This article presents an optimization model for agricultural supply analysis in which the relevant parameters were obtained using a generalized maximum entropy approach that includes exogenous information. This latter feature is very important for cases in which the dataset is relatively poor, but for which a priori information on land allocation elasticities is available. The model includes a description of the use of water resources, and is supplemented with indicators addressing various dimensions of sustainability in agricultural production. This is consistent with the need to assess the likely impact of agricultural policies on the environmental and social dimensions of sustainability.
The model was applied to a specific study area to explore the likely consequences of a recently proposed reform of the Common Agricultural Policy of the European Union. This enabled testing of the applicability of the proposed model to policy analysis, assessment of whether it can be used to explore sustainability issues, and evaluation of its strengths and weaknesses.