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Modelling The Effect Of Eu Policy Reforms On Farm Investment Behaviour

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  • Gallerani, Vittorio
  • Gomez y Paloma, Sergio
  • Raggi, Meri
  • Viaggi, Davide

Abstract

The objective of this paper is to analyse farm strategies and investment behaviour in a sample of selected Italian farm-households facing different scenarios, with a particular focus on the effects of the 2003 CAP reform. Models were built for individual households using multi-criteria dynamic programming, including investment choice. A total of 24 farms were selected for modelling, all located in Emilia Romagna (Italy). The simulations show a strong effect of both policy and markets scenarios on household investment, though the latter seems more relevant than the former. However, decoupling itself shows minor effects in the majority of cases. The models offer useful insights about the mechanisms of adaptation and their implications for the effects of policies. The main drawbacks are in the heavy data collection and computational requirements, and in the related difficulties to achieve a satisfactory degree of representativeness.

Suggested Citation

  • Gallerani, Vittorio & Gomez y Paloma, Sergio & Raggi, Meri & Viaggi, Davide, 2008. "Modelling The Effect Of Eu Policy Reforms On Farm Investment Behaviour," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6444, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6444
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    File URL: http://purl.umn.edu/6444
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    References listed on IDEAS

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    1. Michael T. Wallace & Joan E. Moss, 2002. "Farmer Decision-Making with Conflicting Goals: A Recursive Strategic Programming Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(1), pages 82-100.
    2. Cornelis Gardebroek & Alfons G.J.M. Oude Lansink, 2004. "Farm-specific Adjustment Costs in Dutch Pig Farming," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(1), pages 3-24.
    3. van Asseldonk, M. A. P. M. & Huirne, R. B. M. & Dijkhuizen, A. A. & Beulens, A. J. M., 1999. "Dynamic programming to determine optimum investments in information technology on dairy farms," Agricultural Systems, Elsevier, vol. 62(1), pages 17-28, October.
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    Cited by:

    1. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    2. O’Toole, Conor & Hennessy, Thia, 2015. "Do decoupled payments affect investment financing constraints? Evidence from Irish agriculture," Food Policy, Elsevier, vol. 56(C), pages 67-75.

    More about this item

    Keywords

    CAP reform; decoupling; investment; multicriteria; dynamic; models; Agricultural and Food Policy; Agricultural Finance; Farm Management;

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