Assessing the world-wide effects of a shift towards vegetable proteins: a General Equilibrium Model of Agricultural Trade (GEMAT) and the Global Trade Analysis Project (GTAP)

The present system of food production has a considerable and rapidly increasing impact on the environment. Meat production, in particular, is not attractive from an environmental point of view, as a result of the inefficient animal conversion of feed into meat. However, meat is clearly attractive to consumers all over the world. Since the non-meat protein products presently on the market do not meet the expectations of most western-style consumers, they do not constitute realistic alternatives to meat. The prospects for replacing meat-derived ingredients by non-meat ingredients are more promising. The PROFETAS project (Protein Foods, Environment, Technology and Society) is a Dutch multidisciplinary research program on sustainable food systems, which includes researchers from the fields of plant breeding, food technology, economics, and environmental sciences. The central research question of the project is to what extent a shift from animal to plant protein foods can be environmentally more sustainable than present trends; technologically feasible; and socially desirable. Whereas the technical research concentrates on defining plant-based protein products that closely resemble meat ingredients in terms of taste, texture, and so on, the economic assessment concentrates on the consequences of such a transition for agricultural production and trade, and on its economic feasibility. A second objective is to contribute to the methodological development of AGE models in agriculture. Therefore, two models are being used. One is the GTAP model that, in PROFETAS, is used at the Agricultural Economics Research Institute (LEI) and is employed to trace changes in production, consumption, trade and welfare for EU countries, other regions of interest as well as the rest of the world. Although there are clear and well-known advantages of using GTAP, the “one size fits all” approach of having a single model framework for widely differing issues and regions clearly also has disadvantages. The underlying paper describes how the GTAP framework, and the second model (GEMAT), developed at the Centre for World Food Studies (SOW-VU) can contribute to understanding the likely effects of a transition. GEMAT changes some assumptions made within the GTAP model regarding agricultural production, trade, and consumption. In particular, the model includes different land types, with the possibility of conversion by investments; imposes physical constraints on the maximum attainable yield per ha for different crop types in different regions; explicitly incorporates constraints on feed composition for ruminants and monogastrics that follow from dietary requirements for these types of animals; models the production of many feed items as byproducts of the production of food; includes multifunctional agriculture as a means of promoting a production shift towards more environmentally-friendly production; and includes a projected meat demand pattern that shifts with changes in the distribution of income. In addition, there is no Armington assumption imposed to describe trade between countries. On the other hand, institutional elements of world agricultural trade, such as the EU Common Agricultural Policy, are not (yet) included in the model, and its empirical base is much weaker than that of the GTAP framework. Therefore, in this paper, GEMAT is used to show the effects of alternative model structures in the study of a transition from meat to NPFs, whereas GTAP simulations concentrate on changes in policy. The contributions of this paper are methodological as well as empirical. The results of the model exercises carried out with GEMAT reveal the importance of including the above-mentioned assumptions on agricultural production and consumption. GTAP provides the effects of general macroeconomic trends and political developments. In addition, the paper shows the importance of using different models to study different aspects of a complex problem, and as such, shows the limits of the "one size fits all" approach.