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Economic and Ecological Effects of the Green Deal in the Agricultural Sector -

A simulation study of the effects of the Farm-to-Fork strategy on production, trade, income and environment with the CAPRI model (F2F)

Funding

Members of the Green Club


Duration

2/2021 - 9/2021


Organisation

  • Prof. Dr. Dr. Christian Henning, Institut für Agrarökonomie, Abteilung Agrarpolitik, Christian-Albrechts-Universität Kiel
  • Dr. Peter Witzke, EuroCARE, Bonn
  • MSc agr. Lea Panknin, Institut für Agrarökonomie, Abteilung Agrarpolitik, Christian-Albrechts-Universität Kiel
  • Dr. Michael Grunenberg, Institut für Agrarökonomie, Abteilung Agrarpolitik, Christian-Albrechts-Universität Kiel
  • Overview

    According to the EU Commission, the Green Deal should be implemented based on the Farm to Fork Strategy (F2F), which was published in May 2020, as well as the EU's biodiversity and climate strategy. Therefore, the Grain Club has commissioned a study to analyze the effects of the F2F strategy on the production, consumption and trade of relevant agricultural products within the EU as a whole with particular focus on Germany. The analysis was conducted based on the CAPRI-model, which is a regionalized partial equilibrium model focused on the agricultural sector including environmental and land use effects induced by farm production. To include international trade flows and corresponding agricultural price effects the CAPRI sector model is linked with an international trading model. Based on new trade theory the trading model assumes that traded agricultural commodities are no perfectly homogeneous goods, but rather imperfect substitutes. Therefore, agricultural trade involves non-linear transaction cost and trade flows respond only limited to changed terms of trade (TOT), i.e. changed price relation on domestic and international markets. The F2F strategy will initially focus on the implementation of the Green Deal's agricultural main goals, which are defined as the following technical production restrictions and target values:

  • (1) Reduction of mineral fertilizer use by 20%
  • (2) Reduction of pesticide use by 50%
  • (3) Reduction of the N-balance surplus by 50%
  • (4) Share of ecological compensation conservation areas of at least 10%
  • (5) Share of organic farming of at least 25%

    Documents

    Ökonomische und Ökologische Auswirkungen des Green Deals in der Agrarwirtschaft Eine Simulationstudie der Effekte der F2F-Strategie auf Produktion, Handel, Einkommen und Umwelt mit dem CAPRI Model - Final REPORT15.8.2021