Ex-ante analysis of the regional impacts of the common agricultural policy:a rural-urban recursive dynamic CGE model approach
2013
ESPINOSA GODED Maria | PSALTOPOULOS Demetrios | SANTINI Fabien | PHIMISTER Euan | ROBERTS Deborah | MARY Sébastien | RATINGER Tomas | SKURAS Dimitris | BALAMOU Eudokia | CARDENETE M.Alejandro | GOMEZ Y PALOMA Sergio
A recursive dynamic regional Computable General Equilibrium (CGE) model is developed to assess the economic impacts of two Common Agricultural Policy scenarios in six NUTS-3 regions of the European Union. The main goal of the analysis is to assess the scenario effects (economic, change in production, prices, employment) in the rural and urban parts of these regions as well as on the different sectors. The two scenarios analyzed are related to a 30% reduction in Pillar 1 (market measures and direct support to farmers) support and the introduction of an EU-wide flat rate level of Pillar 1 support with a 45% decrease in Pillar 2 (Rural Development Policy) funds. Results show that the overall GDP effects are not significant, due to the relatively low importance of both the agricultural sector and Common Agricultural Policy spending in the regional economies. However, impacts on the agricultural sector are quite important and differ according to the nature of the policy shock. Also, the structural characteristics of each case study drive the results regarding the rural-urban and sectoral spill-overs, including impacts on region-specific agricultural activity.
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