Evaluating CAP alternative policy scenarios through a system dynamics approach in rural areas of Greece

Current considerations for the post-2013 CAP create the need for the investigation and evaluation of alternative CAP scenarios and their effects on agriculture, environment and regional development in EU rural areas. To this end, a system-dynamics model is developed and utilized to evaluate the impacts of alternative CAP scenarios in a Greek rural area (prefecture of Trikala). This particular model features four basic subsystems (agriculture, environment, regional economy and human resources) specified and analyzed through a linear programming model, a dynamic input-output model and an age-cohort demographic model, respectively. Four alternative policy scenarios are specified, dealing with possible developments on Pillars 1 and 2. Model simulations produce scenario-specific effects for the 2007-2013 period, and up to 2020 in the form of changes in land use and farm output, environmental indicators associated with farm activity, economy-wide impacts and impacts on local population. Results show that different future orientations for the CAP are associated with different impacts on agricultural activity, the environment and total economic activity in this area. A reduction of Pillar 1 funds and a dedication of Pillar 2 spending on Axis 2 generate negative effects on local agriculture, but benefit the local environment and economy-wide incomes. On the other hand, a more “productive” orientation of Pillar 2 positively affects local employment (compared to the current CAP) but does not create any positive or negative effects on the environment of this region