Agriculture & economics

Abstract: Adequate monitoring of the EU transition toward sustainable food systems can promote policy coherence and provide better evidence for informed policy making. This paper presents an initial concept and methodology for an EU food system monitoring framework, integrating a systems’ perspective and key sustainability elements relevant to the EU context. Grounded in scientific evidence and extensive dialogues among scientific experts with interdisciplinary backgrounds, we define an EU food system sustainability model that provides a conceptual framework for monitoring. This model encompasses 12 thematic areas and 37 indicator domains, synthetized through a rigorous review of existing frameworks and the assessment of nearly 250 relevant indicators via a transparent workflow and an integrated collaborative digital tool. We identify data gaps that signal challenges ahead in effective monitoring, but also opportunities for research and cooperation. To advance with an EU food system monitoring framework, it is essential to engage in participatory processes with stakeholders, ensuring an inclusive and transparent approach.

Abstract: The Joint Research Centre (JRC) – the European Commission service providing evidence-based science and knowledge to support EU policies – has set up its first monitoring framework to provide information on progress towards a fair, healthy and environmentally friendly food system, built on a set of environmental, economic and social (including health) indicators. More than 350 indicators on underpinning policies were screened and their suitability assessed for the intended objective. The selected indicators have been visualised in a monitoring dashboard, an information system and a communication tool created by the JRC. This report summarises the main steps taken to develop the system, the principles governing the selection of the indicators and plans for further work. This EU monitoring framework does not constitute a final product. The various Commission services acknowledge data gaps and intend to address them to ensure a more comprehensive approach and reflect new policy priorities. The monitoring framework will provide policymakers, stakeholders and citizens with relevant information about the sustainability of the EU food system. Considering the significant impact of the food system on the EU’s economy and citizens, the monitoring tool intends to assess the cumulative impact of all actions related to competitiveness, the environment and health in the EU

Abstract: This paper examines the challenges and drivers shaping EU agriculture in the medium term, focusing on its capacity to meet societal demands and remain resilient. Key drivers include climate change, global population growth, and geopolitical shifts, while innovation fosters adaptation. The EU’s regulatory responses and the evolution of the Common Agricultural Policy (CAP) will determine how agriculture reconciles environmental sustainability with farmers’ concerns about fair competition, influencing global outcomes.

Abstract: The Common Agricultural Policy Strategic Plans (CSPs) of the EU Member States (MSs) introduce a new CAP delivery model for the programming period 2023-2027, establishing a common framework for CAP payments, while granting MSs the flexibility to design interventions for direct payments, sectoral interventions, and rural development tailored to the needs of their agricultural sector. This report serves a dual purpose: Firstly, it provides an overview of the CSPs Master file, which consolidates all 28 CSPs to facilitate a structured analysis of the new CAP, along with essential concepts characteristic to the CSPs. Secondly, the report presents a comparative analysis of the initially approved CSPs, focusing on the financial aspects and specifics of their implementation across MSs, as well as some insights into the contributions to organic farming. The analysis of all CSPs highlights significant diversity and heterogeneity in the interventions adopted by the MSs. The CAP is supported by 307 billion EUR, comprising 264 billion EUR from the EU Budget and 43 billion EUR from national co-financing. Direct Payments are the most dominant component, with the Basic Income Support for Sustainability remaining the most important CAP tool to support EU farmer income, accounting 51% of direct payments, followed by eco-schemes at 24%. Rural Development allocations also show considerable diversity across intervention types and MSs.

Abstract: Research in the area of agro-economic modelling has been one of the key contributions of the Joint Research Centre (JRC) to the development of better agri-food policies in the EU. This article provides an overview of the development of the JRC's integrated agro-economic modelling platform since its establishment in 2005. We highlight the main contributions to policy analysis and describe in detail two key areas, namely the provision of medium-term projections for agricultural markets and the analysis of various CAP proposals. Furthermore, we describe the gradual shift to expand the capabilities of individual models within the platform to encompass aspects beyond traditional agro-economic aspects and incorporate environmental considerations. Model integration remains a focus both within the platform at different levels and scales, and in conjunction with biophysical models. This, together with incorporating knowledge from other fields of economic analysis is fundamental to capture changing policy objectives.

Abstract: The objective of the report is to analyse purchasing patterns of organic food products and plant-based alternatives and examine how sensitive the consumption of these products is to changes in prices. The report analyses are based on consumer purchasing panel data from five EU countries – Germany, Spain, France, Italy and Finland – for 2018–2022. The report finds that consumption patterns of organic food products and plant-based alternatives are heterogeneous across countries, products and socioeconomic household groups. The econometric estimates show that (i) the magnitudes of the own-price elasticities of organic products, plant-based alternatives and conventional products vary across products and countries, ranging between – 0.13 and – 1.30, (ii) the price sensitivity of the sustainable products is more heterogeneous than that of their conventional counterparts and (iii) changes in the prices of organic products minimally affect the purchasing quantities of their conventional counterparts (i.e. the corresponding cross-price elasticities mostly range between – 0.05 and 0.05), while changes in the prices of the conventional products tend to affect the purchases of organic products (i.e. the corresponding cross-price elasticities mostly range between – 0.50 and 0.50).

Abstract: We analyze the farm-level economic and environmental impacts of the post-2020 reform of the Common Agricultural Policy (CAP) of the European Union, examining six scenarios constructed around the budget allocated to eco-schemes and the stringency of enhanced conditionality. Results suggest that the CAP post-2020 can improve environmental performance but at a cost for farms. Enhanced conditionality appears to play a greater role than eco-schemes in delivering environmental improvements. The new CAP provides the Member States ample options to choose among different measures. The optimal policy mix will depend on the balancing of income support versus environmental performance that reflects policy priorities.

Abstract: The objective of this article is to identify main drivers determining the geographical location of craft breweries in Slovakia. The main contribution of the article to the literature is to provide empirical evidence on the location determines of small firms as well as the focus on the Eastern European country both of which are less explored in the literature. The article employs a conditional logit model on a regional panel data dataset of craft breweries and location attributes covering 79 counties in Slovakia for the period 1995–2019. The estimated results suggest that agglomeration economies are key determinants of location choices. However, the agglomeration of small breweries has notably strong effect, while the agglomeration of large breweries and past brewing experience are statistically insignificant in affecting location choices. Further, important drivers of craft breweries location choices are demand factors linked to tourist sector development. Other drivers, such as urban effects, life quality and labour market conditions, seem not to play role or have rather a weaker impact.

Abstract: Sustainability standards may generate two opposing effects on trade flows between the importer adopting the standard and an affected exporter. First, to the extent a standard leads to an increase in the marginal costs of producing a given product in the exporting country, the standard may lead to a reduction in trade. Conversely, to the extent the standard leads to an increase in the demand for the product in the importing country, the standard may lead to an increase in trade. The net effect on trade, which depends on the relative magnitude of the two factors and the international scope of the standard (i.e. whether it is implemented multilaterally, regionally, bilaterally, or unilaterally). The general consensus in the literature appears to be that the trade-reducing effects of standards typically dominate the trade-enhancing effects of standards. However, in certain situations, the trade-enhancing effects can mitigate or even reverse these negative effects. A trade reduction does necessary imply a reduction in welfare as it may reduce consumption of goods with negative externalities. The trade effects of voluntary sustainability standards tend toward 'trade enhancing' outcomes as opposed to `trade reducing' outcomes. However, there seems to be self-selection effect: only those adopt for whom it is profitable.

Abstract: This paper analyses the impacts of the Farm to Fork strategy (F2F) target of 25% organic farmland by 2030 in the EU using a farm level model. Two approaches are deployed to model conversion to organic agriculture. The first one, the endogenous approach, operates under the assumption that farm conversions to organic production result from assessing the utility difference between organic and conventional production systems. The exogenous approach relies on econometric estimation of the likelihood of farms to convert to organic driven by a combination of monetary and non-monetary drivers. The simulated impacts of the F2F target at the EU level vary depending on the chosen methodology. Gross income changes range from +3.8% under the endogenous approach to -1.3% under the exogenous approach. Both approaches forecast decreased production (-0.5% to -15%) for most crops and animal products upon achieving the organic target.