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EU-wide individual Farm Model for CAP Analysis (IFM-CAP): Application to Crop Diversification Policy

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  • Louhichi, Kamel
  • Ciaian, Pavel
  • Espinosa, Maria
  • Colen, Liesbeth
  • Perni, Angel
  • Gomez y Paloma, Sergio

Abstract

This paper presents the first EU-wide individual farm level model (IFM-CAP) intending to assess the impacts of CAP towards 2020 on farm economic and environmental performances. IFM-CAP is a static positive programming model applied to each EU-FADN individual farm to guarantee the highest representativeness of the EU agricultural sector and to capture the full heterogeneity across EU farms in terms of policy representation and impacts. The model is used to assess the effects of the crop diversification measure. Results show that most farms choose to comply with the diversification measure owing to the sizable subsidy reduction imposed in case of non-compliance. However, the overall impact on farm income is rather limited: farm income decreases by less than 1% at EU level, and only 5% of the farm population will be negatively affected. Nevertheless, for a small number of farms the income effect could be more substantial (more than -10%).

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  • Louhichi, Kamel & Ciaian, Pavel & Espinosa, Maria & Colen, Liesbeth & Perni, Angel & Gomez y Paloma, Sergio, 2015. "EU-wide individual Farm Model for CAP Analysis (IFM-CAP): Application to Crop Diversification Policy," 2015 Conference, August 9-14, 2015, Milan, Italy 212155, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212155
    DOI: 10.22004/ag.econ.212155
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    1. Espinosa, Maria & Gocht, Alexander & Heckelei, Thomas & Paloma, Sergio Gomez y, 2016. "Incorporating farm structural change in models assessing the Common Agricultural Policy: An application in the CAPRI farm type model," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1040-1059.
    2. Solazzo, Roberto & Pierangeli, Fabio, 2016. "How does greening affect farm behaviour? Trade-off between commitments and sanctions in the Northern Italy," Agricultural Systems, Elsevier, vol. 149(C), pages 88-98.

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