AG-MEMOD
Agricultural sector in the Member States and European Union: Econometric modelling for projections and analysis of EU policies on agriculture, forestry and the environment

The purpose of this project is to integrate agri-food sector analysis to provide results for the European Union. Econometric models will be constructed in each Member State and these models will link together and produce results for the EU. This EU composite model will show the impacts of policy, and other changes, up to a ten-year horizon. Projections would include those for major agricultural products, inputs, direct payments, agricultural incomes, forestry, environmental indicators and EU budget expenditure. There will be sector-wide participation in validation of models and projections. This review process will also speed and intensify the up-take of projections and forward-looking analysis - a process to be enhanced by a communication strategy. The ultimate benefits will be through improvement in the information available for decision-making in the face of increased pressures on this sector.

Objectives
The aim is to improve information support for decision-making at all levels by mobilising and integrating Member States' capacities for forward-looking analysis. The prime application would be the estimation of the potential impact of proposals for policy change on agriculture, food, forestry, environmental indicators, and on the EU budget. The overall objective is to develop an econometric model of the EU consisting of 14 individual country models. These are to be established, validated and used by the countries' economists, advised by their experts on markets and the sector. The next objective is to have this EU composite model generate, year by year, projections over a ten-year horizon, to show the impact of policy changes (and other external stimuli) on the sector at EU and country levels. In addition, the partners who have recently joined the EU will also build related models of agricultural product markets to expand coverage of the analysis. The final objective is to involve all concerned with the agri-food sector in this forward-looking analysis and, thus, improve the quality of information for decision-making.

Progress to Date
Econometric models have been estimated for 14 EU countries accounting for over 99% of agricultural output in the EU15. These models are being validated and linked together to form a combined model for the EU. Scenarios for analysis are being formulated, including a 'no policy change' or 'baseline' scenario, and policy change scenarios. These are about to be used to show the likely impact of the proposed changes each year over a ten-year horizon. At the same time, recently joined partners have started to establish similar models for their countries.
The main achievement to date has been the establishment of the modelling framework, and the estimation and building of the initial econometric models.

Classified in FORESTRY, CAP AND RURAL DEVELOPMENT, QUANTITATIVE APPROACHES AND MODELLING

Scientist responsible for the project