Simulation Results of AgriPoliS about Diminishing Capital Subsidies and Restrictions. Factor Markets Working Document No. 55, June 2013

This paper investigates the impacts of high interest rates for borrowed capital and credit restrictions on the structural development of four European regions. The method used is the model AgriPoliS which is a spatial-dynamic agent-based model. It is able to provide aggregated results at the regional level, but very individual results as well by considering farms as independent entities. Farms can choose between different investment options during the simulation. Several scenarios with different interest rates for borrowed capital on the one hand as well as with different levels of credit restrictions on the other hand are tested and compared. Results show that higher interest rates have less impact on declining production branches than on expanding ones. If they have the possibility farms invest in the most profitable production branch which relative profitability might have changed with high interest rates. Credit restrictions lead farms to choose smaller and cheaper investments than expensive and large ones. Results also show that income losses in both cases due to under-investment compared to the reference situation are partially compensated by lower rental prices. The impacts on structural change also differ depending on the region and the initial situation. In summary, credit subsidies or imperfections on credit markets might have indirect impacts on the type of dominant investment and therefore on the whole regional agricultural sector as well

Structural change and farm labour adjustments in a dualistic farm structure: a simulation study for the region Nitra in southwest Slovakia

This Discussion Paper explores interactions between structural impediments to labour adjustment, specific labour adjustment patterns and the impacts of differing economical and political frames. Based on the agent-based simulation framework AgriPoliS adjusted to the agricultural structure of the region Nitra in southwest Slovakia, we carry out a range of simulation experiments on the possible interplay between off-farm job opportunities for farm operators, growth in other sectors of the economy, and policy impacts. Results show that free movement of labour between sectors leads to strong adjustments in the agricultural labour force and benefits farms with a growth potential. EU Accession and a subsequent decoupling of payments lead farms to stay in business that would have otherwise left the sector. These farms, however, have a different mix of family and hired labour. -- G E R M A N V E R S I O N: Im vorliegenden Discussion Paper werden die Wirkungszusammenhänge auf landwirtschaftlichen Arbeitsmärkten, die auf ihnen auftretenden Hemmnisse hinsichtlich einer optimalen Allokation des Faktors Arbeit und die spezifischen Anpassungsprozesse unter sich wandelnden politischen und ökonomischen Rahmenbedingungen analysiert. Untersuchungsgegenstand ist die Region Nitra im Südwesten der Slovakei. Die dortige Agrarstruktur wurde zum Zweck der dynamischen Abbildung von Strukturveränderungsprozessen im agentenbasierten Model AgriPoliS rekonstruiert. Mit diesem wurden anschließend einerseits Simulationen zur Abschätzung des Einflusses von variierenden Opportunitätskosten des Faktors Arbeit durchgeführt, des Weiteren wurden die agrarstrukturellen Auswirkungen im Wechselspiel von volkswirtschaftlichem Wachstum und unterschiedlich gestalteten politischen Rahmenbedingungen untersucht. Die Ergebnisse zeigen, dass sich unter der Annnahme eines flexiblen, idealisierten Arbeitsmarktes starke Veränderungen in der Agrarstruktur und hinsichtlich des Einsatzes von Arbeitskräften im Landwirtschaftssektor ergeben würden. Derartige Bedingungen würden insbesondere überdurchschnittlich erfolgreichen Betrieben mit vorhandenem Wachstumspotential zum Vorteil gereichen. Sofern diese Wachstumsbetriebe aus der Gruppe der Einzelunternehmen stammen, zeigt sich, dass diese den steigenden Bedarf an Arbeitskräften durch Fremdarbeitskräfte decken würden. Der Beitritt zur EU und die damit einhergehende Implementierung eines Direktzahlungsregimes bewirkt, dass Betriebe, die ohne die neu geschaffenen Anreize aus dem Sektor ausgeschieden wären, kurz- bis mittelfristig in diesem verbleiben und den Strukturwandel hemmen beziehungsweise verlangsamen.Labour input,structural change,agent-based modelling,agricultural policy analysis,Landwirtschaftliche Beschäftigung,Strukturwandel,Agentenbasierte Modellierung,Politikanalyse

LAND MARKETS IN AGENT BASED MODELS OF STRUCTURAL CHANGE

Replaced with revised version of paper 02/22/08.Land Economics/Use, Research Methods/ Statistical Methods,

WINNERS AND LOSERS OF POLICY CHANGES – WHAT IS THE ROLE OF STRUCTURAL CHANGE?

In this paper several decoupling options are evaluated concerning their impact on structural change especially on farm incomes and their surviving. Therefore, the agent-based model AgriPoliS was used and extended to account the income of leaving farms. This enables the comparison of future incomes of leaving and surviving farms to find out whether leaving farms are losers or not. The disaggregated analysis of farms’ household incomes showed that leaving farmers even benefit from their decision in case that enough off-farm jobs are available. Losers are farms that would have left agriculture under conditions of the Agenda 2000. After decoupling they stay in the sector and cannot increase their income as much as under Agenda conditions. Furthermore, the analysis displayed a persistence of farms in the sector despite it would have been more profitable for them to quit agriculture.Structural change, decoupling, agent-based modeling, Common Agricultural Policy, Agricultural and Food Policy, Consumer/Household Economics, Farm Management,

EXPLORING THE ROLE OF SUCCESSION PATTERNS IN CENTRAL AND EASTERN EUROPEAN'S DUALISTIC FARM STRUCTURES

This paper analyses the interplay between farm adjustments on individual farms in dualistic farm structures over time using an agent-based simulation approach. In particular, explore the development of individual farms when there are off-farm work opportunities and different propensities of younger farm successors to take over the farm. Results show that despite of large numbers of individual farms leaving agriculture, the impacts on land use, production, and income are independent on different propensities to take over a farm.dualistic farm structures, individual farms, generation change, succession, Farm Management, Institutional and Behavioral Economics,

GAP-Reformvorschläge der EU-Kommission: Was sind die Auswirkungen einer Kappung der Direktzahlungen?

Mit der Reform der Gemeinsamen Agrarpolitik nach 2013 sollen Direktzahlungen innerhalb der EU unter Berücksichtigung der neuen Mitgliedsstaaten angeglichen und gegenüber dem Steuerzahler besser begründbar werden. Im Oktober 2011 stellte die EU-Kommission konkrete Reformvorschläge vor. Sie enthalten u.a. die Teilung der Direktzahlungen in eine Basis- und eine Ökologisierungskomponente (Greening) sowie die Einführung einer betrieblichen Obergrenze für Direktzahlungen unter Anrechnung gezahlter Lohnkosten (Kappung). Am IAMO durchgeführte Simulationsrechnungen zeigen exemplarisch die Auswirkungen der Legislativvorschläge für Betriebe in der Region Altmark im Norden Sachsen-Anhalts. Demnach verlieren selbst in dieser großbetrieblich strukturierten Region nur wenige Betriebe infolge der Kappung Direktzahlungen und das auch nur in beschränktem Maße. Teilweise basiert dies auf betrieblichen Anpassungsreaktionen, wie dem Ausbau arbeitsintensiver Verfahren. Allerdings bremst die Kappung das längerfristige Wachstum betroffener Betriebe, so dass im Zeitablauf die agrarstrukturellen Effekte der Kappung zunehmen. Beides führt zu Ineffizienzen sowie zu Wettbewerbsverzerrungen. Über diese Simulationsergebnisse hinausgehend sprechen weitere ökonomische und agrarstrukturelle Aspekte gegen eine Kappung von Direktzahlungen

Does structure matter? The impact of switching the agricultural policy regime on farm structures

This paper investigates the relationship between structural change in agriculture and a policy regime switch at the regional level. Using the agent-based spatial and dynamic simulation model AgriPoliS, we simulate structural change for two different farm structures in response to a policy change. Results show that structural adjustment differs depending on the initial structure

Impact of the introduction of decoupled payments on functioning of the German land market: Country report of the EU tender Study on the functioning of land markets in those EU member states influenced by measures applied under the Common Agricultura

Against the background of the reform of the Common Agricultural Policy (CAP) in 2003 the following analysis, brings into focus the responses of the agricultural sector to decoupled subsidies. In particular it addresses the impact of the Single Payment Scheme (SPS) on land sales and rent prices and therefore on farm structure. It also aims to assess the extent to which the reform advances sound and sustainable agriculture and provides incentives for marketorientated farming practices. The study is based on the analysis of statistical data and expert surveys conducted in three selected regions. -- G E R M A N V E R S I O N: Die vorliegende Studie untersucht den Einfluss der 2003 im Zuge der Reform der Gemeinsamen Agrarpolitik (GAP) durchgeführten Entkopplung der Direktzahlungen auf den Agrarsektor in Deutschland. Besonderer Fokus der Analyse liegt auf der Auswirkung der einmaligen Zahlungen auf die Kauf- und Pachtpreise für das landwirtschaftlich genutzte Land. Des Weiteren wird die Förderung einer nachhaltigen und marktorientierten Landwirtschaft durch die GAP-Reform bewertet. Die Untersuchung basiert auf Auswertung statistischer Daten und auf Expertenbefragungen, welche in drei ausgewählten Bundesländern durchgeführt wurden.Land markets,midterm review,CAP,structural change,Bodenmärkte,Halbzeitbewertung,GAP,Strukturwandel

The Political Economy of the 2014-2020 Common Agricultural Policy: An Imperfect Storm. CEPS Paperback, 17 August 2015

After five years of debates, consultations and negotiations, the European institutions reached an agreement in 2013 on the Common Agricultural Policy (CAP) for the 2014-2020 period. The outcome has major implications for the EU’s budget and farmers’ incomes but also for Europe’s environment, its contribution to global climate change and to food security in the EU and in the world. It was decided to spend more than €400 billion during the rest of the decade on the CAP.The official claims are that the new CAP will take better account of society's expectations and lead to far-reaching changes by making subsidies fairer and ‘greener’ and making the CAP more efficient. It is also asserted that the CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth. However, there is significant scepticism about these claims and disappointment with the outcome of the decision-making, the first in which the European Parliament was involved under the co-decision procedure. In contrast to earlier reforms where more substantive changes were made to the CAP, the factors that induced the policy discussions in 2008-13 and those that influenced the decision-making did not reinforce each other. On the contrary, they sometimes counteracted one another, yielding an ‘imperfect storm’ as it were, resulting in more status quo and fewer changes. This book discusses the outcome of the decision-making and the factors that influenced the policy choices and decisions. It brings together contributions from leading academics from various disciplines and policy-makers, and key participants in the process from the European Commission and the European Parliament