Hierarchical modeling for the agricultural sector in Greece and bilevel programming

In this article a linear bilevel model is presented, the first level of which concerns the EU and the second level the Greek government as the representative of the Greek agricultural sector. In this problem the EU is the leader who would like to minimize the subsidies it pays for yields and the expenses in terms of products. The agricultural sector is the follower and its objective is to maximize profits by selecting the best mix of crops to grow in terms of the EU regulations. The mathematical problem includes a large scale model. A new cutting-plane methodology is proposed.