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Assessing Ecological And Economic Impacts Of Policy Scenarios On Farm Level

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  • Ehrmann, Markus

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.

Suggested Citation

  • Ehrmann, Markus, 2010. "Assessing Ecological And Economic Impacts Of Policy Scenarios On Farm Level," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93949, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi10:93949
    DOI: 10.22004/ag.econ.93949
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    1. Ottmar Röhm & Stephan Dabbert, 2003. "Integrating Agri-Environmental Programs into Regional Production Models: An Extension of Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 254-265.
    2. Offermann, Frank & Kleinhanss, Werner & Huettel, Silke & Kuepker, Bernd, 2005. "Assessing the 2003 CAP Reform Impacts on German Agriculture Using the Farm Group Model FARMIS," 89th Seminar, February 2-5, 2005, Parma, Italy 234635, European Association of Agricultural Economists.
    3. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    4. Bertelsmeier, M., 2004. "Analyse der Wirkungen unterschiedlicher Systeme von direkten Transferzahlungen unter besonderer Berücksichtigung von Bodenpacht- und Quotenmärkten," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 39.
    5. Louhichi, Kamel & Flichman, Guillermo & Blanco Fonseca, Maria, 2009. "A generic template for FSSIM," Reports 57463, Wageningen University, SEAMLESS: System for Environmental and Agricultural Modelling; Linking European Science and Society.
    6. Ledebur, Oliver von & Ehrmann, Markus & Offermann, Frank & Kleinhanss, Werner, 2008. "Analyse von Handlungsoptionen in der EU-Getreidemarktpolitik," Thünen Working Paper 126940, Johann Heinrich von Thünen-Institut (vTI), Federal Research Institute for Rural Areas, Forestry and Fisheries.
    7. Gomann, Horst & Kleinhanss, Werner & Kreins, Peter & Ledebur, Oliver von & Offermann, Frank & Osterburg, Bernhard & Salamon, Petra, 2009. "Health Check der EU-Agrarpolitik - Auswirkungen der Beschlüsse," Thünen Working Paper 102726, Johann Heinrich von Thünen-Institut (vTI), Federal Research Institute for Rural Areas, Forestry and Fisheries.
    8. von Ledebur, Oliver & Ehrmann, Markus & Offermann, Frank & Kreins, Peter, 2008. "Analyse von Handlungsoptionen in der EU-Getreidemarktpolitik," Arbeitsberichte aus der vTI-Agrarökonomie 13/2008, Johann Heinrich von Thünen Institute, Federal Research Institute for Rural Areas, Forestry and Fisheries.
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    1. Beadle, Brian, 2023. "The design and application of an agricultural sustainability index using item response theory," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 278112, July.

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