Welfare distribution between EU Member States through different national decoupling options. Implications for Spain

SUMMARY: This paper makes use of an agricultural sector model to analyse welfare effects derived from different national implementation options of the CAP Reform 2003. It shows that agricultural prices developed more favourable in a full premium decoupling scenario, since agricultural production declines more pronounced compared to a partial decoupling scenario. The use of the partial decoupling mechanism helps Member States to distribute income into less favoured areas but is not the optimal policy choice. However, if other Member States follow the same path of reform, a "prisoner's dilemma" will most likely be observed: partial decoupling appears as the preferred option for individual Member States, since high domestic production and high producer prices would be expected, but this would lead to welfare losses for consumers and taxpayers. Distribución de bienestar económico entre Estados Miembros ante distintas opciones de desacoplamiento en el marco de la nueva PAC – Consecuencias para España RESUMEN: Este trabajo modeliza los efectos en el bienestar económico derivados de distintas op-ciones de desacoplamiento de las primas contenidas en la reforma de la Política Agraria Común apro-bada tras los Acuerdos de Luxemburgo en 2003. Se observa como bajo un escenario de pleno desaco-plamiento, los precios agrarios evolucionan más favorablemente que bajo un desacoplamiento parcial debido a una caída de la producción más pronunciada. El uso del mecanismo de desacoplamiento par-cial permite a los estados miembros mantener determinados cultivos en zonas marginales, lo que resul-ta en una solución no óptima. Si los demás países siguieran el mismo camino de reforma, podría surgir un problema tipo "dilema del prisionero". La opción de desacoplamiento parcial aparecería como la opción preferida desde el punto de vista individual al asegurar una mayor producción doméstica y altos precios de producción. No obstante, a nivel agregado, el resultado sería una reducción de renta de consumidores y contribuyentes. PALABRAS CLAVE: Política Agraria Común, análisis de equilibrio parcial, modelización, desaco-plamiento, análisis de bienestar.Common Agricultural Policy, partial equilibrium analysis, modelling, decoupling, welfare analysis., Agricultural and Food Policy, C61, D60, Q18,

Effects of decoupling on land use: an EU wide, regionally differentiated analysis

This paper presents a quantitative analysis of the impacts of the „Luxembourg Compromise†as compared to a continuation of Agenda 2000 to the year 2010. The employed new version of the CAPRI model allows us to represent the different member states’ implementations of the CAP reform and to reflect endogenous world market prices based upon a spatial global trade model. The specific contribution of the analysis is a detailed look at the impacts of national differences in the CAP implementation and regional production structures with respect to changes in land allocation. At EU level, cereal areas decrease by about 5% and oilseeds by about 3%. This is paralleled by increases in the set-aside acreage and extensive fodder production. However, significant differences at the regional level can be observed. They are caused mainly by differences in the shares of durum wheat and fodder maize.decoupling, agricultural sector modelling, Luxembourg Agreement, land allocation, Agricultural and Food Policy, Land Economics/Use,

An integrated model platform for the economic assessment of agricultural policies in the European Union

A number of economic models have been applied to analyse the Common Agricultural Policy. The partial equilibrium models CAPRI, ESIM, AGLINK, AGMEMOD and CAPSIM and the general equilibrium models GLOBE and GTAP are currently integrated in a modelling platform for Agro-Economic Policy Analysis in the premises of the Joint Research Centre in Seville in close collaboration with Directorate- General for Agriculture and Rural Development. Each of the models included has a specific focus, enlarging the capacity for complex policy analysis within this platform. This can be done by comparing the results of different models or by linking them, where several methodological options are available. This paper gives some insights on current applications in the field of model integration for agricultural policy analysis.European Commission, Common Agricultural Policy, economic models, quantitative analysis, Agricultural and Food Policy, Research Methods/ Statistical Methods,

Review of Main Methodological Approaches Quantifying the Economic Effects of the European Milk Quota Scheme

This report is based on the outcome of a study carried out by the European Commission's Joint Research Centre - Institute for Prospective Technological Studies (JRC-IPTS, Spain) in cooperation with EuroCARE (Bonn, Germany) and the collaboration of the Agricultural Economics Research Institute (LEI, the Netherlands) and the Catholic University of the Sacred Heart (Unicatt, Italy). The report provides a review the most recent studies modelling the European milk quota. The focus is on milk quota rents, which are a central element in carrying out impact analyses on dairy policies. Direct approaches to estimating milk quota rents are the only option for providing empirically gained estimates to be used in equilibrium models. From the reviewed empirical estimates, it appears that differences in magnitude and rankings are present across the considered studies. This poses serious problems when these estimates are used for calibration, because equilibrium models are highly sensitive to the assumptions made on quota rents. Another difficulty lies in the choice of the length of run used when calibrating. As previously mentioned, equilibrium models are sensitive to the assumptions made on quota rents and different lengths of run may lead to different policy conclusions. Given that the micro-econometric estimation of milk quota rents seems to be an ongoing issue and its translation for equilibrium models far from being settled, it is advisable to perform sensitivity analysis using, whenever possible, different sets of estimates in order to assess the robustness of policy analysis.JRC.J.5-Agriculture and Life Sciences in the Econom

Definition of the CAPRI Core Modelling System and Interfaces with other Components of SEAMLESS-IF

Environmental Economics and Policy,

EU Impact analysis on GHG-emission proposal: Focus on agriculture

OutlineMotivation & background work at the JRCEU agricultural emissions in perspectiveMethodology: CAPRI ModelScenario assumptionsMain resultsLimitationsConclusionsConclusions•Without further action, agricultural GHG emissions in the EU-28 are projected to decrease by 2.3% by 2030 compared to 2005.•The setting of GHG emission reduction obligations for the EU agriculture sector without financial support shows important production effects, especially in the EU livestock sector•The decreases in domestic production are partially offset by production increases in other parts of the world (leakage)•Adverse effects on EU agricultural production and emission leakage are significantly reduced if subsidies are paid for the application of technological emission mitigation options… however, with considerable budgetary costs to trigger adoptio

Partial Stochastic Analysis with the Aglink-Cosimo Model: A Methodological Overview

Aglink-Cosimo is a recursive-dynamic partial equilibrium model developed and maintained by the OECD and FAO Secretariats as a collaborative effort. The model is primarily used to prepare the OECD-FAO Agricultural Outlook, a yearly publication aiming at providing baseline projections for the main global agricultural commodities over the medium term. This deterministic projections are enhanced by a Partial Stochastic Analysis tool, which allows for the analysis of specific market uncertainties. This is done by producing counterfactual scenarios to the baseline originating from varying yields and macroeconomic variables stochastically. The aim of this report is to propose and evaluate different methods of analysing stochastically important yields and macroeconomic uncertainty drivers. In a first stage, we identify and evaluate the best parametric method to extract unexplained variability, which we consider as uncertainty in the macro and yield drivers. In a second stage, we test parametric and nonparametric methods side by side to simulate ten years of potentially different macroeconomic and yield environments. The results can be summarised as follows. For yields, we find out that a parametric cubic trend method performs best in the first stage and a non-parametric hierarchical copula (Clayton) method is more appropriate in the second stage. For macroeconomic variables, a vector autoregressive model performs best in the first stage, while a non-parametric hierarchical copula (Frank) method is more appropriate in the second stage.JRC.D.4-Economics of Agricultur

Effects for global agriculture of country-specific climate policy regimes with a focus on methane

While countries have agreed in the Paris-agreement on common rules to report GHG emissions, the design of domestic climate policy regimes remains in the national domain. This may cause different carbon prices for climate gasses across countries, between a country's emission sectors, and within the same sector. Our focus is on methane, which is a major emitter from agriculture, but also linked to livestock farming which is a core activity in agriculture worldwide. We analyse the potential effects of domestic carbon pricing regimes for agriculture in a non-cooperative game theoretic setting using a global agricultural sector model. Our results indicate no ‘race to the bottom’ to apply carbon pricing regimes that result in lowest implicit carbon prices for methane. Enforcing a uniform regime can reduce additional global warming with up to 0.02 °C, but runs the risk of agreeing to lower emission cuts than a nationally determined choice would suggest.Effects for global agriculture of country-specific climate policy regimes with a focus on methanepublishedVersio

PESETA III: Agro-economic analysis of climate change impacts in Europe

This report presents the agro-economic analysis within the PESETA III project, focusing on the effects of climate change on crop yields and related impacts on EU agricultural production, trade, prices, consumption, income, and welfare. For this purpose the CAPRI modelling system was employed, using a combination of a Shared Socioeconomic Pathway (SSP2) and a Representative Concentration Pathway (RCP8.5). For the climate change related EU-wide biophysical yield shocks, input of the agricultural biophysical modelling of the PESETA III project was used, which provided crop yield changes under water-limited conditions based on high-resolution bias-corrected EURO-CORDEX regional climate models, taking also gridded soil data into account. As agricultural markets are globally connected via world commodity trade, it is important for the agro-economic analysis to also consider climate change related yield effects outside the EU. The analysis, therefore, was complemented with biophysical yield shocks in non-EU countries as provided by the AgCLIM50 project. To simulate and assess the response of key economic variables to the changes in EU and non-EU biophysical crop yields, one reference scenario (without yield shocks) and two specific climate change scenarios were constructed, one scenario with yield shocks but without enhanced CO2 fertilization and another scenario with yield shocks under the assumption of enhanced CO2 fertilization. The projection horizon for the scenarios is 2050.JRC.D.4-Economics of Agricultur

Documentation of model components EXPAMOD and CAPRI

Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Production Economics,