Predicting the effect of the Common Agricultural Policy post-2020 using an agent-based model based on PMP methodology

Lisa Baldi, Sara Calzolai, Filippo Arfini and Michele Donati

Bio-based and Applied Economics Journal, 2024, vol. 13, issue 4

Abstract: The objective of this study is to perform an ex-ante assessment of the poten-tial impacts of agro-environmental measures included in the post-2020 Common Agri-cultural Policy (CAP), by estimating farmers’ responsiveness in adopting organic agri-cultural practices and an eco-scheme that incentivises extensive forage systems. T his research is conducted by means of an Agent-Based Model (ABM), based on Positive Mathematical Programming (PMP), implemented in GAMS. T he ABM facilitates the simulation of interaction among farmers, allowing for an analysis of farm heterogene-ity. T he PMP methodology adds a non-rational dimention to the farmers’ economic drivers. T he model is calibrated using 2019 Farm Accountancy Data Network (FADN) data specific to the Emilia Romagna region in Italy. Our findings reveal significant impacts on land use, with a notable decrease in cereal cultivation in favour of protein and fodder crops. Moreover, structural shifts are observed, notably a decrease in the number of small-scale farms. We also assess environmental and economic implications, observing a modest reduction in CO2 equivalent emissions per hectare, an increase in water demand, and an overall economic stability among farms, as indicated by changes in gross margin per hectare.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2024
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