Introducing Different Land Uses (Irrigated and Non-Irrigated) in Policy Analysis Modelling for Mediterranean Countries

The arable crop sector in Spain is highly dependent of the Community subsidies and account for 33% of total transfers received by the Community. Then, it is expected that the introduction of the Single Farm Payment (SFP) will drive important changes in the arable crop production in Spain. The quantitative assessment of the SFP impacts on the arable crop sector in Spain is the overall objective of this paper. To achieve this goal, an econometric, dynamic, multi-product and partial equilibrium commodity model has been built disaggregating between irrigated and non-irrigated land use for cereals called Spanish Econometric Simulation of Agricultural Policies (SESAP). Results indicated that the introduction of the SFP has only induced considerable changes from the Agenda 2000 in the supply side, having found only small changes in imports and exports, and insignificant or null changes in domestic use. Cereals and oilseeds production is expected higher decreases under the SFP scenario than under the Agenda 2000. The main differences between irrigated and non-irrigated production of the different cereals are two. Wheat and barley are mainly produced in non-irrigated land where production shows less dependence on policy changes in the case of wheat and have a positive impact in the case of barley. However, barely and maize irrigated production would have remained constant under the Agenda 2000 but a decrease of 25% is predicted under the SFP scenario. In addition, maize is mainly produced in irrigated land, and the non-irrigated production will enormously decrease until almost disappear in the near future