Dutch AG-MEMOD model; A tool to analyse the agri-food sector

Agricultural policies in the European Union (EU) have a history of continuous reform. AG-MEMOD, acronym for Agricultural sector in the Member states and EU: econometric modelling for projections and analysis of EU policies on agriculture, forestry and the environment, provides a system for analysing the impact of policy changes across the EU. Teams from each EU member state have developed models for the specific agri-food sector in their own country, which were reviewed by experts. Country-specific differences with regard to the operation of the agri-food sector and how each responds to external influences such as EU policies and world market prices have been carefully modelled. Not only CAP policy variables, but also economic and biophysical variables have been inserted. As all country models were built on a common format, they could be combined and run as an overall system for the EU. Hence, AG-MEMOD is able to analyse the impact of policy changes on individual member states, in all their diversity, as well as on the EU as a whole. This report describes the construction of the Dutch agri-food sector within the AG-MEMOD framework and summarises the specification, estimation and testing procedures applied to build the Dutch model. An application of the model is provided for a sugar policy reform. Although there is scope for improvements, the current model version can already produce reasonable projections for agricultural commodities in the Netherlands.