Maria Blanco

Impacts of the EU biofuel target on agricultural markets and land use: a comparative modelling assessment

The Renewable Energy Directive (2009/28/EC) requires that 20% of the EUs energy needs should come from renewable sources by 2020, and includes a target for the transport sector of 10% from biofuels. This report analyses and discusses the global impacts of this biofuel target on agricultural production, markets and land use, as simulated by three agricultural sector models, AGLINK-COSIMO, ESIM and CAPRI. The impacts identified include higher EU production of ethanol and biodiesel, and of the crops used to produce them, as well as more imports of both biofuels. Trade flows of biofuel feedstocks also change to reflect greater EU demand, including a significant increase in vegetable oil imports. However, as the extra demand is small in world market terms, the impact on world market prices is limited. With the EU biofuel target, global use of land for crop cultivation is higher by 5.2 million hectares. About one quarter is area within the EU, some of which would otherwise have left agriculture.

A Generic Bio-Economic Farm Model for Environmental and Economic Assessment of Agricultural Systems

Bio-economic farm models are tools to evaluate ex-post or to assess ex-ante the impact of policy and technology change on agriculture, economics and environment. Recently, various BEFMs have been developed, often for one purpose or location, but hardly any of these models are re-used later for other purposes or locations. The Farm System Simulator (FSSIM) provides a generic framework enabling the application of BEFMs under various situations and for different purposes (generating supply response functions and detailed regional or farm type assessments). FSSIM is set up as a component-based framework with components representing farmer objectives, risk, calibration, policies, current activities, alternative activities and different types of activities (e.g., annual and perennial cropping and livestock). The generic nature of FSSIM is evaluated using five criteria by examining its applications. FSSIM has been applied for different climate zones and soil types (criterion 1) and to a range of different farm types (criterion 2) with different specializations, intensities and sizes. In most applications FSSIM has been used to assess the effects of policy changes and in two applications to assess the impact of technological innovations (criterion 3). In the various applications, different data sources, level of detail (e.g., criterion 4) and model configurations have been used. FSSIM has been linked to an economic and several biophysical models (criterion 5). The model is available for applications to other conditions and research issues, and it is open to be further tested and to be extended with new components, indicators or linkages to other models.

Water Variability and the Economic Impacts on Small-Scale Farmers. A Farm Risk-Based Integrated Modelling Approach

Strengthening the planning of hydrological resources to optimize the use of water in agriculture is a key adaptation measure of the Chilean agricultural sector to cope with future climate change. To address this challenge, decision-makers call for tools capable of representing farmers’ behaviours under the likely stresses generated by future climate conditions. In this context, of special concern are the effects of water variability on small-scale farmers, who commonly operate with narrow profit margins and who lack access to financial resources and technological knowledge. This paper sheds light on the economic impacts of changes in water availability on small-scale agriculture. We provide a hydro-economic modelling framework that captures the socio-economic effects of water shocks on smallholders in the Vergara River Basin, Chile. This approach links a farm risk-based economic optimization model to a hydrologic simulation model adjusted for the basin. Our results indicate that at the aggregated level, there will be minor economic impacts of climate change on the basin’s small-scale agriculture, with small decreases in both expected utility and wealth. However, large differences in the economic impacts of wealthy and poor small-scale farmers are found. Changes in water availability, reduce the options of land reallocation to increase farmer’s expected utility, being the poor small-scale farmers the most negatively affected.

Water availability in the Mediterranean region

Nature and agriculture both shape the European countryside and one of the main challenges for the years to come will be to strengthen their interaction for the future development of rural areas. In this valuable and highly topical book, the authors demonstrate how economics and ecology can play a critical role in maintaining and sustaining this relationship. The book identifies the dilemmas facing European agriculture and explores their economic and ecological consequences. The authors believe a better understanding of these problems will be crucial in recognising the potential options for the future role of agriculture and nature policy and will guide the identification of suitable policy instruments.

The economic impacts of climate change on the Chilean agricultural sector: A non-linear agricultural supply model

Agriculture could be one of the most vulnerable economic sectors to the impacts of climate change in the coming decades, with impacts threatening agricultural production in general and food security in particular. Within this context, climate change will impose a challenge to policy makers, especially in those countries that based their development on primary sectors. In this paper we present a non-linear agricultural supply model for the analysis of the economic impacts of changes in crop yields due to climate change. The model accounts for uncertainty through the use of Monte Carlo simulations about crop yields. According to our results, climate change impacts on the Chilean agricultural sector are widespread, with considerable distributional consequences across regions, and with fruits producers being worst-off than crops producers. In general, the results reported here are consistent with those reported by previous studies showing large economic impacts on the northern zone. However, our model does not simulate remarkable economic consequences at the country level as previous studies did.

Synergies between agriculture and bioenergy in Latin American countries: A circular economy strategy for bioenergy production in Ecuador.

This study quantifies the synergies between agriculture and bioenergy considering biodiesel production as part of a set of systemic initiatives. We present a case study in Ecuador taking into account the recent government measures aimed at developing the bioenergy sector. Four scenarios have been evaluated through a newly designed systemic scheme of circular-economy initiatives. These scenarios encompass three production pathways covering three energy crops: palm oil (PO), microalgae in open ponds (M1) and microalgae in laminar photobioreactors (M2). We have applied Benefit-Cost Analysis (BCA) methodology considering the Net Present Value (NPV) and the Benefit-Cost Ratio (BCR) as the main evaluation criteria. In terms of private investment, biodiesel production from PO is more attractive than from M2. However, regarding efficiency and effectiveness of public funds, M2 is superior to PO because the public BCR and NPV are higher, and the pressure on agricultural land is lower. Moreover, M2 as part of a systemic approach presents a better carbon balance. These findings show that, under a systemic approach based on circular economy, strategies like the one analyzed in this study are economically feasible and may have a promising future.

Extension of the CAPRI model with an irrigation sub-module

The study enables the CAPRI model to make simulations of the potential impact of climate change and water availability on agricultural production, as well as is looking at the sustainable use of water and the implementation of water-related policies including water pricing. To investigate the role of irrigation as adaptation strategy to climate change, we define a set of simulation scenarios that account for the likely effects on water price, crop yields, water availability and irrigation efficiency.

Exploring the feasibility of integrating water issues into the CAPRI model

Although numerous modelling efforts have integrated food and water considerations at the farm or river basin level, very few agro-economic models are able to jointly assess water and food policies at the global level. The present report explores the feasibility of integrating water considerations into the CAPRI model. First, a literature review of modelling approaches integrating food and water issues has been conducted. Because of their capability to assess the impacts of water and food policies at the global level, three agro-economic models (IMPACT, WATERSIM and GLOBIOM) have been analysed in detail. Second, the potentiality of CAPRI to model water has been assessed. Thanks to the programming approach of its supply module, CAPRI shows a high potentiality to integrate environmental indicators as well as to enter new resource constraints (land potentially irrigated, irrigation water) and input-output relationships. At least in theory, the activity-based approach of the regional programming model in CAPRI allows differentiating between rainfed and irrigated activities. The suggested approach to include water into the CAPRI model involves creating an irrigation module and a water use module. The development of the CAPRI water module will enable to provide scientific assessment on agricultural water use within the EU and to analyze agricultural pressures on water resources. The feasibility of the approach has been tested in a pilot case study including two NUTS 2 regions (Andalucia in Spain and Midi-Pyrenees in France); its choice having been mainly motivated by data availability. Preliminary results are presented, highlighting the interrelations between water and agricultural developments in Europe.

Implications of climate change for semi-arid dualistic agriculture: a case study in Central Chile

The nexus between climate change, agriculture, and poverty has become a major topic of concern, especially for dry regions, which represent a large share of the world’s population and ecosystems vulnerable to climate change. In spite of this, to date, few studies have examined the impacts of climate change on agriculture and the adaptation strategies of vulnerable farmers from emerging semi-arid regions with dualist agriculture, in which subsistence farms coexist with commercial farms. This study aims to assess the micro-level impact of climate change and the farm household adaptation strategies in a semi-arid region in Central Chile. To this end, we develop a modelling framework that allows for (1) the assessment of farm-household responses to both climate change effects and adaptation policy scenarios and (2) the identification of local capacities and adaptation strategies. Aggregated results indicate that climate change has a substantial economic impact on regional agricultural income, while the micro-level analysis shows that small-scale farm households are the most vulnerable group. We observe that household characteristics determine to a large extent the adaptation capacity, while an unexpected result indicates that off-farm labour emerges as a powerful option for adapting to climate change. As such, our approach is well suited for ex ante micro-level adaptation analysis and can thereby provide useful insights to guide smart climate policy-making.