Assessing CC impacts on agricultural markets and farm income, public health and animal welfare

1
Assessing CC impacts on agricultural markets and
farm income, public health and animal welfare

• Roel Jongeneel Bettina Rudloff

2
Outline

• Economics of compliance
• Economic impacts
• indicators
• modelling
• Public health and animal welfare
• indicators
• modelling
• Points for discussion

3
Economics of compliance

• Comparison of systems necessary
• Choice of non-compliance save increased CC-costs
  (benefit) vs penalty (costs)

• CC
• changed enforcement of legal CC requirements
  
• penalty
• probability of detection?

• CAP
• legal CC requirements

changed degree of compliance?
4
Economic impacts - indicators

• Market
• Quantity changes
• Price changes
• Land allocation
• (partial) welfare changes
• Farm
• Income, gross margins
• Costs of compliance
• Other
• Administrative costs of control

5
Economic impacts - modelling
Simulation with CAPRI (Common Agricultural Policy
Regional Impact Analysis )
Supply, demand, prices
Market ModuleSpatialMulti-Commodity ModelWorld
divided in 18 regional aggregatesplus all EU
States
AggregatedSupply Feed demand
Herds, Acreages
Supply Module250 RegionalProgramming
Models Production activities
Post Model AnalysisWelfare analysis Land use
changesEnv. Indicators Energy use
Prices
Premiums
Policy ModulesCAP Premiums(base areas, ...)
HerdsAcreages
Premiums
6
Economic impacts -modelling

• 1. Cross compliance policy in CAPRI
• How to integrate CC
• Exogenous activities differentiated by
  compliance and non-compliance
• ? wheat 1 without CC, wheat 2 with full CC
• ? information on production activities under CC
  conditions
• ? integrating assessments/survey information on
  degree of compliance
• Endogenous decision on compliance and degree of
  compliance as result of simulation
• ? analysis of behaviour pattern why and why not
  complying
• Limitations
• specification of CC measures into production
  activities? ? public health measures?
• ? analysis single CC activities or whole package
• aggregation of farm reactions to CAPRI regions?

7
Economic impacts- modelling

• 2. Cross compliance impacts as part of CAPRI
• Economic
• Price and market changes
• Farm income
• (Partial) welfare
• Endogenous compliance level/ compliance behaviour
• Environmental impacts
• Regional nitrate balance
• Greenhouse gas emissions
• Energy consumption
• ? accuracy depends on specification
• Public health and animal welfare impacts
• depending on specification

other models/approaches needed
other models/approaches needed
8
Economic impacts - modelling

• Information needs
• Information need for endogenous compliance
  national differences in control samples, risk
  profiles
• ? define detection probabilities
• Information need for exogenous compliance some
  basis in LEI project Cross Compliance but
  complementary information needed
• Technological Information due to CC (evtl.
  changed input coefficients)

9
Outline

• Economics of compliance
• Economic impacts
• indicators
• modelling
• Public health and animal welfare
• indicators
• modelling
• Points for discussion

10
Public health and animal welfare impacts
General assumed impacts

• Economic impact
• some impacts identified in case studies of LEI
  project
• only partially to be integrated in CAPRI
• complemented by survey-approach

• Other impacts
• only few existing indicators

11
Public health and animal welfare impacts -
indicators

• Animal Welfare
• (1) Definition Five Freedoms of British
  Animal Welfare Council, 79
• Austrian Animal Needs Index? at farm level
• Methodological approach for developing an
  indicator
• Danish Institute of Agricultural Science
• farm level
• Contingent valuation methods to express
  consumers preferences on animal welfare

• Public Health
• Eurostat Task force
• Sustainable dev. indicators
• ? Incidence of food-borne diseases
• ? Chemicals management
• Control and inspections database
• (2) WHO
• Different food borne diseases
• ? outbreaks, incidence rates
• Food policy indices

• no state- but mainly impact or response
  indicators

12
Public health and animal welfare impacts -
modelling

• Limitations for modelling Public Health and
  Animal Welfare
• Integration into CAPRI limited
• Existing and already monitored indicators limited
• Implementing SMRs only currently started (animal
  welfare)
• surveys in case regions on economic effects and
  on impacts needed

13
Points for discussion

• Economic indices
• Are indicators missing?
• Investment?
• Economic model
• Linkage with other models (MITERRA)
• Exogenous/endogenous compliance?
• If exogenous best estimates of degree of
  compliance?
• If endogenous data on controls
• Aggregation problems in model
• Public Health and Animal Welfare
• Best existing indicators aggregation level
  (national or regional)?
• Best case regions for surveys and best level of
  actor ?(e.g. farm/downstream actor)