Modelling Policies for Multifunctional Agriculture and Rural Development in a Remote EU Region (Caithness & Sutherland, Scotland, UK)

A modified version of a system dynamics model constructed for an EU-wide case-study project (TOPMARD) using STELLA software was used to simulate the effects of a number of development scenarios for a remote rural area in Northern Scotland, i.e. Caithness & Sutherland, which is characterised by multifunctional agriculture. In this paper, the context of the modelling work in policy and socioeconomic terms is first described. This is followed by the specification of the model and of the modelling scenarios, one of which relates to the “decommissioning” (run-down) of a major industrial site (Dounreay) within the area. The modelling results are discussed, in terms of regional population, land use, economic and other terms, from 2001 to 2015/2031. Finally, some conclusions are drawn, both about the implications of the results for such remote rural regions, and the usefulness of this type of modelling exercise for policy analysis of multifunctionality and rural development.modelling, multifunctionality, input-output, systems dynamics, rural policy, Agricultural and Food Policy, Community/Rural/Urban Development, Public Economics, Research Methods/ Statistical Methods,

Rural development policy and the provision of public goods: challenges for evaluation

Environmental “public goods” generated by agricultural land use are discussed in terms of their conceptual underpinnings and how they have been addressed to date in European Union policy for agriculture and rural development. The current debate on CAP reform has intensified the already considerable debate over how these goods should be valued, and how the relevant policy measures should be evaluated. Against this background, a number of methodological and practical issues for evaluation are discussed, including accounting for spatial scale and diversity, the estimation of use and non-use values, governance, potential conflict between “public goods” and their marketisation, and accounting for the marginal effects of rural development policy on environmental assets and their values.public goods, evaluation, Agricultural and Food Policy,

REGIONAL IMPACT ANALYSIS OF EUROPEAN POLICY SPENDING IN A RURAL REMOTE AREA (CAITHNESS & SUTHERLAND, SCOTLAND, UK)

A modified version of a system dynamics model constructed for an EU-wide case-study project (TOP-MARD) using STELLA software was used to simulate the effects of a number of development scenarios for a remote rural area in Northern Scotland, i.e. Caithness & Sutherland, which is characterised by a high regional importance of agriculture for the local economy. In this paper, the context of the modelling work in policy and socio-economic terms is first described. This is followed by the specification of the model and of the several modelling scenarios, which relate to the reconfiguration of Pillar 2 spending within the area and an reversal of recent Structural Funds spending for 2007 onwards. The modelling results are discussed, in terms of regional population and economic trends, from 2001 to 2015. Finally, some conclusions are drawn, both about the implications of the results for such remote rural regions, and about the usefulness of this type of modelling exercise for policy analysis of rural development measures.modelling, input-output, systems dynamics, rural viability, Marketing,

REGIONAL DEVELOPMENT OPTIONS ON A LOCAL SCALE BEYOND 2013 – THE CASE OF CAITHNESS AND SUTHERLAND (SCOTLAND, UK)

With the latest reform of EU Structural Policy, the Highlands and Islands have been excluded from further support by Structural Funds beyond 2013, but the new Scottish Rural Development Programme has increased CAP Pillar 2 expenditures in Scotland. A modified version of a system dynamics model constructed for an EU-wide case-study project (TOP-MARD) was used to simulate the effects of these and other policy changes in Caithness and Sutherland (C&S), a remote rural area in Northern Scotland. Several alternative modelling scenarios were developed, mostly relating to reconfigurations of Pillar 2 spending within the area. The modelling results, i.e. projections from 2001 to 2021, are discussed in terms of agricultural employment, regional population, and economic trends. It is shown that by targeting Pillar 2 money to non-agricultural rural development measures instead of to farm investments, less favoured area or agrienvironmental schemes, the long-term trends in severe depopulation, ageing and deindustrialisation in the area can be alleviated but not avoided. Finally, some conclusions are drawn, both about the implications of the results for sustainability in C&S, and in general for future sustainable rural development policy.rural development, CAP reform, Scotland, Pillar 2, regional modelling, Community/Rural/Urban Development, Q01, Q18, R23, R50,

General Equilibrium Analysis of the Spatial Impacts of Rural Policy

General equilibrium (GE) techniques have recently been used to simulate policy impacts for neighbouring or different rural areas, thus focussing on the important spatial aspect of such policies. A Social Accounting Matrix (SAM) represents production, households, government, etc. in matrix form, while computable GE models introduce greater behavioural flexibility at the cost of parameterisation. Several SAM and CGE models have recently been built for rural regions, while others have tried to represent rural-urban linkages. This paper presents two SAM applications, and one current CGE approach. The first SAM was developed for the analysis of the economic impact of Objective 1 policy on six remote rural areas, including two in Greece. Six specific regional SAMs were used to quantify the growth-generation effects of EU policies and scenarios on these local economies. The second effort used a hybrid three-area SAM for two different rural areas and an adjacent city in Crete to assess the diffusion patterns of economic impacts generated by three types of CAP measure in one of the rural areas. A CGE example, from the ongoing TERA project, seeks to model the determinants of economic agglomeration, and will attempt to cope with rural/urban distance and environmental externalities. Advantages of the SAM approach include its simplicity and availability of data and software. Disadvantages include significant data needs, linear behaviour, no real modelling of growth (development) or price changes, and the fact that some policies apply to many sectors in unknown way. The CGE approach may overcome some of these problems.Community/Rural/Urban Development,

The Promotion of Rural Tourism in Korea and Other East Asia Countries: Policies and Implementation

Within a context of global trade liberalisation and constrained national budgets, agriculture in many countries has proved incapable of sustaining household livelihoods an d socio-economic development in rural areas. The post-war industrial success of several Asian countries has suggested various alternatives for rural development, including tourism for domestic and possibly foreign visitors. After outlining the economic characteristics of rural tourism and its policies, this paper reviews the evolution of government policies in this area in East Asia, including the establishment of "tourist farms" and "pilot scheme" villages in Korea since the 1980s. A field survey of some 200 Korean village leaders and others, undertaken in 2004, is reported as to the attitudes of this policy clientele towards the tourist potential of their own villages, and ways of exploiting this potential. On this basis, conclusions are drawn as to future policies in this area, taking into account the capabilities of the rural population in East Asian countries, and the need for and scope of governmental action.rural tourism, Korea, East Asia, tourism policy, Community/Rural/Urban Development, Resource /Energy Economics and Policy, O18, Q26, Q28,

Distributional Impacts of CAP Adoption on Romanian Households

This paper focuses on estimation of distributional economic welfare effects of the adoption of the CAP on different groups of Romanian households. The calculations of welfare effects are based on 1999 household data and refer to a 10-fold breakdown of Romanian households, i.e. five socio-economic categories from urban and rural areas, taking into account own (home) production of food. To identify the most vulnerable groups of Romanian consumers to food price changes, the Slutsky approximation Compensating Variation approach is applied. The results suggest that, if the current CAP is adopted and results in food price changes averaging a 10 per cent increase in all food prices, the lowest-income groups (i.e. urban and rural unemployed households, urban pensioner households) will be the most affected, ceteris paribus (prices of all other goods held constant). The minimum amount by which the groups could be compensated for the effect of price change on their real incomes varies between Euro 3 per month for employers' households (about 1% of total income) and about Euro 8 per month for farmers' households (6%). However, due to the relatively large shares of food self-production in total consumption, in particular by rural households, somewhat smaller money compensation would be appropriate.distributional economic effects, CAP, Slutsky approximation, Compensating Variation, Romania, Agricultural and Food Policy,

The Distribution of CAP Payments - Redistributional Injustice or Spatially Adapted policy?

This paper analyses the distributional equality of individual Scottish Government-administered payments in 2008 under CAP Pillars One (single farm payments) and Two (rural development measures) and in total, in terms of economic, social and spatial factors. The analysis shows that 94% of all payments were paid to claimants in core rural areas (94%) while only a few (5%) claimants resided in urban areas or outside of Scotland (1%). However, in both Pillars, claims made by urban residents were often higher than those made by rural dwellers. The Ordinary Least Squares spatial analysis shows that the level of payments was extremely dependent on the geographical location and natural conditions. Spatial factors describing the economic situation in the area of the claimant were significantly related to the level of the CAP amounts paid. Overall, the level of amounts paid was positively related to the natural, economic and social structures of the area of residence. The discussion tackles the question of whether the current system of farm income support by decoupled payments should be developed into a poverty payment system.Pillar One, Common Agricultural Policy, Gini-Coefficient, Rural-Urban distribution, distributional justice, Land Economics/Use, Q15, R14, R11,

Effect of Farm-Level Constraints, Existing and Prospective Policies on Expansion of Coconut-Based Intercropping in Sri Lanka

Coconut-based intercropping (CBI) in Sri Lanka was introduced some 20 years ago to overcome the two main limitations of traditional coconut monocropping, inefficient land use and low incomes to farmers, but it has not been widely adopted. This study analyses the effect of farm-level resource constraints, and government policies on the intensity of adoption of CBI. A multiperiod linear programming (MLP) model was applied for three farmer groups - resource poor, medium endowed, well endowed - categorised using cluster analysis. Data was collected from a survey of randomly selected 113 intercroppers. Empirical results reveal that expansion of CBI is mainly constrained by seasonal labour shortages for all farmer groups, particularly the well endowed, and by the scarcity of cash in the case of resource-poor farmers. CBI policies aimed at subsidising inputs or intercrop prices are not likely to be efficient in raising adoption, but alternative policies aimed at alleviating resource constraints would be more effective. The study concluded that the low adoption of CBI is mainly attributable to the scarcity of different farm-level resources (other than land), at varying degrees among different farmer groups. Hence a targeted approach to alleviate them is suggested.Crop Production/Industries,

Labour Management for Profit and Welfare in Extensive Sheep Farming

Sheep welfare is an emerging topic in research and food marketing, and recent studies suggest that farm labour is a key factor for both animal welfare and productivity in extensive sheep farming systems, although little research has been done into labour utilisation in these systems. This paper reports field data collection on two commercial farms and the use of a linear programming (LP) model to link labour economics and animal welfare analysis. The model maximises the number of ewes to clooked after over the lambing period, when constrained by labour availability for various key tasks and by a pre-determined level of sheep welfare. The results show a trade-off between welfare level and labour input per sheep. Dropping tasks with less significant welfare and productivity consequences is an effective way of increasing carrying capacity (from 977 ewes/shepherd to 1428), as is working longer hours (1174 ewes/shepherd) or only doing the legal minimum of welfare checking (labour reduced from 0.68 min/ewe to 0.44 min/ewe) . The field data suggest that farmers currently provide high welfare, and that, despite much time spent away from the flock (e.g. driving), they spend a large amount of time (39% of total) with their sheep.Labour, Sheep, Linear Programming, Animal Welfare, Livestock Production/Industries, Q10, Q19, Y1,