Simulation of Livestock Breeding Economics in Conditions of the EU

In the paper there are described mathematical principles of biological, technological and economic model relations and connections in animal breeding on which the mathematical model AGRO-ZV is based. With the model it is possible to simulate impacts of the agricultural policy on livestock breeding economics and commodity economics in dependence on different agricultural policy variants. In the article there is illustrated a usage of the model for simulation of dairy cattle economics before (2003) and after (2004) the accession of the Czech Republic to the EU.mathematical modeling, livestock breeding, dairy cattle econmics, model AGRO-ZV, Livestock Production/Industries,

Risk and Subsidies in Czech Agriculture - an ex-ante Analysis of Farmers´ Decision-making

This paper deals with the ex-ante analysis of the effects of farm subsidies on farm behaviour. Beside that the risk factor is implemented in the farm model to reflect and quantify potential (negative) impact on farm results. A farm-level optimization model is used to assess the effects of different kind of policies and risk on production structure, income indicators and land use management. It appeared that a reasonable level of risk (via income variation) have impact, but not significant. If liberalisation would have happened (zero direct and disadvantageous payments) production would homogenised, 30% of land would remained abandoned, production and income would clearly decline. Other scenario points out that environmental objectives (here through more extensively managed land) could not be necessarily more costly, but in such a case without accompanying livestock. To increase profitable livestock production requires to provide grassland and animal payments above the current level (obviously in addition to stimulating production economizing) whereas both payments should be conditional to each other.Agrarian policy, risk assessment, farm model, direct payments, Agricultural and Food Policy, Farm Management, GA, IN,

Simulation of Livestock Breeding Economics in Conditions of the EU

In the paper there are described mathematical principles of biological, technological and economic model relations and connections in animal breeding on which the mathematical model AGRO-ZV is based. With the model it is possible to simulate impacts of the agricultural policy on livestock breeding economics and commodity economics in dependence on different agricultural policy variants. In the article there is illustrated a usage of the model for simulation of dairy cattle economics before (2003) and after (2004) the accession of the Czech Republic to the EU

Modelling of impacts of the agricultural sector on the national economy of the Czech Republic

Continuous efforts to predict what is the most likely development and importance of the agricultural sector are being made in the long-term perspective. To this end, EAA prediction models (SZU-P1 and SZU-P2) were constructed, and coupled with a model that describes the importance and linkages of the agricultural sector to other sectors within the national economy of the Czech Republic (HDP-1 model). The models described below can be used for measuring and simulation of impacts of the agricultural sector with downstream and upstream industries on the Czech GDP, but also monitoring flows and linkages of the total agri-food industry complex on the national economy

Risk and Subsidies in Czech Agriculture - an ex-ante Analysis of Farmers´ Decision-making

This paper deals with the ex-ante analysis of the effects of farm subsidies on farm behaviour. Beside that the risk factor is implemented in the farm model to reflect and quantify potential (negative) impact on farm results. A farm-level optimization model is used to assess the effects of different kind of policies and risk on production structure, income indicators and land use management. It appeared that a reasonable level of risk (via income variation) have impact, but not significant. If liberalisation would have happened (zero direct and disadvantageous payments) production would homogenised, 30% of land would remained abandoned, production and income would clearly decline. Other scenario points out that environmental objectives (here through more extensively managed land) could not be necessarily more costly, but in such a case without accompanying livestock. To increase profitable livestock production requires to provide grassland and animal payments above the current level (obviously in addition to stimulating production economizing) whereas both payments should be conditional to each other

Distributional effects and structural change induced by various CAP Pillar 1 proposals; the case of the Czech Republic

This paper deals with the potential effects of the CAP pillar 1 on farm incomes and structural changes. It uses a dynamic Computable General Equilibrium model and a specific analysis on distributional effects. The effect of payments ceiling in the current CAP 2020 proposal with subtracting labour costs will bring only insignificant payment reduction for most farmers except large extensive beef breeders whose direct payments will drop by 13% on average. However, if the condition on labour costs is removed, capping will become effective, payments in some specialisations will drop to half and the production and employment will decline by 6% and 10%, respectively, compared to the current situation. It is showed that small farm measures could easily miss its goal if there is no possibility to adjust the threshold measure more respecting national conditions. Analogously, due to prevalence of large corporate farms on land it is very unlikely that the measure targeted on young farmers will significantly reduce an ageing problem. Regarding greening, the current proposal will induce additional operating costs on farms between 4 and 10 hectares without adequate environmental improvements. We conclude that more flexibility at the national level for respecting national farm structure will be needed if the good intentions of CAP reform are to be effective and efficient

Modelling of Economic Equilibrium in the Agrarian Sector (The AGRO-2014 Model)

The article contains research results of the Institute of Agricultural Economics and Information (IAEI), Praha, for 2015, which focused on the development and use of the AGRO-2014 model. The model contains sections of agriculture, food processing, food retail (including catering without self-sufficiency), total food consumption (including catering and self-sufficiency) and food consumption per capita (in the detailed structure permitting nutritional evaluation). AGRO-2014 is a Leontieff’s matrix-type model with a range of about 1,200 commodities. The model was used to calculate the total income and expenditure in the agrarian sector, to estimate the significance of imports and exports in this sector and to calculate an estimate of the trade margins on domestic and imported foods in the Czech Republic. Six variants of model simulations were calculated to calculate the coverage of the food consumption by the population in different sizes of the food exports and imports. Further on, the range of the trade margins on domestic and imported foods were analysed for 2007-2013. Model calculations did not confirm a hypothesis that market chains discriminate the Czech food against foreign competition

Analysis of the Czech and Slovak Agricultural Markets under Alternative CAP Scenarios - AG-MEMOD Modelling Approach

The paper presents the results of research focusing on the modelling the impact of the EU enlargement on agriculture of the Czech Republic and Slovakia. The research has been conducted under the AG-MEMOD of the 5th Framework Programme. The Czech Republic and Slovakia joined the European Union (EU) in May 2004 and became part of the single European agricultural market. The impacts of three scenarios (non-accession and two accession scenarios with SAPS and SPS introduction) are investigated. The paper concentrates mostly on pig and potato sectors. The Common Agricultural Policy (CAP) is expected to adversely affect these two sectors. This is expected to be the case especially in Slovakia. The main reason is that these sectors faced higher domestic prices and higher support level before accession, while accession will lead to a limited support and price decline. Also continued restructuring is an additional factor that will affect these sectors after accession

The future of grasslands and beef cattle in the Czech Republic

Grasslands received policy attention in the Czech Republic only just fifteen years ago, when they were threatened to be abandoned in the economic transition process. The supports to farming on grasslands have grown gradually, particularly after the EU accession. The policy followed the notion of joitness between grassland management and beef cattle raising and conditioned AE and LFA payments by a minimum livestock density. There are many reasons why the current policy will change in the new programme period. The paper tries to assess the impact of the envisaged changes on grassland maintenance. It is showed that overall future supports to farming will be sufficient to keep positive profit on grassland farms, however the structure of supports might be less appropriate to the actual objectives of grassland protection and hence, there is a threat of policy failure in the end