The impact of different policy environments on agricultural land use in Europe

Abstract

The impact of globalization on trade, production and land use was key to the Doha development round. Although many studies have shown the positive influence of liberalization on trade and production, the environmental questions remain unanswered in most studies. Here we present a combination of an economic (Global Trade Analysis Project, GTAP) and a biophysical (IMAGE) model. The methodology is innovative as it combines state of the art knowledge from both the economic and biophysical worlds.

First, the treatment of agriculture and land use is improved in the economic model. For example, information from the OECD Policy Evaluation Model (PEM) was incorporated to improve the agricultural production structure and a new land allocation methodology was introduced using regional land supply curves to facilitate the conversion of idle land to productive land while giving consideration to the level of intensification.

Secondly, the adapted economic model is linked to the biophysical modeling framework IMAGE allowing feedbacks of detailed heterogeneous information on land productivity to the economic framework. While often a rather pessimistic picture is portrayed for future developments of the agricultural sector in the EU (especially in liberalizing scenarios), our results show that no drastic decrease in land for agricultural purposes is expected for the EU25 the coming 30 years, since the global food market will experience an increase in demand because of expected growth in GDP and population in many developing countries.

Moreover, the negative impact of liberalization of agricultural policies on European agricultural land use is small because on the one hand loss in EU’s competitiveness leads partly to extensification instead of land abandonment, and secondly, the recent agricultural reforms of the EU changed the protection from market to income support which has less production effects. Changes in land use will be more outspoken in developing countries like Africa.