ASSESSING ECOLOGICAL AND ECONOMIC IMPACTS OF POLICY SCENARIOS ON FARM LEVEL

Markus Ehrmann

No 93949, 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 from German Association of Agricultural Economists (GEWISOLA)

Abstract: The paper deals with policy assessments on economic and ecological impacts of different policy scenarios. The existing farm group model FARMIS currently being used for the analysis of Common Agricultural Policy reforms (LEDEBUR et al., 2008; GÖMANN et al., 2009), has been extended to include policy analysis in the area of integrated assessment. This paper is based on modelling work realised within the EU research project “Sustainable Value Analysis of Policy and Performance in the Agricultural Sector” (SVAPPAS1). FARMIS is a comparative static model which uses Farm Accountancy Data (FADN) as the main data source (BERTELSMEIER, 2004; OFFERMANN et al., 2005). Further adaptation possibilities for farmers with regard to intensity classes of crop production and indicators were implemented. The economic and environmental indicators which can be derived from underlying farm accounting data considered here will be briefly described. The policy analysis based on FARMIS includes the following policy areas: a) environmental policy measures (fertilizer taxes and restrictions); b) direct payments (reduction of their level) and variation of input and output prices. Results are briefly summarized: A fertilizer tax mainly affects arable crop production, it influences which oilseeds and cereals will be reduced in favour of fodder crops and set-aside. A high reduction of income can be observed in this scenario. Restrictions on nitrogen surpluses mainly affect livestock production due to higher surplus figures. In terms of crop production, oilseeds will be reduced in favour of cereals and set-aside. Low intensity variants of crops increase whereas high intensity crop variants are reduced. The reduction of direct payments by 50 % induces negative income effects. Farm Net Value Added decreases, especially in crop farms by 23 %, in other cattle farms by 25 % and in mixed farms by 26 %. Crop production is reduced in favour of set aside. Positive income effects are induced by higher product price levels; however the environmental performance will become lower. Effects are the reverse for low product prices.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 16
Date: 2010-09
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi10:93949

DOI: 10.22004/ag.econ.93949

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