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      <h2>Workpackage structure for the IDEMA project</h2>
      <h4>&nbsp;</h4>
      <h4>Figure 1. Structure of the workplan</h4>
      <h4><img src="bilder/idematrad.gif" width="594" height="735" /></h4>
      <p>Compared with the previous CAP reforms, the introduction of a single 
        payment per farm implies a fundamental change in policy institutions. 
        Due to the scale and the nature of the change it is extremely difficult 
        to foresee the impact that the reform may have on the relevant aspects 
        of European agriculture. In particular, no single methodological approach 
        is able to accomplish such a task. Therefore, the project is organised 
        around three complementary and inter-related approaches. These approaches 
        include (a) survey-based analysis of the strategic behaviour of farmers, 
        (b) dynamic farm level/regional modelling and, (c), sector/general equilibrium 
        modelling. The work is organised into 12 workpackages. A broad summary 
        of the workpackages and the relations between them is presented below. 
        Figure 1 illustrates the workpackage structure. </p>
      <p>Workpackages 1-3 are related to the potential changes in strategic decision 
        making by farmers that may be brought about by the decoupling of aid and 
        the introduction of a single farm payment. WP1 will focus on producing 
        an inventory of previous experiences with decoupling. Past experiences 
        in the EU and elsewhere focusing on the impact on insurance and wealth 
        effects of previous payments will be summarised. Fundamental concepts 
        of decoupling will also be reviewed. WP 1 includes an assessment of experiences 
        in Sweden, where, following a reform of agricultural policy in 1990, a 
        radical form of decoupled payments was applied. In addition, On the basis 
        of this analysis, the main research hypotheses will be formulated. These 
        hypotheses will be subsequently tested in WP2 and WP3. </p>
      <p>Workpackage 2 will develop instruments to be used in the survey work, 
        which will be undertaken within workpackage 3. The survey work will be 
        conducted in 5 selected countries (France, Lithuania, Slovakia, Sweden 
        and the United Kingdom). It will be based on sub-samples of the national 
        FADN population in each of the studied countries in order to be able to 
        analyse farmers' responses in conjunction with current and historic records 
        of farm performance and structure. The strategic decisions of farmers, 
        classified by different farm types, in the light of decoupling will be 
        modelled. Previous enterprise level modelling of strategic decision-making 
        has largely concentrated on family farms, whereas this project will analyse 
        both individual and corporate farms. This is an important contribution 
        of the proposed work as the latter will become a far more prevalent organisational 
        form given the enlargement of the EU. Moreover, little attention has been 
        given to understanding how strategic responses to decoupling will vary 
        according to different farm structural and managerial characteristics. 
      </p>
      <p>The analysis of the survey data will be expanded by an analysis of the 
        matching farm accountancy data from previous years. The analysis of FADN 
        data will provide information on the financial performance, and particularly 
        the financial stress, of farms and will define whether there is a correlation 
        with particular types of responses. All these aspects of the analysis 
        will be conducted on a country per country basis. To conclude, the commonalities 
        and differences amongst the EU members will be drawn. </p>
      <p>Workpackages 4-7 relate to farm-based regional modelling using an agent-based 
        dynamic model. They will involve the detailed modelling of farm-level 
        technologies. Such detailed modelling is necessary because farmers will 
        be confronted with a multiplicity of incentives, which occasionally may 
        be conflicting. Specific cultivation will no longer be required as a condition 
        for receiving support, but farmers will have to comply with animal welfare, 
        environmental protection, food and occupational safety requirements. Moreover, 
        environmental support measures, which are extensively used in several 
        member states and which are expected to remain in place (and even grow), 
        are indirectly related to production due to the relatedness of agricultural 
        and environmental goods. The complicated interplay of the aforementioned 
        factors may result in a very different supply response and contrasting 
        environmental and social impacts in different parts of the enlarged Europe. 
        Hence, detailed modelling reflecting regional diversity is necessary. 
      </p>
      <p>Workpackage 4 encompasses the core tasks to be undertaken regarding farm 
        level modelling. This will be based on AgriPoliS, which is an existing 
        model undergoing continuous developments. By taking into account the behaviour 
        of an individual farm and the interaction between a large number of farms, 
        AgriPoliS is able to simulate the effects of policy changes (production, 
        structural change, environment, incomes etc) at the regional level. AgriPoliS 
        will be adapted to analyse different types of decoupling policies. This 
        adaptation will involve two phases: development of the model and adjustment 
        of the model to selected regions. The development of the model is split 
        into three main tasks. First, the incorporation of the behaviour of different 
        types of farm (corporate, co-operative, family) and owners of production 
        factors such as land. This will be based on the experiences from WP1, 
        WP3 and WP8. Second, the model will be adjusted to accommodate different 
        types of decoupling policies. Third, the model will be refined to enable 
        project partners to deliver regional data as well as to calibrate the 
        model. The second phase will be to adapt AgriPoliS to represent agriculture 
        in selected regions. Regions will be selected, in partner countries, to 
        account for the diversity of production conditions of agriculture in the 
        enlarged Europe. </p>
      <p>Workpackage 7 will adopt the aforementioned framework to the specificity 
        of Mediterranean agriculture, which will imply the introduction of perennial 
        crops (wine, olive oil, fruits and vegetables) as well as quality traits. 
        Moreover, the specificity of Mediterranean agriculture, which includes 
        the high prevalence of small-scale, family farms, demands additional refinements, 
        such as including non-agricultural activities on-farm and off-farm. </p>
      <p>The environmental impact analysis in WP6 will be based on development 
        of an environmental impact module within AgriPoliS. Since agricultural 
        production is likely to decline or cease in some areas as a result of 
        decoupling, the focus of the analysis will be on the consequences of land 
        use change for environmental quality. For example, grazing livestock are 
        important for the maintenance of pastoral landscapes and other landscape 
        attributes in marginal areas. Further, reductions in the area of intensively 
        farmed crops such as grains might have implications for the use of chemical 
        inputs. The relevance of these impacts will also be considered but only 
        to the extent that they are related to land use change. The environmental 
        analysis will be based on representative agricultural regions in Sweden 
        (marginal agriculture), the Czech Republic (new-member agriculture) and 
        Italy (Mediterranean agriculture). The analysis will be restricted to 
        only the key environmental issues for each of these representative countries/regions, 
        i.e., as they relate to decoupling. The environmental impact module will 
        require two fundamental developments of AgriPoliS a) extension of the 
        number of farmland classes and b) a more explicit spatial representation 
        of agricultural production. This work will also require the collection 
        of environmental and physical data. The latter will be conducted in co-operation 
        with partners 4 and 7 and integrated with workpackages 5 and 11. </p>
      <p>Workpackage 5 will be based on WP4, WP6 and WP 7. It will include: a) 
        definition of tools to analyse simulation results; b) validation of the 
        model based on comparing simulation results with real experiences and 
        insights generated in workpackages 1 and 3; c) specification of decoupling 
        policies (in co-operation with WP 10) and d) simulation with regional 
        models. The simulations will be conducted on a region-by-region basis, 
        in close co-operation with partners from the respective countries. The 
        regions will be selected in the partner countries to account for the diversity 
        of production conditions: agronomic (North / South), socio-economic (high 
        / low income), mode of operation (intensive / extensive agriculture), 
        scale of farm operation (small / large) and legal form (private / corporate). 
      </p>
      <p>Workpackage 8 will produce a review of land markets, to be included in 
        the farm-based regional modelling contained within workpackage 4 and in 
        the sector/general equilibrium modelling undertaken in workpackage 9. 
        The review will be based on relevant literature and direct information 
        from partners. </p>
      <p>Workpackage 9 will involve the further refinement of the agricultural 
        sector model ESIM and the general equilibrium models (CGE) for the acceding 
        countries. First, a model of land markets will be introduced in both the 
        ESIM and CGE-models. Following this, a dynamic interface between both 
        types of models to endogenise key macro-variables and to introduce the 
        linkages between the up- and downstream sectors of agriculture will be 
        established. This interface will allow the inclusion of changes in macro-economic 
        variables, such as wages, rental rates for capital and exchange rates 
        in ESIM. ESIM will provide data on the changes in support for agricultural 
        commodities, which will enter the CGE-model. Extended partial and general 
        equilibrium models will be used in WP10 to simulate the effects of decoupled 
        payments on agricultural production, consumption and trade in the enlarged 
        Europe. </p>
      <p>Workpackage 11 includes three sub-packages, for each of the new member 
        countries within the project. The partners will identify the specific 
        conditions and constraints for the application of CAP direct payments 
        in the Czech, Slovak and Lithuanian cases. This will imply the integration 
        of the results of the analysis of farm based regional modelling with the 
        sector level and general equilibrium modelling for agriculture in each 
        of the countries. In the Czech and Slovak cases, due to the large importance 
        of corporate farms, which lease land from hundreds of individuals, a particular 
        emphasis will be placed on the results from the AgriPoliS model concerning 
        the impact of CAP direct payments on large-scale farms leasing land. In 
        addition, partner 7 will investigate the environmental implications of 
        decoupled payments together with partner 1 and the survey of farmers' 
        decisions will be conducted in Lithuania and Slovakia. </p>
      <p>Workpackage 12 will provide a summary of the results generated during 
        the project and include dissemination activities. The aim is not merely 
        to summarise essential findings, in a straightforward manner, but also 
        to provide a synthesis of the results exploring the complementarily nature 
        of the approaches applied. The results of the simulations at national/EU 
        levels will be interpreted jointly with results of the simulations at 
        the regional level. This will enable qualitative comparisons of the supply 
        response predicted at the level of representative regions, with supply 
        response simulations at the member state/EU level. The quantitative assessments 
        derived from the modelling approaches will be compared with the results 
        of the surveys, which can illustrate more fundamental changes in farmers' 
        behaviour, such as major restructuring and the likelihood of exiting the 
        sector. </p>
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