Alternative agricultural policy scenarios, sector modelling and indicators – A sustainability assessment

In this article, we assess ecological, economic and social sustainability impacts of four alternative agricultural policy scenarios relevant to the European perspective. The analysed scenarios are: Prolonged Agenda 2000, On-going CAP reform, Integrated rural and environmental policy, and Liberalised Agricultural Trade. An economic agricultural sector model of Finnish agriculture is used in the evaluation of policy impacts up to 2020. Selected indicators representing the three dimensions of sustainability are calculated on the basis of the production variables of the model in each scenario. It is assumed that economic rationality, represented by the sector model, is a driving force directing agricultural production and land use, which, in turn, have a number of ecological, economic and social consequences. Our results show that a partial de-coupling of agricultural support from production and moderate reductions of commodity prices are likely to yield environmental benefits. In addition, there is a clear trade-off between environmental benefits and production volume and intensity. However, full de-coupling and radical price reductions are not likely to bring any additional environmental benefits but will result in a significant down-scaling and regional concentration of remaining agricultural activities. Hence the presented analysis is an interesting platform for discussion for stakeholders when implementing agricultural policy reforms. Index words: agricultural policy, agricultural sector modelling, agri-environmental indicators, investments, policy dialogue, policy scenarios, production, sustainability, technical change