Global land use impacts from a subsidy on grassland-based ruminant livestock production in the European Union

Salwa Haddad, Neus Escobar, Martin Bruckner and Wolfgang Britz

No 333082, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Population growth, rising income and changes in dietary patterns have been main drivers of increased consumption of livestock products (OECD/FAO 2018). Global meat consumption is projected to rise further by 15% and milk production by 22% from 2018-2027 (OECD/FAO 2018). In parallel, conventional pasture-based systems are replaced by more indoor production in main producing regions, decreasing grazing areas and increasing concentrate use with soybean as the major protein source. In the European Union (EU), increased compound feed use implies higher dependence on soyban imports (EEA 2017). 8.8 million ha in South America are used to meet that demand in 2011 (EEA 2017), associated with loss of natural ecosystems, either directly or indirectly through subsequent land use substitutions (Fehlenberg et al. 2017). Substitution of traditional feedstock also led to unwanted loss of EU grasslands. The Common Agricultural Policy (CAP) has therefore established measures such as permanent pasture maintenance requirements (EC 2013); although positive effects are not yet evident (Gocht et al. 2016). Consequently, the European Parliament recently calls for reforms which boost the role of grassland in enhancing agricultural sustainability and ecosystems services. We quantify changes from a subsidy to grassland-based cattle meat production in the EU, financed by lower subsidies to cropland. We combine the GTAP model with a recently released Multi-Region Input Output database for bio-based products (Bruckner and Giljum, 2018), apply GTAP-AEZ, dissaggregate the EU to 280 regions and simulate against a baseline under SSP3 up to 2030. We find that the subsidy as expected extends land use and reduces concentrate fed use in EU cattle production. However, reduced competiveness of cropland reduces EU crop output and increases import dependence on soybeans. This also reflects limited reductions in EU pig, poultry and dairy production with rather stable per unit demand for feed concentrates.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333082

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