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Faculty of Agriculture

You are here: ILREconomic and Agricultural PolicyResearch CAPSTRAT (2001-2004)

CAP-STRAT: Objectives

In the context of the FAIR project "Common Agricultural Policy Regional Impact Analysis" (CAPRI), a regionalised agricultural sector model linked to a data base at NUTS II level (about 200 regions) had been developed in the years 1997-1999. The system has proven to be operational by simulating an Agenda 2000 scenario late 1999. Data base, model, and simulation results were presented to the commission at the final meeting. Given the expressed interest of DG-AGRI to apply the CAPRI system to policy analysis, this proposal aims at the application of the system to the main CAP challenges of the decade ahead:

  • further CAP reform steps in the field of "grandes cultures" in direction of de-coupling,

  • support of environmentally friendly production systems through regionalised policy implementation, and

  • the review and potential re-design of dairy market regulations.

The aim of the project is the application of a complex agricultural modelling system to the evaluation of policy options for the CAP which are defined in close co-operation with DG-AGRI. The modelling system and the related data base will not be built from scratch, but instead be based on the existing CAPRI data base and modelling system whose main features are (1) activity based supply models based on Positive Mathematical Programming, (2) regionalisation at NUTS II level (200 regions) and (3) iterative coupling of the individual supply models with a multi-commodity market model.

Accordingly, the work plan aims at ameliorating, adjusting and updating the existing system according to the requirements of the policy scenarios envisaged in the proposal. The work can be broken down into four interrelated tasks with specific work packages attached to them:

Task 1: Data Base Amelioration and Update.

Task 2: Methodological Improvements of the Existing Modelling System.

Task 3: Comprehensive Validation of the Resulting Modelling System.

Task 4: Scenario Writing and Application of the System.

The successful application of a complex agricultural sector model in simulation runs requires up-to-date data information, an operational system which provides politically relevant variables in short response times to scenario formulations, and the reliability of the economic allocation mechanisms. Consequently, the scientific contributions of the project are closely linked to methodological improvements and the validation of the existing modelling system necessary to obtain and apply a useful tool for the simulation of policy relevant scenarios. They comprise

  • the application of entropy techniques to estimate activity related input demand functions from FADN data.

  • further theoretical and methodological development of CAPRI's regional supply models system regarding "Positive Mathematical Programming", Mediterranean cultures, the cattle sector and environmentally friendly production systems.

  • enhancement of the market module by disaggregating the "rest of world" into major production regions and switching to a gross-trade representation, and

  • a systematic validation of the whole modelling system by ex-post simulations and sensitivity analysis.

In the last phase of the project, an intensive dialogue with DG-AGRI on the formulation of relevant political scenarios is envisaged. The modelling system will then be applied to the agreed upon scenarios and results presented to and discussed with representatives from the commission.

According to its aims, and in order to underline the close relation to CAPRI, the project is termed "CAP-STRAT" - Common Agricultural Policy Strategy for Regions, Agricultural and Trade.

Last updated: Thursday, September 04, 2014