Environmental Engineering Reference
In-Depth Information
of these constraints: the sum of the requirements for each resource cannot exceed
resource availability.
For estimating the risk coefficient to include in FSSIM, three options are
proposed in the Risk module to be selected by users:
-
Risk neutral: implies that the risk aversion coefficient is equal to zero (
f = 0).
Risk averse: set risk aversion coefficient: implies that the user has to choose the
-
value to attribute to the risk aversion coefficient. The chosen value can vary from
0 to 1.65 (0 < f £ 1.65).
Risk averse: automatically calibrate the risk aversion coefficient: implies that the
-
model will attribute automatically a value to the risk coefficient which gives the
best fit between the model's predicted crop pattern and the observed values in
the base year. This value ranges between 0 and 1.65 (0 < f £ 1.65).
FSSIM-MP can be calibrated using any of the following approaches, depending on
the application type:
(i) The risk approach;
(ii) The standard PMP procedure (Howitt
1995);
(iii) The Rhöm and Dabbert's PMP approach (Röhm and Dabbert
2003)
; and
(iv) The approach described in Kanellopoulos et al.
(2009).
The base year information for which the model is calibrated stems from a 3-year
average around 2003 (or any update of this baseyear). In terms of policy representa-
tion, FSSIM includes the major policy instruments related to production activities
such as price and market support and set-aside schema as well as cross-compliance
and agro-environmental measures. The following section gives an overview of the
different policy instruments linked to arable crops and how they are considered in
FSSIM-MP.
Modelling of Policy Instruments in FSSIM-MP
FSSIM is developed to analyse the European agricultural and environmental
policies, either proposed or actual, and to enable ex-ante assessments of policy and
market changes. To achieve this goal, it is necessary to take into account a wide
range of the proposed EU policy instruments.
The principal policy instruments that are implemented in FSSIM-MP are the
Common Agricultural Policy (CAP) support regime (price and market support,
set-aside schema, quota system, etc.) included in the CMOs regulations, as well
as cross-compliance and agri-environmental measures included in Horizontal
and Rural Development Regulations. These policy instruments are captured in
FSSIM-MP either by embedding them in the objective function (e.g. premiums), or
by including them as constraints (e.g. set-aside and non-food production must
cover set-aside obligations, set-aside is not allowed to exceed more than a certain
