INTEGRATING AGRONOMIC-MODELS AND ECONOMIC-MODELS FOR POLICY ANALYSIS AT THE FARM-LEVEL - THE IMPACT OF CAP REFORM IN 2 EUROPEAN REGIONS

An agronomic crop growth model generates yield and pollution data which are incorporated into a linear programming model for the estimation of the effects of Common Agricultural Policy (CAP) price changes on modal farm types in two regions, namely South East England and South West Prance. The economic model is run from 1990/91 to 1994/95 in a recursive fashion. The results indicate that modal farms in both regions do not have lower farm incomes following implementation of CAP reforms in 1992/93, compared to the previous years. However, farms in South East England appear to be penalised by the reforms when compared to the 'no reform' situation. We attribute this to the fact that crop yields in this region are 40% higher than those used to calculate the average regional yields (used in the calculation of area payments). In the French model, farm income is higher with CAP reform than without as a result of the very high area payment on some of the irrigated crops, and the much lower discrepancy between actual yields in the region and those yields used to calculate the area payments. With the CAP reforms, both models indicate an increased area of lower nitrogen (10-30%) input crop production, and this is associated with lower rates of nitrate loss.