The Impact of Pillar II Funding: Validation from a Modelling and Evaluation Perspective

Abstract

We extend the Common Agricultural Policy Regionalised Impact Modelling System (CAPRI) with a regional computational general equilibrium (CGE) model to estimate the effects of the Pillar II of the Common Agricultural Policy. Our aim is to assess the modeling approach by comparing the scenario results with observations from the evaluation reports for rural development, supplemented with expert interviews and findings from the literature. For this purpose, an ex‐post scenario is developed for Germany that models the effect of the Pillar II measures in 2006. We observe a moderate impact, namely, an increase in agricultural income (5%) and agricultural land use (0.15%), particularly grassland, and a substitution of arable land with grassland. This effect leads to a total increase in agricultural production, particularly of beef, and to an increase in total greenhouse gas emissions and total nitrogen surplus for Germany. Greenhouse gas emissions and nutrient surpluses per ha, however, are reduced. We observe that farm investment programmes displace private investment. The evaluation reports confirm the moderate impact and our major results, as does the comparison with other literature. However, the conclusions about agri‐environment measures and their impact on income differ. The most important difference between our results and the evaluation reports and majority of the present literature is that we also quantify the joint effect between the whole economy and policy measures, with some contradictory effects.

Representation of decision-making in European agricultural agent-based models

“…Agent-based modelling approaches in the European agricultural sector potentially have many advantages. In particular, the "bottom up" approach, through considering heterogeneity in decision-making and representing spatial and social interactions, complements other scientific policy evaluation tools such as integrated assessment tools (van Ittersum et al, 2008), (partial) equilibrium models (Schroeder et al, 2015), economic experiments (Colen et al, 2016) or econometric approaches (Imbens and Wooldridge, 2009).…”

Reviewing Counterfactual Analyses to Assess Impacts of EU Rural Development Programmes: What Lessons Can Be Learned from the 2007–2013 Ex-Post Evaluations?

“…However, some applications can be found in the literature. Within the Common Agricultural Policy Regional Impact Analysis (CAPRI) modelling system [45], a rural development module which combines regional computable general equilibrium (CGE) models and mathematical programming (MP) approaches was developed and was tested to estimate ex-post RDP impacts in Germany [46]. This advanced simulation model, based on behavioural assumptions and exogenous parameters, allows for implementation of the counterfactual approach as it is designed to construct alternative agricultural scenarios in comparison with a baseline scenario.…”

Income inequality among minority farmers in China: Does social capital have a role?

“…More grassland can increase the ownership of sheep and other livestock, which can increase farmers' income growth through the sales of livestock and livestock products (Gao, Kinnucan, Zhang, & Qiao, 2016;Schroeder, Gocht, & Britz, 2015). Good quality grassland is not available in the Xinjiang province; therefore, we assume that the effect of grassland on income inequality is not significant.…”