Step 5
Step 5: Valuing effects of the technology from a farmer's point of view
Once the data series for on-site effects are prepared (step 4) and PESERA output data are available (step 2), the effects can be priced (for input costs this has already been done in step 4). Although most effects are expected to be regarded as benefits, some costs may result as well. A common cost is for example the reduction of cultivable area that results from many structural measures. The most straightforward benefit would be a yield increase, which could be valued at the local market price for the crop grown. If the technology implies a land use change, the gross benefit consists of the difference between the crop return in the with/without situation. Besides valuing the outputs of the PESERA model, a farmer may value effects of the technology that are not considered in the model. In the WB3 workshops, indicators were suggested by stakeholders that are not simulated by the PESERA model. These (local) indicators should where possible be valued separately and added to the benefits that are derived from the PESERA model. Also, the effect of policies need to be taken into account (possible scenarios can be fed back to this step from step 12).
Data sources: 1) Data series for on-site effects for the time horizon for all pairs of with/without situations (step 4); 2) valuation of local indicators (optional); 3) data on policies affecting the farmer valuation (subsidies).
Intermediate product: annual cashflow series for farm finances (Figure 3.5)