Policy Analysis for the Irish Agricultural Sector: The impact of a WTO Agreement on the Irish Agricultural Sector

End of project reportUsing dynamically recursive partial equilibrium models of Irish, EU and World agricultural commodity markets, research undertaken under projects 5158, 5159 and 5160 formed the basis of the empirically based policy analysis that the FAPRI-Ireland aggregate sector modelling team, based at Rural Economy Research Centre (RERC), has provided to Irish and EU agricultural policy makers. Under the three projects (5158, 5159 and 5160), which began in January 2003, numerous analyses of CAP reform proposals and agreements were undertaken. The full details of all of the analysis conducted are given below and are available from the FAPRI-Ireland website www.tnet.teagasc.ie/fapri). In this end of project report the most recent analysis, relating to the possible impact of the still on going Doha Round of WTO negotiations is presented relative to a Baseline under which current agricultural and trade policy is assumed to continue unchanged over a ten year horizon (2006 to 2015)

Projections of forestry as a competitor with mainstream agricultural enterprises and the consequent environmental implications

End of project reportThrough its relationship with the Food and Agricultural Policy Research Institute (FAPRI), staff at the Rural Economy Research Centre (RERC) have developed a system of econometric models of the Irish Agriculture sector. The output from these models includes, amongst other things, projections of agricultural activity levels under different policy options. From an environmental perspective, information on future levels of agricultural activity are important since they can facilitate the calculation of aggregate national levels of emissions of various pollutants from agriculture. The project has also produced a model which makes projections of forestry planting

Impact analysis of the CAP reform on main agricultural commodities

End of project reportThis study has been carried out for the European Commission's Joint Research Centre to analyze agricultural policies at Member State, EU15 and EU25 levels as well as for Bulgaria and Romania. The modelling tool allows for projections and policy analysis (up to a 10 year horizon) for the enlarged EU.This study has been carried out for the European Commission's Joint Research Centre, under Contract no 150267-2005-FIED-N

Potential WTO Trade Reform: Multifunctionality Impacts for Ireland?. CEPS ENARPRI Working Papers No. 16, 7 June 2006

The economic impact of trade policy reforms on various sectors of the economy receives more attention than the effects on the environment. This may be partly owing to the secondary importance attributed to environmental or multifunctionality issues when economic consequences take centre stage. An additional consideration, however, may be the practical difficulties of bringing together models that examine the economic impact of trade policy reforms and models that can measure environmental or multifunctionality indicators. This paper examines one aspect of the relationship between trade policy and the environment, namely that between agricultural trade policy reform and emissions from the agricultural sector. The paper analyses the impact of agricultural production levels and practices on the level of greenhouse gas (GHG) and ammonia emissions from this sector in Ireland. The study combines an economic, partial equilibrium, agricultural commodity and inputs model (the FAPRI-Ireland model) with a model for the estimation of GHG and ammonia emissions from agriculture. The paper considers a potential reform of agricultural trade policy under a possible World Trade Organisation agreement, to reveal the extent to which there are environmental effects associated with such a reform that need to be considered in addition to the conventional economic ones

The Rural Economy Research Centre

End of project report ENARPRIThe economic impact of trade policy reform receives less attention than the impact of trade policy on the environment. In part this may be due to the secondary importance attributed to environmental issues when economic consequences take centre stage. However, another consideration may be the difficulties of bringing together models which examine the economic impact of trade policy reform and models which can provide measures of environmental indicators. This study combines a partial equilibrium economic commodity model with a model for the estimation of agricultural input usage and GHG emissions. The paper examines one aspect of the relationship between trade policy and the environment, namely that between agricultural trade policy reform and indicators relating to emissions of Greenhouse Gases (GHG) from agriculture. The paper examines the impact of agricultural production levels and production practices on the level of GHG emissions from agriculture in Ireland under a Baseline of the recent reform of EU agricultural policy and an alternate scenario where trade policy reforms resulting from a future World Trade Organisation Doha Development Round agreement to reveal the extent to which there are significant environmental impacts which should be considered in addition to the conventional economic considerations.FAPRI-Ireland Partnershi

Adoption and Abandonment of Organic Farming: An Empirical Investigation of the Irish Drystock Sector

The adoption and possible abandonment of organic farming has yet received little attention in the literature. As time plays an important role in explaining farming decisions, a dynamic econometric framework, namely duration analysis, is used. The probability of entry to and exit of the organic drystock sector is modeled considering a wide range of economic and non‐economic factors. Organic support payments emerge as important driving factor of adoption over time. The empirical results also highlight the importance of environmental and risk attitudes, farming experience as well as influence of other organic farmers on the probability to adopt organic farming; whereas decisions to abandon organic farming appear to be mainly driven by economic and structural factors. Farmers who have an off‐farm job are more likely to abandon organic farming and a more ‘intensive’ farm system has a positive effect on staying organic.adoption, abandonment, organic farming, duration analysis, economic and non‐economic factors., Farm Management,

CAP reform post 2013: Examining the equity dimensions of agricultural support.

This research was supported by EU FP6 research funding, contract. SSPE-CT-2005- 021543.Using a dynamic multi-product partial equilibrium model, this paper firstly examines the potential impact of recent policy changes accruing from the mid term review of the Common Agricultural Policy (CAP) in 2003 on the cattle and sheep sectors in Ireland. Secondly, this paper evaluates the potential impact of the implementation of a CAP budget neutral, common EU flat area payment across all Member States. The European Commission has signalled that it will be evaluating current differences in the level of support between Member States as, for example, in the explanatory memorandum accompanying the Commission’s Health Check proposals the Commission argues that it is “increasingly harder to justify the legitimacy of significant individual differences in the support level which are only based on past support” (CEC, 2008; p.18). This paper demonstrates how there are significant differences in the level of CAP payments per hectare across Member States, as generally farmers in more prosperous Western and Nordic countries receive a much higher level of payment per hectare than farmers in relatively poorer Central and Eastern European countries. In relation to Ireland, similar to most other EU-15 countries, farmers benefit from the current inequitable distribution of payments and the results indicate that any move towards equalising the level of payments per hectare will have a significant negative impact on agricultural production and net trade.This research was supported by EU FP6 research funding, contract. SSPE-CT-2005- 021543

The 2003 CAP reform: Do decoupled payments affect agricultural production?

working paperThe move from coupled payment policy instruments to payments that are decoupled from production have made estimating future trends in agricultural output much more challenging. Using a dynamic multi product partial equilibrium model, the overall aim of this paper is to examine the potential supply inducing effect of decoupled payments. This issue is important in the context of WTO negotiations, and, in particular, in discussions surrounding the appropriateness of decoupled payments being included as a ‘green box’ policy. The results suggest that farm operators, to a large extent, do not treat these payments as fully decoupled and they do in fact maintain a strong supply inducing effect on agricultural production. Findings suggest, however, that this trade distorting effect is less than previously coupled payments

Economic Projections for the Dairy and Pig Sectors

End of Project ReportThis study examines the effect of changes in agricultural policy and other important economic factors on the outlook for milk and pig production in Ireland in future years. The analysis is conducted at an aggregate commodity level for the dairy and pig sectors. Companion reports provides similar detail on other agriculture sectors (including beef, sheep and cereals) and for the outlook at farm level. The analysis summarised here took place in 2001 and 2002. The potential effect of a change in international trade policy under the World Trade Organisation (WTO) agreement is examined. Specifically, the analysis assumed two different possibilities for the reduction and the elimination of export subsidies. Subsequently, the impact of a change in the EU’s extensification regime is examined. A series of interlinked economic models capable of projecting key price and output variables were built for the main Irish agricultural commodities, including the dairy and pig sectors, and these in turn were linked with models for the EU and the World. It was thus possible to estimate the implications for the Irish dairy sector of supply, demand and policy changes at a world and EU level. The Baseline analysis showed that under a continuation of current policy that by 2010, the Irish milk price is projected to decline to just over 25 euro per 100 kg. It was found that relative to the Baseline outcome for 2010: • a reduction in EU export subsidies in the dairy sector equivalent in scale to those introduced in the Uruguay Round Agreement would lead to a reduction in the Irish milk price of seven per cent by 2010 • an elimination of EU export subsidies in the dairy sector would lead to a reduction in the Irish milk price of 20 per cent by 2010 The Baseline analysis showed that, under a continuation of current policy, by 2010 the Irish pig sector value was projected to decrease by four per cent relative to its 2000 level. It was found that relative to the Baseline outcome for 2010: • a reduction in EU export subsidies in the agriculture sector equivalent in scale to those introduced in the Uruguay Round Agreement would lead to a reduction in Irish pig sector output value of less than two per cent • an elimination of EU export subsidies in the agriculture sector would lead to a reduction in Irish pig sector output value of eight per cent The implications of a reform of the extensification regime were not substantial. It was found that they fell for the most part on the beef and sheep sectors. The effect on milk and pig production was negligible

Study on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Policy

End of project reportStudy on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Polic