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The Effects of Alternative Policy Scenarios on Multifunctionality: A Case Study of Spain. CEPS ENARPRI Working Papers No. 15, 7 June 2006

Varela-Ortega, Consuelo and Simó, Arancha and Blanco, Irene. (2006) The Effects of Alternative Policy Scenarios on Multifunctionality: A Case Study of Spain. CEPS ENARPRI Working Papers No. 15, 7 June 2006. [Working Paper]

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    This paper focuses on the comparative analysis and evaluation of the impact of multifunctionality on the agricultural sector for different scenarios that take into account the protection of the environment and natural resources as well as the international trade agreements in the context of the EU agricultural sector. The research focuses on two different regions in Spain that represent the continental agriculture of the region of Castilla-Leon in the northern central plateau and the Mediterranean fertile agriculture of Andalusia in the south. The analysis has been carried out based on mathematical programming models that simulate farmers’ behaviour and their response to the different policy scenarios that correspond to the EU agricultural policies (CAP programmes) and water policies (Water Framework Directive) currently in place. Specifically, these scenarios are: full and partial decoupling, subsidy modulation, crop prices reduction, cross-compliance measures and water pricing policies. Results indicate that the new decoupled CAP will not lead to drastic changes in land use in the two regions studied but will have negative repercussions on farmers’ income. Moreover, the introduction of additional measures, such as cross-compliance, will contribute substantially to improving and protecting the environment even though they amount to an additional cost for farmers. Reduction in crop prices will have significant effects on international trade and is likely to produce a reduction in farm intensification and hence a beneficial effect on the environment but will involve negative socio-economic impacts in marginal rain-fed farms. As regards the integration of agricultural and water conservation policies, the application of the EU Water Framework Directive in conjunction with the new CAP reform would produce different region-specific effects and might question the viability of a number of irrigated farms in Spain.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > External relations > international trade
    Countries > Spain
    EU policies and themes > Policies & related activities > agriculture policy
    EU policies and themes > Policies & related activities > environmental policy (including international arena)
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > ENARPRI Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 31 Mar 2007
    Page Range: p. 47
    Last Modified: 15 Feb 2011 17:44

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