The objective of the Support to Agricultural Trade and Market Policies (AGRITRADE) action is to support the European Commission services, in particular the Directorate-General for Agriculture and Rural Development, with quantitative analysis of the Common Agricultural Policy (CAP) reform, commodity markets and trade liberalisation processes.
The dynamic development of agricultural commodity markets with high prices and food shortages requires permanent monitoring and prospective analysis. From a European perspective it is important to analyse the impact of global driving forces and the ongoing reform of the CAP. Economic models have become indispensable tools in preparing and negotiating policy decisions like the CAP reform, Health Check, post 2013 reform, negotiations by the World Trade Organisation (WTO), etc. However, these tools need to be adapted to new policy orientation such as single farm payment or rural development; to market developments like the use of energy crops or the volatility of prices; and to the impact of non-agricultural sectors such as the oil market.
The AGRITRADE action uses in particular quantitative tools, which are part of the agro-economic modelling platform, being implemented at IPTS. Partial equilibrium models like AGLINK, CAPRI and ESIM focus on the analysis of the Common Agricultural Policy and projections of European commodity markets. The linkages with other economic sectors, factor markets and international trade flows are captured by general equilibrium models like the GLOBE and MAGNET model.
Model based analysis of CAP and commodity markets in Europe
AGRITRADE is producing simulations of different agricultural policy options and market projections for the EU. With this purpose, the in-house economic models (CAPRI, ESIM, AGLINK, GLOBE and MAGNET) are employed for the analysis of the CAP reform and emerging topics such as bio-energy. Additionally, AGRITRADE contributes to preparing the yearly DG AGRI baseline employing different ex-ante model approaches.
International agri-food trade
Within this research line AGRITRADE produces impact assessments of international trade of agro-food commodities, in the context of the dynamic development of world agricultural markets and evolving multi- and regional trade agreements, as well as the more and more relevant non-tariff barriers. Furthermore, the development of the food industry in Europe is investigated.
Methodological aspects of quantitative tools and databases
This third activity, contributes to the further improvement, maintenance and user-friendliness of existing quantitative tools and databases in the agro-economic research area at EU level. This process leans on the collaboration with a top-level expert group and enhances the networking with and integration in the modelling community. Close links to research institutions from Member States and international organisations like the Organisation for Economic Co-operation and Development (OECD); the Food and Agriculture Organisation (FAO); and the Global Trade Analysis Project (GTAP); are established through scientific dialogue and exchange of tools and data.
Economic impact of green growth
Agriculture is per se a sector with a high potential for green growth, i.e. growing economically while contributing to both reduced greenhouse gas emissions and the development of its role as a carbon sink. AGRITRADE contributes to this interdisciplinary research area with its economic and modelling tools focusing on the implications for agri-food markets in agriculture's contribution to a low carbon society, impacts of sustainable management and use of resources (water, land, biodiversity) and to model risk and uncertainty on the supply side.