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Update and Improvement of modelling features of the CAP for sustainability

-Modular Agricultural GeNeral Equilibrium Tool (MAGNET)

Funding

European Commission


Duration

6/2021 - 5/2022


Organisation

  • Stichting Wageningen Research with its research institute Wageningen Economic Research
  • EuroCARE
  • Johan Heinrich von Thuenen-Institute
  • Background

    The central role of EU’s agricultural sector and Common Agricultural Policy in the transition to a fair and prosperous society that responds to the challenges posed by climate change and environmental degradation, is strongly recognised in the European Green Deal, the new growth strategy for the EU. Feeding a fast-growing world population remains a challenge with current production patterns, because food production still results in air, water and soil pollution, contributes to the loss of biodiversity and climate change, and consumes excessive amounts of natural resources, while an important part of food is wasted. Consequently, a key element in the Green Deal is the upcoming ‘Farm to Fork’ strategy, which, building on the ‘Future of Food and Farming’ communication and legislative proposals shall design a fair, healthy and environmentally-friendly food system. The Farm to Fork Strategy will also contribute to achieving a circular economy. It will aim to reduce the environmental impact of the food processing and retail sectors by taking action on transport, storage, packaging and food waste. With a view to preserving and restoring Europe’s natural capital, the use of pesticides and fertilisers in agriculture has to be addressed in particular.Whereas the overall direction is clearly determined, the concrete implementation and (nearly) optimal policy mix is still subject to many open questions. Notably, how to ensure that nobody is left behind and positive perspectives for the rural areas are created, which relates in particular to the CAP objectives of ensuring a fair income to farmers, increasing competiveness, supporting generational renewal and creating vibrant rural areas. This project aims to improve the MAGNET model with a view to:

  • baseline consistency
  • short-run supply response
  • dietary and market analysis with regard to the aggregated vegetables&fruit
  • other food sectors
  • ad-hoc support for a more holistic analysis of the new CAP within the Green Deal
  • improve the model reaction to short-run shocks

    Overview

    The Modular Agricultural GeNeral Equilibrium Tool (MAGNET) is a multi-region computable general equilibrium model, which is a derivative of the well known Global Trade Analysis Project (GTAP) model and database. The GTAP model and its underlying database describe production, use and international trade flows of goods and services, as well as primary factor use differentiated by sectors. A key strength of the MAGNET model is that it allows the user to choose a la carte those sub-modules of relevance to a specific study. At the current time, the MAGNET model allows the user to (inter alia) choose between varieties of nesting structures, apply different assumptions about the workings of the factor markets, include different agricultural-, trade- and biofuels-policy mechanisms and incorporate dynamic assumptions relating to investment allocation over time periods.

    Aims and objectives

    This project aims to improve the MAGNET model with a view to:

  • baseline consistency
  • short-run supply response
  • dietary and market analysis with regard to the aggregated vegetables&fruit
  • other food sectors
  • ad-hoc support for a more holistic analysis of the new CAP within the Green Deal
  • improve the model reaction to short-run shocks