• Econometric modelling of the EU agri-food sector through co-operation with partners in the EU-AG-MEMOD Project

      Donnellan, Trevor; Hanrahan, Kevin; Riordan, Brendan (Teagasc, 2005-04-01)
      This research project set out to build an EU agricultural policy modelling system involving participants from right across the enlarged EU. Policy Analysis is conducted at an aggregate commodity level for the main sectors of EU agriculture. The work summarised here took place over the period 2001 to 2004. The implementation of the Luxembourg Agreement and the Enlargement of the EU will lead to significant changes to the way in which agriculture operates in the EU25. Under the reform, direct payments that have been linked to production are to be decoupled to varying degrees across the Union. Enlargement will mean that agriculture in several New Member States (NMS) will come under the EU system of payments, supply constraints and market price supports for the first time. In light of the above, the most common current approach to agriculture commodity modelling and policy analysis - that which treats the entire EU as a single entity - faces a considerable challenge. Given the heterogeneity of EU agriculture and agricultural policy across the enlarged EU, it is increasingly the case that ‘the devil is in the detail’. From a scientific perspective, country level policy analysis is important in order to capture the consequences of this heterogeneity. Moreover, at a political level, policy makers realise that policy proposals either sink or swim on the basis of the perception of their expected future impact at a national level. Hence, it is important to be able to inform and facilitate a debate on the relative merits of particular reform proposals by having national (or even sub-national) level analysis to hand. The case for national level modelling across the EU is easily made, but few practitioners have taken up the challenge it presents.i Key problems include funding constraints, the absence of reliable national data sources, difficulties in agreeing and co-ordinating a consistent modelling approach and, perhaps most importantly, the absence of an integrated network of economists with knowledge of local level agriculture and agricultural policy across the enlarged EU.
    • Economic Analysis of Policy Changes in the Dairy Sector

      Donnellan, Trevor; Fingelton, William (Teagasc, 2001-04-01)
      This study examines the effect of changes in agricultural policy and other important economic factors on the outlook for milk production in Ireland in future years. The analysis is conducted at an aggregate milk and dairy commodity level. A companion report provides similar detail on related farm level work. Following an initial period of development, the analysis summarised here took place over a period of three years. The potential effect of the European Commission’s proposed changes to the Common Agricultural Policy (CAP) under Agenda 2000 are examined, as is the eventual Agenda 2000 Agreement produced in Berlin in March of 1999. The implications for the dairy sector of differing future euro/dollar exchange rate paths are also analysed. A series of interlinked economic models capable of projecting key price and output variables were built for the main Irish agricultural commodities, including the dairy sector, and these in turn were linked with models for the EU and the World. It was thus possible to estimate the implications for the Irish dairy sector of supply, demand and policy changes at a world and EU level. It was found that the reform of the CAP in the dairy sector would lead to a reduction in the Irish milk price of 11 per cent relative to the outcome if the reforms were not introduced. However, increases in quota and the availability of compensation following from the Berlin Agreement should offset much of this decline. The effect of the future exchange rate between the euro and the US dollar was of significant importance. Other things being equal, a weaker euro made EU dairy exports more competitive outside of the EU, resulted in less pressure on the CAP budget and ultimately would produce more favourable milk prices than would be the case under a stronger euro. The analysis shows that a difference of 20 per cent in the euro/dollar exchange rate would result in a 7 per cent difference in milk price.
    • Economic Projections for the Dairy and Pig Sectors

      Donnellan, Trevor (Teagasc, 2002-12-01)
      This study examines the effect of changes in agricultural policy and other important economic factors on the outlook for milk and pig production in Ireland in future years. The analysis is conducted at an aggregate commodity level for the dairy and pig sectors. Companion reports provides similar detail on other agriculture sectors (including beef, sheep and cereals) and for the outlook at farm level. The analysis summarised here took place in 2001 and 2002. The potential effect of a change in international trade policy under the World Trade Organisation (WTO) agreement is examined. Specifically, the analysis assumed two different possibilities for the reduction and the elimination of export subsidies. Subsequently, the impact of a change in the EU’s extensification regime is examined. A series of interlinked economic models capable of projecting key price and output variables were built for the main Irish agricultural commodities, including the dairy and pig sectors, and these in turn were linked with models for the EU and the World. It was thus possible to estimate the implications for the Irish dairy sector of supply, demand and policy changes at a world and EU level. The Baseline analysis showed that under a continuation of current policy that by 2010, the Irish milk price is projected to decline to just over 25 euro per 100 kg. It was found that relative to the Baseline outcome for 2010: • a reduction in EU export subsidies in the dairy sector equivalent in scale to those introduced in the Uruguay Round Agreement would lead to a reduction in the Irish milk price of seven per cent by 2010 • an elimination of EU export subsidies in the dairy sector would lead to a reduction in the Irish milk price of 20 per cent by 2010 The Baseline analysis showed that, under a continuation of current policy, by 2010 the Irish pig sector value was projected to decrease by four per cent relative to its 2000 level. It was found that relative to the Baseline outcome for 2010: • a reduction in EU export subsidies in the agriculture sector equivalent in scale to those introduced in the Uruguay Round Agreement would lead to a reduction in Irish pig sector output value of less than two per cent • an elimination of EU export subsidies in the agriculture sector would lead to a reduction in Irish pig sector output value of eight per cent The implications of a reform of the extensification regime were not substantial. It was found that they fell for the most part on the beef and sheep sectors. The effect on milk and pig production was negligible.
    • European Network of Agr & Rural Policy Research (Enarpri)

      Donnellan, Trevor; Hanrahan, Kevin (Teagasc, 31/12/2006)
      The economic impact of trade policy reform receives less attention than the impact of trade policy on the environment. In part this may be due to the secondary importance attributed to environmental issues when economic consequences take centre stage. However, another consideration may be the difficulties of bringing together models which examine the economic impact of trade policy reform and models which can provide measures of environmental indicators. This study combines a partial equilibrium economic commodity model with a model for the estimation of agricultural input usage and GHG emissions. The paper examines one aspect of the relationship between trade policy and the environment, namely that between agricultural trade policy reform and indicators relating to emissions of Greenhouse Gases (GHG) from agriculture. The paper examines the impact of agricultural production levels and production practices on the level of GHG emissions from agriculture in Ireland under a Baseline of the recent reform of EU agricultural policy and an alternate scenario where trade policy reforms resulting from a future World Trade Organisation Doha Development Round agreement to reveal the extent to which there are significant environmental impacts which should be considered in addition to the conventional economic considerations.
    • Impact analysis of the CAP reform on main agricultural commodities

      Donnellan, Trevor; Hanrahan, Kevin; European Commission; 150267-2005-FIED-NL (Teagasc, 15/03/2007)
      This study has been carried out for the European Commission's Joint Research Centre to analyze agricultural policies at Member State, EU15 and EU25 levels as well as for Bulgaria and Romania. The modelling tool allows for projections and policy analysis (up to a 10 year horizon) for the enlarged EU.
    • Policy Analysis for the Irish Agricultural Sector: The impact of a WTO Agreement on the Irish Agricultural Sector

      Donnellan, Trevor (Teagasc, 01/01/2007)
      Using dynamically recursive partial equilibrium models of Irish, EU and World agricultural commodity markets, research undertaken under projects 5158, 5159 and 5160 formed the basis of the empirically based policy analysis that the FAPRI-Ireland aggregate sector modelling team, based at Rural Economy Research Centre (RERC), has provided to Irish and EU agricultural policy makers. Under the three projects (5158, 5159 and 5160), which began in January 2003, numerous analyses of CAP reform proposals and agreements were undertaken. The full details of all of the analysis conducted are given below and are available from the FAPRI-Ireland website www.tnet.teagasc.ie/fapri). In this end of project report the most recent analysis, relating to the possible impact of the still on going Doha Round of WTO negotiations is presented relative to a Baseline under which current agricultural and trade policy is assumed to continue unchanged over a ten year horizon (2006 to 2015).
    • Study on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Policy

      Donnellan, Trevor; Hanrahan, Kevin; Hennessy, Thia (Teagasc, 21/07/2008)
      Study on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Policy
    • WEMAC Project

      Donnellan, Trevor; Hanrahan, Kevin; European Commission (Teagasc, 01/01/2009)
      The WEMAC (World Econometric Model of Agricultural Crops) model is a model which has its origins at the French Research Institute INRA. Over the period 2006 to 2009 INRA, Teagasc and other partners worked on further developing the model as part of an EU Framework Project. This report details some of the project main results.