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Scenario development and modelling of policy impacts Scenario development and modelling of policy impacts towards multifunctional agriculture towards multifunctional agriculture

in the EU project MEA Scope in the EU project MEA Scope ““MicroMicro--economic instruments for impact assessment of multifunctional ageconomic instruments for impact assessment of multifunctional agriculture to riculture to

implement the Model of European Agricultureimplement the Model of European Agriculture””

Annette PiorrAnnette Piorr

ForesceneForescene WS: WS: DevelopmentDevelopment of of corecore elementselements of of integratedintegrated sustainabilitysustainability scenariosscenarios forfor agricultureagriculture

Florence, October 19-20, 2006

Leibniz-Centre for AgriculturalLandscape Research Institute of Socio-economics

ForeScene workshop objectives (activity field „Agriculture“)

the ForeScene WS objectives

p long term visions on desired future- objective: multifunctional agriculture(- the MEA-Scope project )

- current realities of European agriculture

p essential elements for sustainability scenarios- Non Commodity Outputs (NCOs)- NCO demand by regional stakeholders

p requirements and measures towards reaching scenarios- drivers and measures from CAP policy makers´ perspective- experts`perspective from different European regions

p sustainability scenarios of agricultural land use in the MEA-Scope project- 3 MEA-Scope scenarios- policy scenario settings for modelling- examplary results for 2003 CAP reform impacts

outline


A PA Policyolicy Oriented Research Project (STREP) Oriented Research Project (STREP)

of the Sixth Framework Programmeof the Sixth Framework Programme

Response to FP6 Priority 8, B.1.1. Task 5:

„Developing further the multifunctionality concept and making it operational as a policy instrument“

Duration:Duration: MMay 2004 ay 2004 -- October 2007October 2007

Coordination:Coordination: Leibniz - Centre for AgriculturalLandscape and Land Use Research (ZALF),Müncheberg, Germany

Contact:Contact: [email protected]@zalf.de

Web site: Web site: http://www.meahttp://www.mea--scope.orgscope.org

Title : Title : MicroMicro--economiceconomic instrumentsinstruments forfor impactimpact assessment assessment

of of multifunctionalmultifunctional agricultureagriculture to to implementimplement thethe

Model of European Model of European AgricultureAgriculture

MEA-Scope project


Mugello (IT)

Combrailles (FR)

Piestany (SK)

Long term vision andrealities of European agriculture

River Gudena (DK)

Borsodi Mezoseg (HU)

Turew (PL)

Rhinluch (DE)

European realities:

• significant structural changes, particularly in thedairy and beef production sector

• abandonment, part time farming

• diversification of farms, activties in other sectorsdepending on rural-urban relationship

• ageing of farmers, migration of young people

• competetion between nature protection and production

• technological improvements allowing for integratedeconomic-environmental cropping management

farmers´ reactions on CAP:

individual solutions at the level of farm organisation and management intensity with various impacts at the level of single farms and of landscapes


MEA-Scope project task descriptionhttp://ec.europa.eu/research/fp6/ssp/mea_scope_en.htm

„...making sure the CAP fits“

p enable an adjustment of competetiveness within the EU

p consider the diversity of agricultural and socio-economicconditions

p take into account the strategic goals of • sustainable management of Europe’s natural resources• improving the health, security and opportunities for EU citizens• enhancing the economic potential and cohesion of an enlarging Europe

Long term vision:multifunctional agriculture


Impact assessment

• characteristics/ capabilities of 3 models• data availability• functions, NCOs, indicators• demand and supply side• behavioural changes = farm individual decisions

Impact assessment


The MEA-Scope scenario development

scenarios

CAP (2003 reform)

• set of instruments and measures• objectives• drivers• perspectives• expected future measures scenariosscenarios

CAP (2003 reform)

• set of instruments and measures• objectives• drivers• perspectives• expected future measures

An

aly

tica

la

ppro

ach

Su

rve

y

essential elements/measures• demand on NCOs• drivers• policy measures• potentials for NCO supply

Mo

de

lling

policy scenario settings• changes of agricultural land use• economic, environmental, social impacts

scenarios


Economic Miscellaneous, including costsGeneration of incomeRural entrepreneurial activities

EnvironmentGeneralClimate and reliefManagement practicesEnergy useEnvironmental quality, abioticPesticide useNutrient use Air qualitySoil qualityWater qualityWater availability(Agro)Biodiversity and habitats, bioticBiodiversityHabitatsLandscape and land useLandscape managementLandscape patternFarming systems (in Protected Areas)Grassland managementAbandonment of farmlandLandscape amenities

SocialCultural heritageMaintaining buildings/cultural landscapeTraditional (farming) practicesNon-farming activitiesEducational servicesNature conservation‘Care activities’Social infrastructurePopulation characteristicsEmploymentHealthConsumer interestsRecreation in rural areas/ tourismHealthy food/food safetyAnimal welfare

functions, NCOs and indicators for multifunctionality assessment(Waarts 2005)

elements/ measures: Non Commodity Outputs (NCOs)


– Provision of jobs

– Stimulation of small businesses

– Prevention of migration of young people

– Regional tourism

– Rural livelihood

– Regional food supply

– Regional food processing

– Production of safe food

– Stimulation of rural cultural activities

– Recreation in rural areas

– Keeping traditional socio-cultural identity

– Increased biodiversity

– Animal welfare

– Keeping the cultural landscape

– Soil fertility

– Hydroecological equilibrium

stakeholder demand

NCOs as elementsof scenarios forfuture sustainableRD and the role of agriculture

economic

socia

lenviro

nmental

elements/ measures: demand on NCOs


(Stolze et al. 2006)

elements/ measures: drivers

Drivers of the CAPp international trade liberalisation talks (Doha round)

p costs of the CAP

p society’s changing needs

– (e.g. food safety, environment, biofuel)

p rural economy/ development

EC end users: „Development of framework conditions“pppp Increased importance of boarder measures (tariffs)

pppp Structural change (number of farms)

pppp Budget restrictions

� Lower overall budget for CAP

� Decreased direct payments

� Single farm payments will be reduced, eventually phased out

� Smaller budget for funds


(Moschitz et al. 2006)

elements/ measures : the policy measures

Pillar 1

Decoupling (SAP, SFP)Cross ComplianceCeilings

Pillar 2 (New Rural Development Scheme)

axis 1 (competetiveness)axis 2 (environment)axis 3 (diversification)LEADER


Expected Implementation of Measures(EC end users: „Development of the CAP – important measures“)

Decoupled direct payments� Further shift towards de-coupled, green-box compatible payments

� Relative shift from pillar 1 to pillar 2

� Ceiling of direct payments (max. payment per farm)

� Stricter cross-compliance

� Payments linked to contractual obligations related to landscapemanagement, agri-environmental issues, animal welfare

� Direct payment partly based on standard labour input

elements/ measures: implementation of policy measures



Institutional change� Territorial approach: importance of cohesion objectives

� Regional diversification

� Localized policy instruments

� Individual contract payments for environmental services

� Payments to „land managers“, not only farmers (managing forests, roadsides, country parks)

� Agriculture becomes less important for rural development; othersectors might increase their role in income generation

Environment� Increased „green-box“ subsidies

� Contribution to climate change (emissions, C capture/storage, bioenergy)

elements/ measures: implementation of policy measures




MEA-Scope scenario development

framework foragricultural land usedecisions related to CAP

quadrant model modified from„Future Landscapes“(Artner et al. 2006)

intensification extensificationtrends and impacts

general

territorial/individual

implementation

Agenda 2000

compete-tiveness

the Scenarios

intensification extensification

general

territorial/individual



Agenda 2000

ruralviability

environment


general

individual

Pillar 1

1 Decoupling (SAP, SFP)2 Cross Compliance3 Ceilings

Pillar 2 (NRDS)

4 axis 1 (competetiveness)5 axis 2 (environment)6 axis 3 (diversification)7 LEADER

3

1

24

5

6, 7



Agenda 2000

the policies

Decouplingimpacts: structuralchange


general

individual

1

23

5

6, 7

4



Agenda 2000

Pillar 1

1 Decoupling (SAP, SFP)2 Cross Compliance3 Ceilings

Pillar 2 (NRDS)

4 axis 1 (competetiveness)5 axis 2 (environment)6 axis 3 (diversification)7 LEADER

compete-tiveness



general

individual

1

34

Scenariocompetetiveness:

88888888decoupling, impact: - specialisation- farm size: economy of scale

8axis 1 (4)- new technologies- bioenergy production

- spatial concentrationon productive sites

? „ urban/rural conflictsor challenges“



ruralviability

compete-tiveness



general

individual

1

334

6, 7 Scenariorural viability:

8LEADER (7), others (INTERREG)8axis 1 (4)8axis 3 (6)

- diversification- pluriactivity (tourism)- quality of food- territorial potentialsand strenghts

- networking, participatory processes

?„ not to reach the samequality/ level of rural viability, but an adequate“



Florence, Oct 2006

ruralviability

compete-tiveness


environment


general

individual

1

33

6, 7


52

Scenarioenvironment:8CC (2)

- Natura 2000- WFD, Nitrate Directive- GAEC

8axis 2 (5)- AEP, organic farming- diversity- low input farming on low productive sites

- recreation- set aside, wilderness- migration of inhabitants- territorial potentials

? „ new forms of urban users/rural producers“


Impact assessment


Impact assessment


scenarios

CAP (2003 reform)

• set of instruments and measures• objectives• drivers• perspectives• expected future measures scenariosscenarios

CAP (2003 reform)

• set of instruments and measures• objectives• drivers• perspectives• expected future measures

An

aly

tica

la

ppro

ach

Su

rve

y

elements/ measures• demand on NCOs•drivers• policy measures• potentials for NCO supply

Mo

de

lling

policy scenario settings• changes of agricultural land use• economic, environmental, social impacts

scenarios


Policy Scenario settings for modelling

MEA-Scope scenariosand policy scenario settings

compete-tiveness

ruralviability

environ-ment

structuralchange


S1: Liberation(end of decoupling, end of

Agri-Envir. Programmes)

S2: Liberation + Environment(end of decoupling, maintainance/ increase of

Agri-Envir. Programmes, Natura 2000)

Baseline: Agenda 2000(!998 – 2002)

Reference: Decoupling(Single Farm Payments/

Single Area Payments)

S3: Decoupling + ceiling(decoupling, ceilings,


S1: Liberalisation(end of decoupling, end of


S2: Liberalisation + Environment(end of decoupling, maintainance/ increase of


Baseline: Agenda 20001998 – 2002)





MEA-Scope scenarios:results case study Ost-Prignitz Ruppin, Germany

0 953

Agenda 2000 DECOUP/REGPREMAgriPoliS335 farms

MODAM4 farms

O-FC3:corporate farm, field crops, 1043 ha, 153 dairy

P-PC5:partnership, field crops, 688 ha

O-FC9:corporate farm, mixed livestock, 2205 ha

IF-OGL15:individual farm, grazing livestock, 185 ha

FASSET1 farm

P-PC5:partnership, field crops, 688 ha




S2: Liberation + Environment(end of decoupling, maintainance/ increaseof



Reference: Decoupling(Single Farm Payments/ Single Area Payments)





S2: Liberalisation + Environment(end of decoupling, maintainance/ increaseof








S2: Liberation + Environment(end of decoupling, maintainance/ increaseof






S1: Liberalisation(end of decoupling, end of


S2: Liberalisation + Environment(end of decoupling, maintainance/ increaseof
























Bas_0

Bas_9 Ref_9 S1_9 S2_9 S3_9

simulations on AgriPoliS for 5 policy scenariosover 9 years (Damgaard et al. 2007)



impact on farm structure (NUTS3)

0

500

1000

1500

2000

2500

0 2 4 6 8 10

Period

ha

farm size (mean)farm size (median)O-FC3P-FC5O-FC9IF-OGL15

0

500

1000

1500

2000

2500

0 2 4 6 8 10

Period

ha

Baseline: Agenda 2000 Reference: DECOUP (SFP)

O-FC3: corporate farm, field crops, 1043 ha, 153 dairyP-PC5: partnership, field crops, 688 ha

O-FC9: corporate farm, mixed livestock, 2205 haIF-OGL15: individual farm, grazing livestock, 185 ha



impact on farm size for selected farms (NUTS3)(Happe et al. 2006)

0

20

40

60

80

100

120

140

Total grassland

Grassland in production

Grassland basic

management

Dairy

Beef cattle

Suckler cows

Agenda 2000 - t=0

Agenda 2000- t=9

DECOUP - t=9

REGPREM - t=9



impact on husbandry and grassland use (NUTS3)

(Happe et al. 2006)

0

100

200

300

400

500

600

700

800

900

AWU

REF DECOUP REGPREM

Labour units in the sector t=0

Labour units in the sector t=9



impact on labour

(Happe et al. 2006)

0

10

20

30

40

50

60

70

80

90

100

Prevention of nitrate leaching

Prevention of N/P entries into w ater

Prevention of pesticide entries into w ater

Ground w ater recharge

Prevention of w ater erosion

Habitat quality red belly toad

Habitat quality skylark

Habitat quality f ield hare

Habitat quality hover f ly

Habitat quality w ild f lora species

Ref00

Ref09

RegPrem09

Decoup09

Farm: P-FC5



environmental impacts

due to introduction of environmental restrictions - example O-FC9:

corporate farm, mixed livestock, 2205 ha -

(Sattler et al. 2006)

conclusions

Florence, Oct 2006

p multifunctionality is an important contribution to sustainability

p non-commodity outputs (NCOs) are essential elements forsustainability scenarios for agriculture

p the diversity of European realities requires territorial focussing on objectives/ of measures

p CAP provides instruments and measures that allow forgeneral, territorial and individual implementation of policies

conclusions

Florence, Oct 2006

p policy advice and research issue is how and due to whatkind of regional conditions, potentials, structures, incentives,... a spatially and structurally meaningful(= sustainable) implementation is realized in practice

p modelling of scenarios delivers essential results for ex-ante assessment

p data availability needs improvement (NMS, socialindicators, multi-scale use)

p upscaling of simulation results on farm individual decisionmaking to higher scales will help to further develop thetargetting of policies

references

Florence, Oct 2006

references:

Damgaard, M., Osuch, A., Happe, K., Kjeldsen, C., Heinrich, U. (2006) unpublished.

Happe, K., Damgaard, M., Osuch, A., Sattler, C., Zander, P., Uthes, S., Schuler, J., Piorr, A. (2006): CAP-reform and the provision of non-commodity outputs in BrandenburgAgrarwirtschaft, German Journal of Agricultural Economics. 55, 5/6, 268-279

Moschitz, H., Stolze, M., Schader, C. (2006): unpublished

Sattler, C., Uthes, S., Reinhardt, F. (2006): unpublished

Stolze, M., Schader, C., Moschitz, H. (2006): Case study on regional differences in social demand for commodity and non-commodity concerns. Series of MEA-Scope reports. Volume 11. in prep.

Waarts, Y. (2005): Indicators for the quantification of multifunctionality impacts. Series of MEA-Scopereports . Volume 4. http://www.zalf.de/home_meascope/website/publications/mea-scope_vol4_indicators_for_multifunctionality.pdf

The MEA-Scope website

Series of MEA-Scope publicationsVol. 1-7 available, Vol. 8-13 to comepdf download

www.mea-scope.org


The MEA-Scope project


generalisation

individualisation

Thank youfor your attention


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