The problem

Two recent developments are likely to have a profound impact on European agriculture. One is the enlargement of the European Union, which has increased the diversity of natural and socio-economic situations within the EU agricultural sector. The second is a policy shift from production-coupled support to a single ‘decoupled’ payment per farm, linked to compliance with environmental, animal welfare, food safety, and occupational safety standards. To assess the impact of these changes on farmers, land use, the environment, and the agri-food industry, EU policymakers need high-performance tools.

Overview:

The IDEMA project aims to provide a comprehensive socio-economic assessment of the impact of decoupling and ‘modulation’ (reduced payments to large farms so as to finance the new rural development policy) on the EU farm sector. The partners have adopted three complementary approaches:

• A survey-based analysis of farmers’ strategic decisions (entry into/exit from farming, on- and off-farm investments)
• Dynamic farm-level and regional modelling with an enhanced model (AgriPoliS) adapted to selected regions representative of EU diversity, to assess farm incomes and efficiency
• Sector-level and general equilibrium modelling

Contribution to policy development:

• Methods and tools for the comprehensive assessment of socio-economic impacts of decoupling and modulation
• Quantitative analysis of the likely impacts of new Common Agricultural Policy instruments on supply, demand, trade, commodity prices
• Analysis of impacts on farmers’ strategic decisions
• Assessment of impacts on farm incomes, localisation of production, land use and management, and the environment (landscape, input use)

Project deliverables

• Survey instrument to analyse the strategic behaviour of farmers, for a survey of farmers in five countries, and a database of farmers’ responses – August 2005
• Enhanced version of the farm-based spatially dynamic model AgriPoliS – December 2005
• Validated models adapted to a selection of regions – March 2006
• Environmental module integrated into AgriPoliS – December 2006
• Further development of a partial equilibrium model (ESIM) and of country-specific general equilibrium models – June 2005

Dissemination

• Project website – ongoing
• Twenty-one working papers, two progress reports, an interim report (December 2005), and a final report (December 2006)
• Workshops and conferences – ongoing
• Publication in specialised journals; participation in international seminars and conferences – ongoing

Technical information

Project acronym: IDEMA
Project’s official full title: The Impact of Decoupling and Modulation in the Enlarged Union: a sectoral and farm level assessment
Research priority: 1.1. Modernisation and sustainability of agriculture and forestry, including their multifunctional role in order to ensure the sustainable development and promotion of rural areas
Specific webpage: http://www.sli.lu.se/eng/idema/idemahome.asp
Proposal/contract no: 502171
Start date: 1 January 2004
Kick off meeting: Not yet available
Completion date: 31 December 2006
European Commission scientific officer: Hans-Jörg Lutzeyer (lutzeyer.hans-jorg@ec.europa.eu)

Coordinator:
Name: Swedish Institute for Food and Agricultural Economics
Abbreviated name: SLI
Address: Box 730
220 07 Lund
Country: Sweden
Tel: +46 46 2220783
Website: http://www.sli.lu.se/

Partners

Name: Imperial College of Science, Technology, and Medicine
Abbreviated name: Imperial
Country: United Kingdom

Name: Institute of Agricultural Development in Central and Eastern Europe
Abbreviated name: IAMOl
Country: Germany

Name: Polytechnics University of Marche
Abbreviated name: UNIAN
Country: Italy

Name: Institut für Agarökonomie der Universität Göttingen
Abbreviated name: IFA-GOE
Country: Germany

Name: Institut National de la Recherche Agronomique
Abbreviated name: INRA-ESR
Country: France

Name: Research Institute of Agricultural Economics
Abbreviated name: VUZE
Country: Czech Republic

Name: Lithuanian Institute of Agrarian Economics
Abbreviated name: LAEI
Country: Lithuania

Name: Research Institute of Agricultural and Food Economics
Abbreviated name: VUEPP
Country: Slovak Republic