Measuring the impacts of the CAP in Spain: A CGE model approach

The Mid Term Review introduced a decoupling of agricultural support from production decisions, although with opt-out clauses for specific payments in particular sectors. The ‘Health Check’ seeks to deepen the degree of decoupling, whilst importantly for Spain, offers the option of extending this model of support to the fruit and vegetables sectors. Employing a computable general equilibrium model, this paper sets out to quantitatively assess the agro-food and macroeconomic impacts of the Mid Term Review and Health Check proposals in Spain. With greater decoupling, agricultural output falls slightly, whilst resources are reallocated in favour of arable activities.CAP, CGE modelling, ORANI, mid term review, health check., Agricultural and Food Policy, C68, Q18.,

The Euro-Med FTA and an Agro-Food Deal: Potential Impacts in Greece

We employ a heavily modified ‘agricultural’ variant of the GTAP model and a realistic baseline scenario to assess the impact on the Greek economy from a hypothetical ‘hub and spoke’ and a ‘FTA’ EUMED agro-food and fisheries trade agreement. Long run estimates show that Greek agro-food and fisheries sectors are not seriously affected, where surprisingly, trade diversionary losses to Greece from the FTA scenario are minor given minimal south-south trade links between Mediterranean Partner Countries (MPC). Further research shows that under complete CAP decoupling, notable additional welfare gains for MPC are realised, whilst Greece stands to lose approximately €300 million.Barcelona Declaration, Computable General Equilibrium (CGE), Global Trade Analysis Project (GTAP), International Relations/Trade,

EU import restrictions on genetically modified feeds; impacts on Spanish, EU and global livestock sectors

Over the last decade, much controversy has surrounded the usage of genetically modified organism (GMO) technology in commercial agriculture. More specifically, it is feared that GMOs may introduce new allergens into the food chain or contribute to antibiotic resistance. At the current time, the European Union (EU) adopts a zero tolerance policy toward «non-approved» GMO imports, whilst the approval process has not kept pace with the proliferation of new GMO varieties. In the EU livestock sectors, this apparent mis-match threatens to interrupt supplies of high protein feed inputs (e.g., soymeal) from countries with more relaxed regulations regarding GMOs. Employing a well known multi-region computable general equilibrium framework, this study quantitatively assesses the impact of a hypothetical EU import ban on unapproved GMO varieties of soybean and maize imports on livestock, meat and dairy sectors. The model code is heavily modified to improve the characterisation of the agricultural sectors and land usage, whilst a realistic baseline is employed to update the global database to 2008, the year the hypothetical ban is implemented. In the «worst case» scenario, there are significant competitive losses in EU livestock, meat and dairy sectors. In Spain, the negative impacts are particularly pronounced given the importance of pig production in agriculture. In contrast, all non-EU regions� trade balances improve, with notable trade gains in the USA and Brazil. To conclude, the EU must urgently find a long term strategy for GMOs if it is to reconcile political expediency with pragmatic economic concerns. Additional key words: computable general equilibrium, global trade analysis project.El uso de organismos genéticamente modificados (OMGs) en los sectores agro-ganaderos ha desatado mucha polémica. En particular, se teme que puedan introducir nuevos alérgenos dentro de la cadena agroalimentaria, o subir el nivel de tolerancia hacia los antibióticos. Actualmente, la Unión Europea (UE) aplica tolerancia cero hacia las importaciones de OMGs «no-aprobados», aunque la tasa de aprobación no se mantiene en paridad con la proliferación de nuevas variantes de OMGs. En la UE, este desajuste podría interrumpir los suministros de piensos con alto contenido proteico desde los países que aceptan el uso de OMGs. En este estudio se emplea un modelo de equilibrio general computable mundial, para analizar el impacto de una prohibición hipotética de las importaciones de soja y maíz transgénicos no-aprobados sobre los sectores ganaderos con orientación cárnica y láctea. Se modifica intensamente el modelo para reflejar con más precisión el sector agrario y el uso de la tierra. Además, se emplea un «baseline» realista para actualizar la economía global hasta 2008, año en que se implanta la prohibición. En el peor escenario planteado, se dan pérdidas grandes en los sectores ganaderos, tanto de carne como de leche, en la UE, mientras en España el impacto es peor debido a la importancia del sector de porcino. En contraste, terceros países experimentan ganancias en sus balanzas comerciales, especialmente EEUU y Brasil. En conclusión, la UE debe adoptar una estrategia sobre los OMGs para reconciliar las amenazas económicas potenciales sobre los sectores ganaderos con las preocupaciones sanitarias

Quantization from Hamilton-Jacobi theory with a random constraint

We propose a method of quantization based on Hamilton-Jacobi theory in the presence of a random constraint due to the fluctuations of a set of hidden random variables. Given a Lagrangian, it reproduces the results of canonical quantization yet with a unique ordering of operators if the Lagrange multiplier that arises in the dynamical system with constraint can only take binary values $\pm\hbar/2$ with equal probability.Comment: 6 pages, accepted for publication in Physica

La liberalización de comercio agrícola en la Ronda de Doha: los impactos sobre España

[EN] Whilst there is a growing literature of computable general equilibrium (CGE) studies examining the impacts of the current Doha Proposals, estimates for the EU are highly aggregated (i.e., EU15). Employing a detailed baseline scenario and a plausible Doha outcome, we examine the long run costs for the European Union, in particular focusing on Spain. Moreover, we implement recent CAP reforms through explicit modelling of CAP mechanisms to provide greater credibility in assessing the long run asymmetric budgetary and welfare impacts on EU member states. The estimates forecast resource substitution effects between Spanish agro-food sectors and resource shifts from agro-food activities into manufacturing and services production. In Spain, the impacts of proposed Amber box reductions on fishing subsidies and the relatively smaller GDP contribution result in negative CAP budgetary impacts on regional income. In contrast, France, Germany and the UK all realise small real income gains.[ES] Los estudios de equilibrio general (EG) que examinan el impacto de las propuestas de la Ronda Doha se han centrado en la Unión Europea (UE) como un agregado. Partiendo de un escenario base detallado y un resultado plausible de las negociaciones de Doha, se examinan los costes a largo plazo para la UE, con especial énfasis en España. Se examinan además, las recientes reformas de la PAC para proporcionar una mayor credibilidad a la estimación de los efectos presupuestarios y sobre el bienestar de los países miembros. En España, el modelo predice una reorientación de los recursos desde el sector agro-alimentario hacia el manufacturero y de servicios. Asimismo, el impacto de la reducción en la caja Ámbar sobre los susbsidios a la pesca y la relativamente menor contribución al PIB conducen a impactos negativos del presupuesto de la PAC sobre la renta regional. Por el contrario, Francia, Alemania y el Reino Unido se benefician de pequeñas ganancias reales en renta.Philippidis, G. (2005). Agricultural trade liberalisation in the Doha Round: impacts on Spain. Economía Agraria y Recursos Naturales - Agricultural and Resource Economics. 5(10):41-68. doi:10.7201/earn.2005.10.03SWORD416851

A CGE Analysis of the Harbinson Proposal: Outcomes for the EU25

In this study, we employ the Harbinson proposal and July Framework to compare a ‘likely’ Doha scenario with an ‘inclusive’ baseline. The key aim is to assess the impacts across EU member states. More specifically, we (i) employ the latest version 6 of the GTAP database, (ii) explicitly model CAP mechanisms (e.g., quotas, decoupled payments, set-aside, CAP budget etc.) to more accurately assess the asymmetric trade led welfare effects on selected EU member states, and (iii) introduce binding overhangs into domestic support, export subsidies and more importantly market access commitments. Whilst the EU regions benefit from the multilateral reform proposals, the gains are weakened considerably by the tariff binding overhangs, where the EU25 only gain ten per cent of their potential trade led welfare gain from the proposals. On this basis, a more positive stance must be applied if the Doha Reforms are to yield a meaningful outcome for all.Research Methods/ Statistical Methods,

The EU budget battle: Assessing the trade and welfare impacts of CAP budgetary reform

There is a paucity of quantitative impact assessments of the sectorial and macroeconomic impacts of CAP budget reform for EU member states. To fill this gap, the current study employs a sophisticated agricultural variant of the GTAP model to evaluate the recently agreed CAP spending limits for the financial period 2014–2020 as well as a more radical 50% cut to the CAP budget proposed by the UK government. The study incorporates methodological innovation in terms of the modelling of CAP budgetary mechanisms. Furthermore, official EU auditing statistics are employed to (i) greatly improve the existing representation of agricultural support payments in the GTAP benchmark data and (ii) implement a detailed contemporary CAP baseline for member states to capture both the decoupled/coupled split of support payments and the distribution of support across both ‘pillars’. In general, CAP expenditure cuts have muted impacts on EU and world agricultural markets; whereas changes in net transfer payments have implications for real income and macro trade balances in EU member states. This observation is particularly pertinent when assessing conciliatory reductions in the UK rebate in exchange for deeper CAP budget cuts.Publishe