The application of trade and growth theories to agriculture: a survey

This article reviews a broad range of theoretical concepts available to explain international trade in agricultural and food products. For many years agricultural trade analyses were largely based on traditional perceptions of comparative advantage following neoclassical theory. Observations of agricultural trade suggest, however, that concepts from modern trade and growth theories are increasingly relevant. This survey demonstrates that many opportunities exist for applying these new theories to the modern food economy.International Development, International Relations/Trade,

INTERNATIONAL DIFFUSION OF GAINS FROM BIOTECHNOLOGY AND THE EUROPEAN UNION'S COMMON AGRICULTURAL POLICY

This paper analyses the impact of adopting or rejecting genetically modified GM crops in the EU, taking into account the European Union's Common Agricultural Policy (CAP). In this paper the productivity impact of GMs differs across crops, as it takes factor biased technology change into account. The transfer of knowledge across countries is modelled as a process of endogenous knowledge spillovers. Analyses with a multi-region applied general equilibrium model shows that the CAP protects farm income and production from not adopting GM crops in the EU but has costs in terms of welfare. The EU will forgo substantial benefits if it banned GM imports.Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,

Adjustment and differences in farm performance; A farm management perspective from the Netherlands

There are differences in performance between farmers. In the Netherlands this has been a major topic of research for at least 30 years. Research has shown that the managerial capacities of farmers play a major role in differences in economic and environmental performance. Management can be measured and the optimal level is not the maximum level. Farmers differ in their objectives, competences and local external situation and there-fore their strategies. These strategies can be identified. In recent years strategic management has become more important and this can be supported with consultancy. Farmers also differ in their adoption and innovation behaviour. These micro-economic results, which correlate with large differences in income and high prices of fixed assets with a limited supply, can be explained as being consistent with economic theory on perfect markets. Although these findings suggest that some farm households have attractive strategies that can cope with policy adjustments, the research supports the hypothesis but does not (yet) prove that a severe adjustment of agricultural policy e.g. towards a more market oriented policy, induces more innovation, and that due to this innovation the effects of adjusting the agricultural policy are less severe than estimated ex ante with current dynamic policy models.Farm Management,

Modernisation in Agriculture: What Makes a Farmer Adopt an Innovation?

Farm Management, Research and Development/Tech Change/Emerging Technologies,

Modernisation in Agriculture: What Makes a Farmer Adopt an Innovation?

This paper addresses the question which factors influence a farmer in deciding to adopt an innovation. We differentiate between innovations that are new to the farmer, but already well established in the sector, innovations that are early in their process of diffusion, and innovations that are new to the farmer's sector. We use an ordered probit approach to relate adoption behaviour to variables that capture characteristics of the farm (labour and financial resources and market position), of the business environment of the farm (type of production and market, degree of regulation) and of the farmer (access to information, capabilities, preferences). We use data on 865 Dutch farms and find that innovation adoption is positively related to labour resources, market position, access to information and past adoption behaviour, and negatively to solvency and the degree of market regulation.Research and Development/Tech Change/Emerging Technologies,

Consequences of EU Biofuel Policies on Agricultural Production and Land Use

Resource /Energy Economics and Policy, D58, Q13, Q24, Q27, Q28,

Future of European agriculture after the Health Check

This paper identifies major future trends and driving factors and perspectives and challenges resulting from them for European agriculture and food sectors until the year 2020. The focus of the paper is an analysis of key driving forces and the provision of a well developed reference scenario under the assumption of continued CAP reform and taking into account the framework discussions in the Doha Development Round. To assess the impact of policies the paper also examines a liberalisation (no support) and regionalization (maximum support) scenario. In terms of policy options the paper shows that the structural change process in agriculture (measured in terms of agricultural share in GDP) is a long-term process that continues with or without policy changes. The EU is facing an increasing diversity of structure and structural adjustment. The livestock sector (especially cattle) faces important challenges and restructuring. Alternative policy settings may not produce very different effect on the overall production as factor markets adjust. However, the regional impact on the environment and on the number of farms may prove to be more significant.economic modelling, future, CAP policy options, structural change, Agricultural and Food Policy,

SCENAR2020: Future of European Agriculture under Different Policy Options, the economic modelling framework

This paper identifies major future trends and driving factors and perspectives and challenges resulting from them for European agriculture and food sectors until the year 2020. The focus of the paper is an analysis of key driving forces and the provision of a well developed reference scenario under the assumption of continued CAP reform and taking into account the framework discussions in the Doha Development Round. To assess the impact of policies the paper also examines a liberalisation (no support) and regionalisation (max support) scenario. In terms of policy options the paper shows that structural change process in agriculture is a long-term process that continues with or without policy changes. EU is facing an increasing diversity of structure and structural adjustment. The livestock sector faces important challenges and restructuring. Alternative policy settings may not produce very different effect on the overall production. However, the regional impact may prove to be more significant.Economic Modelling, Future, CAP Policy Options, Structural Change, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Impact of the EU Biofuels Directive on the EU food supply chain

The paper investigates the impact of the EU Biofuels Directive (BFD) on the EU agri-food supply chain using the computable general equilibrium model of the world economy named LEITAP. LEITAP is an extended version of the Global Trade Analysis Project (GTAP) model including an improved land market modeling, substitution possibilities between capital and energy as well as between different energy sources including biofuels, feed byproducts of the biofuel production process and substitution between different feed components and feed byproducts. The simulation results shows that the implementation of the EU BFD has a pronounced impact on the markets of cereals, oilseeds and sugar and shows only a limited impact on production and consumption of other agrifood commodities which are not directly affected by biofuel production. The harvested area and production of biofuel crops (grains, oilseeds) is expected to increase by 17% and 25% respectively and sugar production by 12% as a direct result the BFD. The EU-imports of these commodities are expected to rise more than twice. The increasing demand for biofuel crops and sugar will lift domestic prices of these commodities by 25% and 19% respectively but overall agri-food price inflation will be limited to 3% in the EU and to less than 1% at world market level.EU Biofuels Directive, food supply chain, indirect land use changes, computable general equilibrium model., Agricultural and Food Policy,

Agricultural Incomes Development in EU till 2030: Scenario Analysis of Main Driving Factors

Europe’s rural areas are expected to witness rapid changes due to developments in demography, (agricultural) policies, global trade, climate change, technology and enlargement of the European Union. These changes will affect farmers’ production and income level and make the final outcome of this process uncertain. This paper tries to assess this uncertainty by analyzing the results of 34 scenarios of the EURURALIS project. The scenario outcomes were used to investigate agricultural income development and to analyze the impact of different combinations of macroeconomic and policy factors on agricultural income. The results of these scenarios were achieved in a modeling framework consisting of a modified version of the Global Trade Analysis Project model (GTAP) and the more ecological-environmental oriented Integrated Model to Assess the Global Environment (IMAGE).Agricultural incomes and production, agricultural policy, long-term scenarios,