The Joint Research Centre of the European Commission (JRC) developed the Dynamic Equilibrium Model for Economic development Resources and Agriculture (DEMETRA) model with the objective to produce a tool to be widely employed for ex-ante economy-wide analysis, mainly in developing countries and developing countries researchers and academics. The main objective of the tool is to provide policy makers and scientific communities based in developing countries with independent, evidence-based scientific support as well as data, with an emphasis on the economic analysis of agri-food sectors and related policies and food security.
The JRC is employing DEMETRA within the framework of the Pan African Network on the economic Analysis of Policies (PANAP) thanks to funding received from DG INTPA. PANAP is a network among academic/research and institutional partners collaborating with the European Commission - JRC in developing research on agricultural economics and policy issues with a focus on Africa. PANAP aims to strengthen the liaison between researchers/scientists and policymakers in Africa, and to stimulate their cooperation on selected topics linked to policy priorities that reinforce the stability of agriculture and food sectors in Africa. It will also help achieve the sustainability of the agri-food sectors to enhance food and nutrition security in alignment with the Malabo Declaration Commitment 3 on ending hunger in Africa by 2025 and Sustainable Development Goal 2 (SDG2 - Zero Hunger). PANAP is part of the Action Agenda of the Political Declaration of the 3rd AU-EU Agriculture Ministerial Conference held in Rome on 21 June 2019, and is conceived in the framework of the Africa-Europe agenda for rural transformation - Task force rural Africa.
The core version of the model, accompanied by a detailed documentation and user guide, will be available to all interested users, mainly those affiliated or working for policy-making bodies at continental, e.g. AUC and NEPAD, regional, e.g. RECs and national level, e.g. relevant ministerial departments and agencies.
As all the work carried out within the PANAP network, research projects employing DEMETRA shall be policy-driven and serve the interests of relevant policy makers either at country or at multi-lateral level or both.
The main objectives behind the development of the DEMETRA model are the following ones:
The DEMETRA is a single-country computable general equilibrium (CGE) model, developed in GAMS. DEMETRA is a development of the STAGE_DEV models documented in McDonald et al., (2016). STAGE_DEV is a variant of STAGE_2 (McDonald, 2021) that incorporates a series of additional behavioural relationships that better account for economic relationships in developing countries, such as the dual role of semi-subsistent agricultural households, a nested consumption function, the endogeneity of the functional distribution of income, domestic migration and factor market segmentation. The recursive dynamic version of DEMETRA is derived from the STAGE_DYN model and STAGE_DEV_DYN models, a variant/development of the STAGE 2 single country CGE model.
DEMETRA extends the STAGE_DEV model by including: multi-partner trade flows, a fully flexible multi-nested production function, an extended list of SDGs indicators. It also enhances several features of the original STAGE_DEV model, such as the demographic part of the model, the domestic migration and labour mobility and the inclusion of several feedbacks mechanisms between public expenditure or investment and productivity parameters.
The model is calibrated using a reduced form of a Social Accounting Matrix (SAM) that broadly conforms to the UN System of National Accounts (SNA).
DEMETRA is used to investigate the economy-wide and distributional impacts of specific policies and/or structural shocks, sectoral transmission of sector-specific policies for sectors, agents and regions. In particular, DEMETRA can carry out ex-ante impact analyses of:
The output of DEMETRA includes projections of input-output tables, GDP growth, sectorial production, employment, land use, international trade (imports and exports), capital flows and household consumption and welfare, domestic migration, evolution of agricultural and general public budget. The granularity of the results (in terms of sector, regions, households) is strictly dependent on the structure of the underlying database on which the model is calibrated. DEMETRA can also be linked to other economic models or databases to provide detailed impacts of policy analysis at farm or households level.
In the recent years, JRC has contributed, using DEMETRA, to:
Researchers and academic organizations that demand and use DEMETRA’s analytical work, namely economic, agricultural and food security policy impact analysis, will be able to use DEMETRA model. The JRC staff will provide adequate instructions on how to use DEMETRA for running policy analyses, and eventually to develop the model further.
Interested researchers and academic organizations can contact JRC staff through different channels, including direct contact with JRC (Unit JRC.D.4 – Economics of Agriculture), via the EU delegation based in their own countries. In addition, they can contact PANAP multilateral partners in the continent, namely the Agriculture, Rural Development, Blue Economy, and Sustainable Environment (ARBE) department of the African Union Commission and/or The Forum for Agricultural Research in Africa (FARA). They should indicate their willingness to cooperate with JRC and employ the DEMETRA model in the context of a concrete policy analysis question.
JRC will distribute DEMETRA under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) licence. Under this licence, academics and institutions who receive the model from JRC are free to copy and redistribute the material in any medium or format, remix, transform and build upon the material. In exchange, they need to give appropriate credit, provide a link to the license, and indicate if changes were made. The material cannot be used for any commercial purposes. In addition, in case the model is remixed, transformed, any contributions should be shared under the same license as the original.
The model will be distributed with a detailed documentation of the variables, parameters and equations included in it. In addition, JRC will distribute a user guide, enumerating the different steps needed to run the model.
Appropriate sessions of knowledge sharing directed to future users of DEMETRA can be organised by JRC either online of with physical presence of JRC staff (when current health conditions will allow). These sessions will be tailored to the need of the counterparts.
In principle, JRC staff can contribute and participate with the counterparts in their first policy analysis with DEMETRA following these steps:
During this process, the aim of JRC staff will be to support researchers from counterparts to become independent users of the model.
JRC will also organise specific sessions for independent users with the objective to become advance users and developers of the model.
DEMETRA is calibrated on a Social Accounting Matrix (Mainar et al., 2018). So far, the JRC produced SAMs including specific features such as the inclusion of Home Production for Home Consumption (HPHC), vectors of physical quantities of labour and land, inclusion of an extension service sector and differentiated investment types (road, irrigation). All these SAMs, starting from available nation accounts table (input-output or better supply-use tables), also include a wide range of surveys (mainly household budget surveys) to regionalise agricultural production, regionalise representative household group, disaggregate and regionalise labour accounts and include HPHC, among others.
For each case study, a suitable SAM, which accounts for the specificity of the questions at stakes, should be produced. SAMs can be developed starting from recent Input-Output Table or Supply-Use Table, available from the national statistical office (as for the cases of Kenya (Mainar et al., 2020; Mainar et al., 2017), Ethiopia (Mengistu et al., 2019) and Senegal (Boulanger et al., 2017). If this is not possible, a SAM can be retrieved from the literature and adapted (updated to the most recent years available, extended with needed economic accounts) to the needs of the project, using national accounts and available surveys.
JRC will contribute and support counterparts in preparing database required to perform policy analyses. JRC has extensive knowledge in treatment of national accounts data and survey data to estimate new SAMs, update old SAMs, estimate required elasticities (Vigani et al., 2019; Vigani et al., 2019), and include microsimulation module to analyse poverty, inequality or food and nutrition security aspects of the analysed policies. The SAMs produced by or whose development is supported by JRC staff will become public goods available to all interested user from the PANAP data web site.
In principle, the use of the DEMETRA and the participation to any of the organised session is free of any charge. The JRC is available to discuss and propose solutions to the needs of the counterparts, which might impede the use of the model, e.g. the acquisition of a valid licence for the GAMS software.
The JRC, through the PANAP network and via the EU delegations in each country, is committed to support local researchers and institutions in several ways. Among them: funding specific research needs, organise knowledge sharing sessions, hosting short visiting staying at JRC premises in Seville when the health situation will allow, co-organise dissemination workshops, common sessions and side events at key agriculture, economic and international conferences.
The JRC staff is currently working to improve, enhance and develop several modules of the model, in particular on:
Demography – gender and labour market participation
Nutrition
Domestic migration
Environmental indicators – water, CO2, deforestation, electrification
Land use module
Demand function
Microsimulation module
Link with other models (FFSIM-DEV, MAGNET, biophysical models (??))