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Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub‐Saharan Africa. This study applies stochastic bioeconomic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses the agent‐based simulation package Mathematical Programming‐based Multi‐Agent Systems (MPMAS) to capture nonseparable production and consumption decisions at household level, considering livestock and eucalyptus sales for consumption smoothing, as well as farmer responses to policy interventions. We find the promotion of new maize and wheat varieties to be an effective adaptation option, on average, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policy makers to adhere to interventions that are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.

Voluntary sustainability standards, aimed at improving the environmental, social and economic aspects of agricultural production and trade, are becoming increasingly common. The coffee sector is a prime example, where sustainability certification could improve livelihoods for poor smallholders. However, as individual production volumes are low, smallholder farmers need to cooperate in certification as a group, which makes impact assessment more complicated. Previous empirical studies, reporting premia of up to 30%, have neglected the costs associated with group certification. We explore the issue using an agent-based simulation of coffee producer organisations in Uganda, including the certification-related costs for farmers. Our results suggest that certification can have a small positive impact on participating households. But the added value of certification is substantially lower than the price premium, because of certification costs. Increasing both the membership of the producer groups and their deliveries of certified coffee are necessary to improve the rewards of certification.

The need to balance agricultural production and environmental protection shifted the focus of Brazilian land-use policy toward sustainable agriculture. In 2010, Brazil established preferential credit lines to finance investments into low-carbon integrated agricultural systems of crop, livestock and forestry. This article presents a simulation-based empirical assessment of integrated system adoption in the state of Mato Grosso, where highly mechanized soybean-cotton and soybean-maize doublecrop systems currently prevail. We employ bioeconomic modeling to explicitly capture the heterogeneity of farmlevel costs and benefits of adoption. By parameterizing and validating our simulations with both empirical and experimental data, we evaluate the effectiveness of the ABC Integration credit through indicators such as land-use change, adoption rates and budgetary costs of credit provision. Alternative scenarios reveal that specific credit conditions might speed up the diffusion of low-carbon agricultural systems in Mato Grosso.

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