of natural vegetation, the model will be able to project which type of vegetation will be displaced. This is an important step forward compared to global land use models. Further, the disaggregation of the regions on smaller scales can improve the accuracy of the GHG emissions calculations.
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