17 research outputs found

    Assessing the impact of future CAP reforms on the demand of production factors

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    The CAP reform process has been a central issue for agricultural economics research in recent years, and is gaining further attention in view of the post-2013 perspectives. The objective of this paper is to assess ex-ante the effect of different post-2013 CAP and market scenarios on the demand of productions factors. The paper is based on the use of farm household dynamic programming models maximising the net present value with a time horizon until 2030. A representative model has been implemented for 18 different farming systems in 8 EU countries. Changes in marginal values of selected resource constraints (land, labour and capital) are used to assess the potential effect of different scenarios on farm-household demand of production factors. Results highlight that both policy and market conditions change strongly the demand of productive factors.CAP reform, Investment behaviour, Farm Household model, Factor markets, Agricultural and Food Policy, Q12,

    Impact of rural poverty reduction strategies: The case of smallholders in Sierra Leone

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    The present analysis, which exploits one of the first empirical data collected from smallholders in Sierra Leone since the end of the civil war, compares the impact of two poverty reduction strategies targeting smallholders in Sierra Leone: support to rice production is compared with support to coffee and cocoa production in terms of sustainable income generation and contributing to macroeconomic stability and growth. Supporting rice production is intended to help the country regain self-sufficiency in its traditional principle staple. This will help towards improving food security and reducing dependency on volatile world market prices which, for example, with respect to the recent global spike has had dramatic effects on the lowest incomes. Support to cocoa and coffee production on the other hand aims to create and increase income by producing exportable commodities with higher value added. This research addresses strategic options most successful in improving food security and accelerating economic development. Additionally, bottlenecks in terms of inputs, infrastructure and social and economic factors are identified and analysed in order to isolate those which once improved will impact most on productivity. The results are discussed within a broader economic and socio-economic context in particular with respect to enhanced targeting and impact of Official Development Assistance.Agriculture, Poverty, Official Development Assistance, Sierra Leone, Food Security and Poverty, O1, Q1,

    Farm Investment Beahviour in the EU: An Ex Post Analysis through Panel Data

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    Farm investment behaviour is the result of the complex interplay of several variables and is strictly connected to expectations by farmers. The main objective of this paper is to investigate the determinants of investment behaviour in EU farming systems, based on a panel analysis of 178 farm households in 6 EU countries. The analysis focuses in particular on the changes occurred between 2006 and 2009 in terms of stated intention to invest. The results confirm the role of major structural (location, farm size) and demographic (farmers age) variables in affecting farm investment as already known from the literature. However the panel analysis emphasises the changes in investment attitude occurred in the period 2006-2009, likely as a combined effect of the economic crisis and of the dynamics of agricultural costs and prices.JRC.DDG.J.5-Agriculture and Life Sciences in the Econom

    Assessing the impact of future CAP reforms on the demand of production factors

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    The CAP reform process has been a central issue for agricultural economics research in recent years, and is gaining further attention in view of the post-2013 perspectives. The objective of this paper is to assess ex-ante the effect of different post-2013 CAP and market scenarios on the demand of productions factors. The paper is based on the use of farm household dynamic programming models maximising the net present value with a time horizon until 2030. A representative model has been implemented for 18 different farming systems in 8 EU countries. Changes in marginal values of selected resource constraints (land, labour and capital) are used to assess the potential effect of different scenarios on farm-household demand of production factors. Results highlight that both policy and market conditions change strongly the demand of productive factors.JRC.J.4-Agriculture and Life Sciences in the Econom

    Farm Investment Behaviour under the CAP Reform Process

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    The results of the study, based on survey analysis as well as on modelling of farm behaviour, can be summarised in four main outcomes: Similar to the results of the first Investment study carried out in 2006 and published in 2008 (Gallerani. et. al.), in the context of the present study (carried out in 2009) for about half of the farms decoupling did not result in any change. Among those farms showing some reaction, one of the more prominent effects is the increase in on-farm investment. The price trends in 2007/2008 and the ongoing economic and financial crisis have partially reshaped access to credit, perceptions of objectives, constraints and expectations. In particular, farms have witnessed a major reduction in access to credit, particularly the share of farms using short term credit, which dropped from more than 40% in 2006 to about 7% in 2009. The change in economic conditions has increased this role of the CAP, and the importance of CAP payments in covering current expenditures has become more evident. Prices confirm their role as the key variable for investment choices. The results of the modelling exercise confirm that farm and farm-household income and investment choices depend more on the price level than on the level of payment received. Altogether, the combined effect of the recent policy reform (decoupling and first pillar payment reductions), as well as price and cost developments tend to reinforce the role of policy for the economic and social sustainability of farming. Notably, policy areas such as income support, investment and credit management, market access, as well as transitory and cross-policy mechanisms, appear to be of particular importance. Uncertainty (and related risk-management instruments) seems to play an increasing role in the investment decision process.JRC.J.5-Agriculture and Life Sciences in the Econom

    Rural poverty reduction and food security: The case of smallholders in Sierra Leone

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    Sierra Leones ranks amongst the poorest countries in the world in terms of per capita GDP, due to several factors. Concerning the agricultural sector and more specifically smallholders, which constitute the big majority of farmers, inadequate tools, land preparation, infrastructure and limited access to markets and inputs, adding to very low labour productivity, cause that smallholders operate far below their productive potential, with crop production remaining primarily driven by (semi)subsistence households generating very little income. Consequently, Sierra Leone's subsistence farming system is characterised by a highly inefficient input/output mixes as well as high pre harvest and post harvest losses. Farmers lack access to yield-increasing inputs (such as improved tools) and face limited ability to invest in economic activities not only due to credit shortage but also to village-level institutional arrangements which do not support using land as collateral for loans. Lastly, reduced cash-income keeps smallholders particularly vulnerable to remain in the poverty-trap. The present report analyses the results of a survey of 604 smallholders in 5 districts in the Northern and Eastern regions of Sierra Leone carried out in 2009 when the EU STABEX-funded projects were concluding. The purpose is on the one hand, to improve knowledge and understanding of the agri-economic and social conditions of rural areas in Sierra Leone, and on the other hand to provide a general assessment of aid programmes financed in this area by the 8th European Development Fund. For this reason, the regions selected for the survey were those representatives of the main agricultural areas of the country where support was provided: the Northern region largely dominated by rice farmers, and the Eastern region where rice farmers are also engaged in coffee and cocoa production under agro-forestry plots. While rice (main staple food) production is expected to comply with food security objectives, coffee and cocoa (main export commodities) are high value export commodities which push economic growth. Consequently, both types of crops are considered relevant in contributing to the country's development. The results of the economic analysis indicate that rice production, which largely covers own household consumption, is far below its potential due to high losses, low productivity and labour-intensity of farming, particularly in the Northern region. On the other hand, coffee and cocoa production in the Eastern region was found to be economically profitable, generating income for most of those smallholders who cultivate those crops. Regarding farm households' characteristics and income, strong regional differences between the poorer North and relatively wealthier East were observed and reflected throughout all factors analysed: yields, household size, sources of farming income, magnitude of losses and productivity. Households in the Eastern region who produce coffee and cocoa, also dispose on average of more family labour, more land and higher income compared to households in the Northern Region. Rice was recognized as being an imperative component for food security while the high market value of coffee and cocoa confirmed both commodities as important sources of income and foreign currency. Qualitative data from the survey indicated that the STABEX aid programmes were perceived as adequate in terms of their technical nature as well as regarding infrastructure and organizational improvements. However, the amount of aid was deemed altogether insufficient considering the number of households requiring assistance. In this sense, the responses to perceived adequacy do not evaluate the measure itself, but rather the amount provided in relation to local needs as understood by the recipients. Based on this analysis a set of recommendations for the policy are drawn.JRC.J.4-Agriculture and Life Sciences in the Econom

    Addressing Soil Degradation in EU Agriculture: Relevant Processes, Practices and Policies - Report on the project 'Sustainable Agriculture and Soil Conservation (SoCo)'

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    Agriculture occupies a substantial proportion of the European land, and consequently plays an important role in maintaining natural resources and cultural landscapes, a precondition for other human activities in rural areas. Unsustainable farming practices and land use, including mismanaged intensification as well as land abandonment, have an adverse impact on natural resources. Having recognised the environmental challenges of agricultural land use, the European Parliament requested the European Commission in 2007 to carry out a pilot project on "Sustainable Agriculture and Soil Conservation through simplified cultivation techniques" (SoCo). The project originated from a close cooperation between the Directorate-General for Agriculture and Rural Development (DG AGRI) and the Joint Research Centre (JRC). It was implemented by the Institute for Prospective Technological Studies (IPTS) and the Institute for Environment and Sustainability (IES). This report presents the findings of a stock-taking of the current situation with respect to soil degradation processes, soil-friendly farming practices and relevant policy measures within an EU-wide perspective. This overview includes the results of the survey on the national/regional implementation of EU policies and national policies, a classification of the described soil degradation processes, soil conservation practices and policy measures, and finally the outcome of the Stakeholder Workshop which took place on 22 May 2008 in Brussels.JRC.J.5-Agriculture and Life Sciences in the Econom

    Review of Policies Addressing Soil Degradation Processes in European Agriculture - Findings of the Project 'Sustainable Agriculture and Soil Conservation' (SoCo)

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    The project 'Sustainable agriculture and soil conservation' (SoCo) analysed the links between soil degradation processes, soil-friendly farming practices, and relevant policy measures in EU agriculture. The policy information was based on a literature review and a survey monitoring national and regional policy implementation, supplemented with details from ten case studies across the EU-27. To date, soil protection is not a specific objective of EU legislation; in order to close this gap, the Commission proposed a Soil Framework Directive which is still under discussion. Currently, some EU environmental directives are expected to have beneficial effects on soil quality (e.g. the Nitrates Directive), but to a limited extent owing to a more focused set of objectives. Parallel, environmental objectives are to be integrated in EU sectoral policies (Cardiff process), including the Common Agricultural Policy (CAP), where cross compliance and rural development measures stand out as important instruments. The study indicated that the existing policy measures have the potential to address all recognised soil degradation processes across the EU, even though not all policy measures are implemented in all Member States or regions. At present, their effectiveness for soil quality improvement is limited due to: the lack of specified reference and target levels and specific targeting of policies, as well as missing coordination between existing measures. Finally, a fully-fledged evaluation of policies will only be possible once indicators and consistent monitoring are established.JRC.J.5-Agriculture and Life Sciences in the Econom

    The potential of European Union policies to address soil degradation processes in agriculture

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    Six of the soil degradation processes recognised at EU level are closely linked to agriculture. Soil degradation implies a need for protection, maintenance and improvement of soil quality. However, due to the public good characteristics of soil quality, the market does not sufficiently assure its provision. Thus, policy intervention is required to reach desired levels of soil quality through appropriate practices. This paper provides a comprehensive overview of EU polices that have scope for addressing soil degradation in agriculture. To this aim, EU legislation and legislative proposals along with related evaluations and research projects were analysed with the intervention logic approach. To date, soil protection is not a specific objective of EU legislation but features in some policies as a secondary objective. Pursuing other environmental objectives contributes to some extent to soil quality, although not always effectively. Currently, the most important EU environmental directives for soil quality are the Nitrates Directive and the Water Framework Directive. Under the Common Agricultural Policy, the compulsory requirement to keep land in good agricultural and environmental condition plays an important role in soil protection and conservation. Rural development policy, in particular agri-environment measures, offers member states or regions options for encouraging farmers to achieve environmental quality beyond a predefined reference level. Overall, the study indicates that the existing EU policies have the potential to address all recognised soil degradation processes across the EU. Nevertheless, they should be well targeted and ask for appropriate farm management in order to reach desired levels of soil quality.JRC.DDG.J.5-Agriculture and Life Sciences in the Econom

    The future of agriculture. Prospective scenarios and modelling approaches for policy analysis

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    The objective of this paper is (i) to compare and discuss literature related to global and European outlooks in relation to the farming sector and rural areas and (ii) to provide an overview of policy modelling methodologies, especially but not only those used in assessing the impact of the Common Agricultural Policy (CAP). There is significant variation in terms of both the policies and external drivers that are taken into account in global and European outlooks, driven predominantly by the heterogeneity in focus of studies, the approach applied and/or external pressures. An increasing number of studies take on board the new CAP challenges. However, an area where improvements are needed is in the understanding of the sensitivity of policy effects to assumptions on external drivers. Two key modelling approaches applied for policy impact analysis include structural models and econometric models, with the former dominating the latter mainly due to its better adaptability to the needs of policy makers. However, with the CAP evolving towards ever more complex instruments, the relevance and predictive accuracy of structural models will possibly improve only as long as methodological and data issues are addressed.JRC.J.4-Agriculture and Life Sciences in the Econom
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