An Application of System Dynamics to the Research on
the Strategy of Rural Development in Heilongjiang Province
Zhao Wen—Huang Wang Hong-Bin Gu Lin—Ming
Rural Development Research Center of
Heilongjiang Provincial Government
27,Xuanxin Street,Harbin 150001,P.R.China.
ABSTRACT
By means of a study in the application of System Dynamics theory and approach,a quantitative
analysis on the coordinative development of the main agricultural productions in Heilongjiang
Province is made, constructing a simulation model of system dynamics which is composed of
farming,forestry,animal husbandry fishery,land resoures and population.
The relationships between the various productions mentioned above, as well as between the inter-
nal variables within each production are correctly described in the model.Simulation analyses on
the relationships between various productions and between the internal variables within each pro-
duction,by using the model,are made and,at the same time,many programs which have advantages
for the coordinative development of various productions result from these analyses.
1, INTRODUCTION
In researching the rural development strategy in 1987,Heilongjiang Provincial Government con-
structed a model for researching the coordinative development of the main agricultural produc-
tions in Heilongjiang Province by applying system dynamics theory and approach. The model is
fundamentally based on the follwing ideas:
1.1 The key to the rural development,in terms of the actual situation in Heilongjiang Province,is
tural economy and the dev¢élopment of rural economy is depended on agricultural
productions,which, therefore, must be placed on the basic strategic position from now on.All the
indices concerning agriculture development should be studied by using the method of combining
qualitative analysis and quantitative research.
1.2. Agricultural production,which is a combination of natural reproduction and economic re-
production,is a giant and complex system. So factors affecting and restricting production devel-
opment are numerous and relationships interacting each other are complicated. Therefore system
dynamics theory and approach must be used to understand them and to find out ways to deal with
them,so as to achieve an overall consideration,comprehensive analysis,complete understanding of
primary and secondary and scientific rationalization.
1.3 In time of reforming at home and market-changing abroad,the modifications of
policies,which have great influences on agriculture development,can not be avoided.In order to be
fit to the changable situation,it is necessary for us to construct a model by applying system dynam-
ics approach and to make a quick policy analysis according to the behavious of the model.This
can enable Policy—designers to make quick reactions and revise the policy quickly.
1.4 In our researches on the developing strategy,comparisions between different programs were
made to define many important indices. Being one part of a decision support system,the system
dynamics model can make it puicker for system analysts to find out and identify a better program
among numerous suggestions.As a result,it can provide dependable bases for the provincial gov-
ernment to make correct desisions.
The goal of our research is to understand the current situation, structure and coordinative rela-
471
tionships of various agricultural produtions in Heilongjiang povince better,by establishing a re-
search model of coordinative development of the main agricultural production so that we can pre-
dict the developing trends of different productions and their effects on the whole production and
can find out the reasonable production structures and serve as a scientific basis for designing pro-
duction policies and development strategies with the help of computer simulation analysis com-
paring different policies and strategies.
2. SIMULATION MODEL AND ITS STRUCTURE
The coordinative development model of the main agricultural production contains six submodels
which are farming,forestry,animal husbandry, fishrey,land resoures and population.The interact-
ing relationships among these submodels are very complicated. The land resourse is the most im-
portant factor which determines the developing of other production; population is the sourse of
labours and the consumers of material products,so the changes of population can influence
directly the development of various productions.The relationships among these submodels and
variables within each submodel have extremely important influence with the development of agri-
cultural production.The fundamental structure of the specified internal and external relationships
in this systematic modle are given in Figure 1.Figure 1 shows that each part in the system was its
own principle and,at the same time,different parts also act and restrict each other.This restricting
relationships can be seen in the following aspects:
2.1 In case of limited land resource,all types of land area can not extend arbitarily. Therefore,the
formation of each type of land area has its own rational numerial value.
2.2 When there is a limited area of land to be use,the output of all kinds of crops,the growing
stock of forest,and the output of livestock and fish products can also be increased by improving
the intensive management.
2.3 The developing of animal husbandry and fishery requires a great increasing of fodder,since a
balance between supply and demand is a fundamental condition for the developing of these two
productions.In addition,animal hasbandry is the main source of organic fertilizer and its devel-
oping can make soil fertility enhancement so as to increase the outputs of crops.
24 The existance of human requirs a great deal of farming, animal husbandy and wood prod-
ucts,on the other band,the requiment can further give an impetus to these productions.
2.5 In order to keep the system running properly,the supplies and demands of all the products
must be in the state of dynamic equilibrium.
When the interacting relationships described above are specified,the causal relationship diagrams
and system flow diagrams can be drawn and consequently the equiations, which express the sys-
tem in detail,can be established. In this paper,only one submodel showing the increasing varia-
tions of dairy cattle in the animal husbandry subsystem is described which serves as a example to
illustrate the idea of establishing the model.The flow diagram showing the variations of amount of
dairy cattle is given in Fiqure 2. The amount of dairy cattle on hand in the Figure 2 is level varia-
bles. The equations for it are given below:
WL X2.K=X2.J+DT * (X21.Jk-X22.JK)
X2 in the equation is the amount of dairy cattle on hand;X21 is the increasing rate of dairy
cattle;X22 represents the decreasing rate of dairy cattle. The equation for calculating X21 is
2R X21.KL=X2K * 0.62 * 0.35 * PCX2.K+GX21.K
X2 in the equation 2 is the amount of dairy cattle on hand at the end of the year;0.62 is the ratio of
calver;0.35 is the ratio of female calves born;and PCX2 is the controlling coefficient.The product
472
Gauvaiea Farming Output of all kinds
ea Material input of grains Output value +4
| ae i t
Output of
Grassland fodder grass
g Grass Material input Output value fy |
3 ¥
3 4
E a! 3
a 3
a
= ‘Animal Output of 2
‘a husbandry . livestock products £
e Material input Output value t+] |g
z 3
g ik =
5 g
a Fishery Output of fish z
4 Water area of T Material input Output value t-| bod
5 fishing 3
fa t i! a
.
a
Output of
Forestry
forest products
Land for forestry Material input ls Output value
production
c mi
‘Adjusting factor Ratio of supply ‘Total output value
and demand
L] T
Population Other requirements Other investments [=] _Invested funds "Vynputted amount
Figure 1 Diagram of Structure Relations of System Model
473
demand Gach head ~~ =
Mox2 PX2
de-mand of
energy fodder
by dairy
Be aa ATT ee
ratio of femal0S~_ ~\
demand of
coarse fodder
bydairy cattle,
demand of
protein fodder
by dairy
controlling
coefficient
se te en \
i PCOSR ratio of calves born
pressure calyer
/ coefficient a
GX21
S x2 © amount of
{ sco amount of dairy upgrading / | ratio of calver
supply of cattle on hand of crossbreed
f .
| fodder
b— Coa ee | |
X3
| amount of N demand of Aa |
\ crossbreed X32 protein fodder
y of . i
\ atte ‘C \ cattle on hand | laecreasing |
demand of
protein
fodder
fodder
COx3
demand of
pressure
coefficient
crx Le
demand of ae ~ oe SSe eT,,
energy —a F
fodder J- —- —- Hee ee HH HY
Figure 2, Submodel of dairy cattle
414
multiplied by these variables is the amount of dairy cattle self—breed.GX21 represents the number
of upgrading crossbreed cattle caused by crossbreeding. The equiation for GX21 is
3A GX21.K=X3.K * HX3.K * M3.K * 0.43
X3 in equiation 3 represents the amount of crossbreed cattle on hand;MX3 is the ratio of calver of
crossbreed cattle; 0.43 is the breeding rate;HX3 is the ratio of upgrading.X22 in equation 1 is the
decreasing rate of dairy cattle. The calculating equation is given b-low.
4R X22.KL=X2.K / (CX2.K * PCX2.K)
CX2 in equation 4 is the ordinary time—length over Which the cattle are kept on hand,while PCX2
is the controlling coefficient related to the relationship of fodder supply and demand.The supply
and demand relationship of the three kinds of fodder is expressed by the ratio of available amount
of supply and demand.when the amount of supply is more than that of demand,the ratio is over
1;when supply and demand is in balance,the ratio is equal to 1;and when supply is less than de-
mand, the ratio is below 1. In fact,ratios of supply and demand relationsheps of the three kinds of
fodder can not be equal under existing conditions.It is the short supply relation of supply
anddemand that,in practice,restricts the number growth of dairy cattle. Therefore, MINX, which is
the minimum value of the three kinds of supply and demand ratio mentioned above is used to de-
termine the value of PCX2.The possible relation between PCX2 and MINX is expressed with the
following equation.
SA PCX2.K = TABHL(TPCX2,MINX - K,0,1.2,0.2)
6T = TPCX2=0.2/0.2/0.4/0.6/0.8/1/1
This equation,together with the equations of dairy cattle increasing and decreasing rate,shows that
when the fodder supply fails to meet demand, it will restrict the increasing of dairy cattle;while the
development of dairy cattle production mainly depands on the breeding capacity of cattle when
fodder supply exceeds demand. However,there are also,in reality,other types of relationships be-
tween PCX2 and MINX.These different relationships are representatives of different controlling
polices on the developing of dairy cattle produetion.In addition to the restriction caused by fodder
supply and demand,the capacity for processing fresh milk is also considered as a controlling factor
on the developing of dairy cattle in this model.Being located in the zone suitable for dairy cattle
life in the world,Heilongjiang Province possesses many advantages for dairy cattle production so
that it can provide milk product all over the country and export milk product to other
countrries.Therefore,the milk processing capacity in the model is assumed to be a productive force
which can be raised in pace with the growing of dairy cattle production.The fresh milk processing
capacity in Heilongjiang Province at present is larger than the output of fresh milk.
3 SIMULATION ANALYSIS
Based on the analyses and establishments of various submodels,a complete research model for
coordinatuve development of the main agricultural production in Heilongjiang Procince can be
constructed by combining,organically,the submodels. The model was tested before policy
simulations or strategy simulations.The results show that this model is suitable for policy
simulation or developing strategy simulation.
During the simulation analyses,we focus on the production subsystem, as well as the possible de-
veloping trends and interrelations between submodels in case of using different developing strate-
gies and policies. By simulating and analyzing the developing strategies and policies,we considered
several programs.The results of these programs are given below briefly.
3.1 A program speeding up the developing of animal husbandry by increasing material inputin
farming and ensuring export of grain.
This program is one of the coordinative development of farming and animal husbandry.It requires
475
that the amount of chemical fertilizer input,which will increase to 1.7 million tons(net measure),
should be tripled that of 1983 by 2000 and the investment for building grassland after 1990 should
be keeping in 180 million yuan(RMB).The secded area of soybean will increase to 2.275 million
hectare.Some of the condition parameters are given in Table 1 and the main data of simulation re-
sults can be scen in Table 2.
Table 1 condition parameters
items, Chemical | Seeded | MV°S™M*") Export | Export
s as for million
nits fertilizer area amount amount
man-made 3
ears, (net measure) | of soybean of soybean | of grain.
grassland.
10000 10000 millon million million
tons hectare yuan kilogram kilogram
1990 110 227.5 180 2000 2000
1995 130 227.5 180 2000 2500
2000 170 227.5 180 2000
3.2. A program specding up the developmlnf of animel husbandry by reducing gradually the cx-
ported soybean by 0.5 billion kilogram after 1993.
This program is a better coordinative development of farming and animal husbandry
production.It requires that 0.5 billion kilogram of soybean to be exported should be cut down and
the investment for grassland building should be speeded up.The result of simulations are given in
Table 3.
The first program stresses on the increasing of chemical fertilizer input,the enlarging of the seeded
area of soybean and the extending of the man—made grassland,so as to increase the outpul of
grain and soybean to 24.25 billion kilogram by 2000.In other words,Ensuring the grain consump-
tion by people and industry,the first program can maintain 2 billion kilogram soybean to be ex-
ported,supply 3 billion kilogram commodity grain and increase slightly the fodder for anima! hus-
bandry.After providing meat,cgg and fur,this program can ‘speed up somewhat the dairy cattle
production (1.168 million head of cattle by 2000). However,a potential of increasing still
exists.Based on the first program, the sccond program suggested reducing 0.5 billion kilogram of
soybean in export and 0.5 billion kilogram of commodity grain by the end of 2000. On one
hand,the program can mect the demands of meat,cgg and fur,on the other hand,the dairy cattle
production can expand a great deal and the amount of dairy cattle on hand can amount to.2.578
million by 2000. caused by the repid development of animal husbandry,the total output value of
the farming and animal husbandry can be 2.1 billion yuan more than that of the first program,and
the yield of grain,soybean and potato can an increase by 0.4 billion kilogram over the first
program.In addition,the reducing of organic matter in soil can be slowed down,
In the coordinative dvclopment program,the coordinative developments of forestry and fishery
are dealt with separatly and both of the results are satisfactory.
4 CONCLUSION
Of these two simulated programs,we prefer the second one.The second program requires that the
476
Table 2 Index table of main prodctions,economic benefit and equilibrium parameters
ears Year
Units 1990 | 1995 | 2000 init 1900 | 1995 | 2000
[tems (tems
Frotal output off ion [Equilibrium o j
Brains,soybean|, 19920 | 21850 | 24250 egg supply and) % 79.4 | 90.7 | 94.5
‘ilogram
and potato demand
Output value... anes
pf farming, "HO" | 13030 | 14si0 | 16130 Fauuosium of 9 | gg.s | 90.9 | 923
production m IE DEOSSSSINg
Output value) million [nvestment for ion
pf animal hus- 3481 | 4650 | 5650 milk processing 63 79 101
yuan yuan
bandry each year
: ile
eel ‘and milion Poulter 2
. 16510 | 19160 | 21780 wool supply, % | 101.7 | 97.1 | 101.4
animal yuan
and demand
hushandry
Equilibrium o: Equilibrium o!
meat — suppl: % 114.9 | 115.6 | 110.1 pork supply % 101.3 | 105.1 | 99.4
and demand and demand
FPrport off million | 2000 | 2000 | 2000 !
soybean {kilogram |
H
Table3 Index table of the
main production,economicbenefit and
equilibrium parameters
eaeh year
ear Year
Unit 1990 | 1995 | 2000 | unit 1900 | 1995 | 2000
tems [tems
[Total output ot ans F _
rain soybean], “ion | 9949 | 21gg0 | 24150 PUPYE valuejmillon | 15549 | 14590 | 16380
kilogram offarming | yuan
and potato
Putput value nintion Eng oxalic
f animal hus| ™" 3590 | 5330 | 7460 Pr vafmins HO! 16630 | 19920 | 23840
yuan animal hus| yuan
bandry
bandry
Equilibrium Equilibrium o
oefficient off % | 115.2] 116.4} 111.9 pork — suplly) % | 101.3 | 105.1 | 99.4
meat and demand
Equilibrium o: i
beg supply and % | 79.4 | 90.7 | 94,5 Common on 10000) 69 0 | e413 | 149
unit head.
demand _
investment for, ‘tli Export é million 1500
bnilk processing) ™""'" | 100 | 199 | 365 [*PO! ilogra| 2000 | 1700
yuan soybean a
477
chemical fertilizer input should amount to 1.7 million tons by 2000 and the exported amount of
soybean should be decreasing from 2 billion kilogram in 1990 to 1.5 billion kilogram in 1995
which should be maintained after 1995,while the total output of soybean keeps growing.As a re-
sult,the output value of animal husbandry can amount to 7.45 billion yuan.
By using system dynamics theory and approach,our research constructed a coordinative develop-
ment model of the main agricultural productions. Using the model,we quantitatively analyses the
relationships of coordinative development from the view points of time and space.This method is
superior to other traditional ways and the research has practical significance in reality.
REFERENCES:
1. Forrester,Jay W.,Industrial Dynamics,MIT Press, 1980.
2. Forrester,Jay W.,Principles of Systems,MIT Press,1980.
3. Hong bin,Wang.,A Enssentis! Course on System Dynamics,HIT (Harbin Institute of Technolo-
gy) Press,1989.
4, Goodman, Michael R.,Study Notes in System Dynamics,MIT Press,1980.
5, Hong—bin,Wang.,The System Dynamics Model for Policy Analysis of the Forest Industry Sys-
tem,Proceedings of the 1987 International Conference of the System Dynamics Society.
THE DYNAMIC RELATIONSHIP BETWEEN
TRANSPORTATION AND OTHER INDUSTRIES IN CHINA
Manlin Yang
Fudan University
Shanghai ,China
ABSTRACT
This paper analyses the dynamic relationship between transportation
and other industries with system dynamics theory and method. We
develop a system dynamics model to protray how the transportability
influences other indistries, and have made some computer simulation
in which we simulated the dynamic characteristics of the system at
different alternatives of investment.
In the simulation, we properly reduced the investment in heavy
industry and increase the investment in transportation, while the
total amount of the investment is the same. The output value of heavy
industry didn't decrease, on the contrary, it increased. At the same
time, the output value of other industries and national income
increased too, This indicates that the transportability directly
influences the output value of other industries.
From the simulation result we also see that the investment in
transportation of China is too small and this leads to the situation
that the development of transportation can't meet the demand of nat-
ional economics in China.
This paper is a application example of how system dynamics is used
to solve problems of social economics. ThiS research will help
people to know the importance of transportation in national economics
and government to make policies.
1. PROBLEM AND PURPOSE
Transportation is a major one basis of national economic, It's very
important in linking production circulation and distribution as well.
For nearly fourty yrars, transportation in China has developed quick-
iy. However it doesn't meet the demand of industrial and agricultural
production and people's life. For a long time transpotation in China
is in a passive state, to which economic development is subject.
There are a lot of objective causes for the passive state of transpo-
rtation in China. But wrong decisions caused by subjective element
are primary. That is, strategy position and precursory affect of tr-
ansportation were not fully realised, systematic and quantitative an-
alysis are seldom used to study the relationship between transporta-
tion and other industries. Therefore the alternative of investment
didn't include improving the transportation first. And it was even
neglected. Especially during the period of fifth and sixth five-year
economic plan, the investment in transportation of China is not suff-
icient at all . Other policies for developing transportation are not
adequate also.
According to the fundamental concept of system engineering—the con-
cept of system and using system dynamics methods,we put transportat-
