Strength and Weakness of PAM

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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.