No. 34 The future of the Common Agricultural Policy 102 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR Methodological approach The exercise is based on the JRC's Integrated Modelling Platform for Agro-economic Commodity and Policy Analysis (iMAP), combining three complementary models: • MAGNET2, a model used to assess macroeconomic impacts, redistribution between regions, international trade and effects on GDP • CAPRI3, a partial equilibrium model specifically designed for the analysis of agriculture, with strong regional disaggregation in the EU (up to NUTS2), allowing the assessment of production, prices, trade and environmental indicators • IFM-CAP4, a farm-level model based on FADN data, which captures the structural heterogeneity of farms in terms of economic size, type of farming and income The integrated use of these three models allows for a coherent reading of the impacts from the global to the microeconomic level, ensuring consistency between individual farmers' decisions, market functioning and macroeconomic effects. The baseline scenario was calibrated based on the EU Agricultural Outlook 20235, integrating macroeconomic projections, demographic trends, consumption patterns and the full implementation of the CAP Strategic Plans 2023–2027. The study analysed three different scenarios: 1. Productivity and Investment (Prod&Inv) 2. Environment and Climate (Env&Clim) 3. No CAP In all scenarios, and this is important to note, the EU budget was assumed to be neutral, with only the distribution of support between instruments and, consequently, the levels of national co-financing changing. ‘Productivityand Investment’ scenario This scenario focuses on competitiveness, innovation and investment, reducing the weight of direct payments and environmental payments, and strengthening instruments geared towards gains in production efficiency. The underlying logic is that investment in technology, knowledge and physical capital reduces unit costs and strengthens the EU's position in international markets. Impacts on production: • Total EU agricultural production: +2% to +3% • Cereals: +1.7% • Oilseeds: +2.3% • Fruit and vegetables: +3% • Livestock production: +3.8% (milk +1.8%) Impacts on prices and consumption: • Consumer food prices: –0.5% to –1% • Fruit and nuts: –2.7% • Vegetables and legumes: –2% • Household food expenditure reduced by around 0.5% Trade and self-sufficiency: • Agri-food exports: +0.7% (+€1.3 billion) • Imports: –1.2% (–€1.4 billion) • Moderate improvement in self-sufficiency, especially in cereals, oilseeds and fruit and vegetables (gains of 1% to 3%, depending on the sector) 2https://web.jrc.ec.europa.eu/policy-model-inventory/explore/models/model-magnet/ 3https://web.jrc.ec.europa.eu/policy-model-inventory/explore/models/model-capri-print/ 4https://web.jrc.ec.europa.eu/policy-model-inventory/explore/models/model-ifm-cap-print/ 5https://agriculture.ec.europa.eu/system/files/2024-01/agricultural-outlook-2023-report_en_0.pdf
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