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Modelling land markets and land substitution in the IFM-CAP model (IFM_LandMarkets)

Improvement and extension of IFM-CAP (Individual Farm Model for the Common Agricultural Policy) model
Lot 1: Feasibility study on modelling land market and land substitution between arable and grassland at farm level


Joint Research Centre (JRC)


September 2016 - June 2017


Consortium ENgAGE (Expert Network for Agro-Economic modelling) represented by Stichting Dienst Landbouwkundig Onderzoek Foundation, loacted at Wageningen Economic Research (formerly LEI), The Netherlands

Consortium composed of

  • Stichting Dienst Landbouwkundig Onderzoek (St.DLO-LEI)

  • EuroCARE GmbH

  • Thünen Institute (TI)

  • Universität Hohenheim


The objective of this study is to propose a methodology for the IFM-CAP model that will allow modelling substitution between arable area and grassland, modelling land supply side of the agricultural land market and farmers' competition on the land market. In the current IFM-CAP model, arable and grassland are treated as fixed endowments and their corresponding levels in each single farm are derived from FADN data. Within each land category, activities are assumed to be fully substitutable. Replacing the linear land constraint implemented in the IFM-CAP by a land substitution function will allow simulating the switching between arable and grassland and provide a more accurate assessment of agri-environmental policies on land use.

Contributions of EuroCARE

EuroCARE GmbH contributes to the following tasks to be performed:

  • Selection and development of the methodological framework for modelling land use substitution between arable area and grassland.

  • Selection and development of the methodological framework for modelling agricultural land supply

  • Selection and development of the appropriate approach to model land market competition in IFM-CAP model

  • Empirical implementation and validation of the methodology

  • Technical training for IFM-CAP modelling team