Sergio Gomez y Paloma

Farm Type Effects of an EU‐wide Direct Payment Harmonisation

In this study, we analyse how three scenarios involving different levels of harmonisation of common agricultural policy (CAP) decoupled payments in the EU affect the distribution of farm income across regions and farm types. We use the farm type extension of the common agricultural policy impact (CAPRI) model, which captures farm heterogeneity across the EU. The first scenario (NUTS1) assumes uniform per-hectare payments at the NUTS1 level. The second scenario (MS-CONV) equalises the per-hectare rates inside each Member State (MS) and partially harmonises the single payment scheme (SPS) across MS in line with the 2011 Commission proposal. The third scenario simulates a uniform per-hectare payment at the EU level. Depending on the implementation of the SPS, the NUTS1 flat rate induces a substantial redistribution of payments across farm types and NUTS2 regions, particularly in regions that apply the historical SPS. The MS-CONV and EU flat-rate schemes have more significant impacts at the EU-wide level. In the EU-15, almost all farms lose payments from MS-CONV and EU-wide flat rates, whereas in the EU-10, almost all farm types gain from these scenarios. Our conservative estimates indicate that the flat-rate payments could redistribute up to €8.5 billion. Lower land rental costs partially offset the losses of farm income in the EU-15 from payment redistribution. Land rents drop for all flat-rate scenarios across most sectors and farm sizes in the EU-15. In the less productive new MS, the landowners’ rental income is largely unaffected by the introduction of the flat rate.

Agricultural landscapes as multi-scale public good and the role of the Common Agricultural Policy

During the last 50 years, the Common Agricultural Policy (CAP) has impacted the evolution of European agricultural landscapes by driving changes in land use and farming practices. We propose a typology characterising the scales relevant for agricultural landscapes management and argue that action is required on three scales: (1) a landscape oriented management at the farm level; (2) the coordination of land managers’ actions at the landscape level; and (3) the conservation of the diversity of agricultural landscapes in the EU. We provide evidence that until now the CAP has mainly focused on the first scale. We also illustrate how agricultural policy could encourage coordinated actions at the landscape- and EU-scales. In particular, we propose policy instruments to coordinate actions of individual land owners (e.g. collective bonus in agro-environmental contracts or support to environmental cooperatives (scale 2)). We also analyse how the recognition and transposition of the European Landscape Convention could promote trans-frontier landscape cooperation in order, not only to conserve high-quality rural landscapes, but also to ensure the conservation of the diversity of EU landscapes (scale 3). This paper provides a knowledge base to support an integrated CAP design in the direction of improved landscape management, as an important component of the EU project towards more sustainable agriculture.

Food security in the context of climate change and bioenergy production in Tanzania: methods, tools and applications

A dramatic population growth is projected for the least developed countries of the world (United Nations 2013), which will also suffer disproportionally from ongoing and predicted climate disruptions (IPCC 2013). More frequently occurring extreme weather events have led to yield losses and decreasing cattle populations—aggravating an already precarious situation and leading to critical food shortages. Food security is a function of food availability, food accessibility, food stability and food utilisation (FAO 2002; Ziervogel and Ericksen 2010). Climate change and population growth are seen as key drivers of food insecurity severely affecting farming systems (Muller et al. 2011; Haberl et al. 2011, Strengers et al. 2010), as well as the global energy demand and therefore induced biofuel production (Von Braun 2007a), changing trade patterns through liberalisation and globalisation (Von Braun 2007b; Lotze-Campen et al. 2010), and the state of health of the population (10–20 % AIDS rate in East Africa). Cause– effect chains, in which food security is involved (droughts– diseases–health–human capital), are also drivers over large regions (Ziervogel and Ericksen 2010). Most of these drivers do not only lead to a productivity decline, but also often result in a degraded natural resource base and declining soil fertility (Graef et al. 2000). Rapidly changing framework conditions (Muller 2011) require a thorough understanding of integrated food systems and targeted incorporation of region-specific innovations. However, creating a sustainable road map for the future is a huge challenge for a variety of reasons. Mainly rainfed, subsistence-oriented smallholder farming systems are not only extremely vulnerable to a changing and unpredictable climate, but often also lack access to external inputs, institutional support and adaptive capacity. Moreover, food insecurity is often regarded as insufficient food availability which is only part of the picture. Instead of solely focussing on boosting crop yields, the highly complex state of vulnerability needs to be addressed encompassing economic and sociopolitical factors (Misselhorn 2004; Pretty et al. 2006). Also, increased bioenergy production has fuelled land use conflicts and lead to largescale deforestation due to the growing international demand for biofuels. Biomass is still the primary source of energy in developing countries—important for income, energy supply, poverty reduction and self-sufficiency of rural communities (Harvey and Pilgrim 2011; Mitchell 2011; Tilman et al. 2009). Effective climate change adaptation and food security intervention strategies need to pursue a holistic approach and an array of objectives: social and economic viability, soil health, minimum use of scarce water and fossil energy, affordable and low external inputs, improvement in infrastructure and market access, as well as conservation of natural resources and biodiversity. To achieve positive impacts and sustainable solutions, international research projects increasingly focus on integrated in-depth analysis of the food system itself and its core elements: (a) natural and human resources, (b) the use of Disclaimer The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission.

Prospects of the farming sector and rural development in view of food security: The case of the Russian Federation

As the recent situation on world food markets has been increasingly volatile and has been associated with relatively higher food prices, contributing to demonstrations and riots across the world, Russias agriculture has attracted much attention from economists, experts and policy-makers because they believe that the country could become the worlds largest and most reliable grain producer and exporter. In that context, the aim of this report is to evaluate the role of the Russian Federation towards fulfilling domestic food security and more importantly global food security in the short and medium run. In particular, the study aims at examining if Russian farms could substantially increase further their respective output and export levels. The methodology followed in this report is a bottom-up approach, i.e. going from the farm (i.e. microeconomic level) to the food market (i.e. macroeconomic level), that explicitly considers the analysis of food security at the farm level and therefore complements well other works which study the agri-food sector in Russia at a more aggregated level. The perspective of the report is made possible by the use of a wide range of farm-level databases that are, for most, only available to Russian researchers and allow going into a more disaggregated and detailed level of analysis.

Economics of Food Security: Selected Issues

The present article reviews selected key challenges regarding food security from both an academic and policy-oriented angle. In the analysis of the main constraints to achieve food access and availability in low and high-income societies, a detailed distinction is made between technological and institutional aspects. In the case of low-income economies, the emphasis is placed on the socio-economic situation and performance of small-scale farmers while in high-income economies the focus is shifted towards issues of price volatility, market stability and food waste. In both scenarios, productivity and efficiency in the use of resources are also considered. The objective of this assessment is to identify the type of policy support which would be most suitable to fulfil the increasing food demand. Innovation programmes and policies which integrate institutional coordination and technical support are put forward as strategic tools in the achievement of food security goals at regional and global level.

Farm level policy scenario analysis

This study presents a quantitative policy impact analysis of alternative policy and macroeconomic assumptions in the agricultural farming sector. Three scenarios are considered: direct payment scenario, macroeconomic environment scenario and WTO scenario. We apply the CAPRI-Farm model, an extension of CAPRI which disaggregates the standard Nuts2 regional resolution of the supply models in CAPRI further to farm type models, capturing farm heterogeneity in terms of farm specialization and farm size across all EU regions and MS. The advantage of the CAPRI-Farm model compared to other similar models is that it represents comprehensively all major farm types in the EU and it links farm level behaviour with output and input market price responses

European Farmers intentions to invest in 2014-2020: survey results

The present study aims to analyse farmers’ intentions to invest in the period 2014-2020. It focused on investments in land, machinery, building, training and quota and production rights. It provides up-to-date information on EU farm investment patterns, which is not otherwise available in traditional agricultural statistics (FADN, Eurostat Farm Structure Survey). Given the limitations of the sample, the data cannot be used to predict farm investment in EU-28 over the period 2014-2020, nor to evaluate to what extent CAP payments stimulate investment in EU farms. Nevertheless it contributes to the understanding of the determinants of investment decisions and farmers’ reaction to the EU Agricultural policy.

Ex-ante analysis of the regional impacts of the common agricultural policy:a rural-urban recursive dynamic CGE model approach

Abstract A recursive dynamic regional Computable General Equilibrium model is developed to assess the economic impacts of two Common Agricultural Policy (CAP) scenarios in six NUTS-3 (Nomenclature of Territorial Units for Statistics) (NUTS-1: major socio-economic regions, NUTS-2: basic regions for the application of regional policies, NUTS-3: small regions for specific diagnoses) regions of the European Union (EU). The main goal of the analysis is to assess the scenario effects (change in production, prices, income, employment) in the rural and urban parts of these regions as well as on the different sectors. The two scenarios analysed are related to a 30% reduction in Pillar 1 (market measures and direct support to farmers) support and the introduction of an EU-wide flat rate level of Pillar 1 support complemented by a 45% increase in Pillar 2 (Rural Development Policy) funds. Results show that the overall gross domestic product effects are not significant, due to the relatively low importance of both the agricultural sector and CAP spending in the regional economies. However, impacts on the agricultural sector are quite important and differ according to the nature of the policy shock. Also, the structural characteristics of each case study influence the rural–urban and sectoral spillovers, including impacts on region-specific agricultural activity.

Modelling Agri-Food Policy Impact at Farm-household Level in Developing Countries (FSSIM-Dev): Application to Sierra Leone

This report describes the generic template of a farm-household model for use in the context of developing countries in order to gain knowledge on food security and rural poverty alleviation under different economic conditions and agri-food policy options. This model, called FSSIM-Dev (Farming System Simulator for Developing Countries), is an extension of the FSSIM model developed within the SEAMLESS project. Contrary to most well-known household models which are econometric based, FSSIM-Dev is a non-linear optimization model which relies on both the general households utility framework and the farms production technical constraints, in a non-separable regime. It is referred to as a static Positive Mathematical Programming (PMP) which optimise at farm household level, with the opportunities to simulate the exchange of production factors among farm-households. FSSIM-Dev is designed to capture five key features of developing countries or/and rural areas: (i) non-separability of production and consumption decisions due to market imperfection; (ii) interaction among farm-households for market factors; (iii) heterogeneity of farm households with respect to their both consumption baskets (demand side) and resource endowments (supply side); (iv) inter-linkage between transaction costs and market participation decisions; and (v) the seasonality of farming activities and resource use. Model use is illustrated in this report with an analysis of the combined effects of rice support policy, namely fertiliser subsidy policy, and improved rice cropping managements (practices) on the livelihood of representative farm households in Sierra Leone. Results show that, first, the improvement of rice cropping managements is a key factor to boost significantly farm household income in the studied region. Second, the amount of N fertilizer required for, mainly, upland rice appears too high and costly and could not be applied by farm households without policy support (i.e. subsidies). Third, both the simulated rice policy and the improved crop managements would increase farm productivity and boost household income but they are not sufficient to fight poverty since most of the farm household types would continue to live below the extreme poverty line of 1 USD-equivalent per day.

Ex-ante Spatial Policy Impact Analysis of the Rural Development policy in European Rural Areas (RURAL ECMOD)

The present study aims at modelling the impact of different CAP (Common Agricultural Policy) scenarios on 6 case study regional economies. The starting point is the construction of a Social Accounting Matrix (SAM) obtained through a combination of mechanical downscaling of higher level input-output data with superior data, followed by a balancing procedure. A number of key elements facilitate the simulation of the policy scenarios: disaggregation of agricultural sector by farm size and the rural-urban disaggregation of activities and households. Policy scenarios focus on the impacts of relatively major changes in agricultural and rural policy (change in the balance between CAP pillars 1 and 2 or redistribution of funding within CAP pillar 2 – rural development policy). Models used are recursive dynamic CGE models, solved one year at a time, over the period 2006 to 2020. Policy measures are modelled on the base of RDP spending mapped for each region into investments in specific SAM sectors Economy wide effects of all scenarios remain limited, but slightly more important and significant when looking at the specifically rural economy. On the base of a limited number of case study areas, it seems that diversification policy mixes for rural development are in all cases beneficial to rural economies, while policy mixes focusing on agriculture competitiveness and public goods is only economically beneficial at short term and in rural, peripheral and agriculture-centred areas.