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3.6.5. Strength and Weakness of PAM
In summary, the PAM is a simple conceptual framework for organizing information at the microeconomic level to show the effects of policy on financial
profitability and comparative advantage of agricultural systems. It treats government policies explicitly, and can be used to link macroeconomic policies with
microeconomic phenomena. The simplicity of PAM invites both praise and criticism. On one hand, it is
easily understood by non-economists, particularly senior policy makers who have neither the time nor inclination to digest complicated numeric results.
On the other hand, its simplicity is for others confining. A major and valid criticism is that it is static policy formulations do not allow for any supply response
i.e. the way producers change output in response to changes in incentives. Other shortcomings of the PAM are; it is not useful for analyzing products
that are not traded internationally since, by definition there is no world price. In addition, it should applied to countries that make up large share of world
trade, since the world price would not be exogenous and therefore not an efficiency price. However, for the majority of the country product combinations, these
conditions are not relevant.
IV. AREA OF STUDY
4.1. The Study Sites
4.1.1. Physical Characteristics
The two case study villages Senamat and Muara Kuamang are located in Muara Bungo district Jambi province. Jambi which happens to be the provincial
capital is 300 km’s away from them. Topographically the province is characterized by uplands with gently undulating to steep landscape with the altitude ranging from 100
to 500 m above sea level. Jambi experiences, on average, 7-9 wet months 200 mm rainfall and less than 2 dry months 100 mm rainfall per year, with annual rainfall in
the range of 2100-3000 mm and with the average annual temperature of about 26.8° C.
Muara Bungo is geographically located between 101 27’ to 102
30’ East longitude and between 01
08’ to 01 55’ South Latitude. Muara Bungo district
borders Tebo district and Dharmasraya district in the north, Merangin district in the south and Tebo district again in the East, Darmasraya and Kerinci district in the west
with the total land of 371.72 km
2
5.19 of the total area Table 10. The study area contains transmigration sites, rubber plantations, timber
plantations, oil palm plantations, and tree-crop plantations. After the introduction of rubber at the start of the 20
th
century, farmers had an extra incentive to settle near rivers to transport rubber to the markets. Rubber trees were both cultivated by
smallholders and large holders.