An ex-ante impact assessment of the Common Agricultural Policy reform in the North-Western Romania

Abstract

The paper aims to assess the impact of the Common Agricultural Policy reform (post 2014) in the environmental vulnerable areas from Romania. It proposes a bio-economic dynamic farm model calibrated with the positive mathematical programming (PMP). The standard PMP approach was extended to simulate the mixed farming systems through the introduction of a livestock production activity in the first calibration step. It allows incorporating activities not available in the base year, but that can be performed by the farmers after the future policy reforms. The model provides supply-responses for both the crop and livestock farms according to the agricultural and financial policy shifts. It maximizes the farm net financial flows subject to the resource, livestock, financial and agricultural policy constraints. The initialisation data were obtained from a face-to-face stratified survey applied on the mixed-sheep farms that have used grassland areas under the Agri-Environment Schemes (AES) in the North-Western Romania (Transylvania). The results show that the most vulnerable group to the policy changes is represented by the small-size farms, to which the AES are very important economic drivers. Thus, the diversification and the off-farm employments possibilities should be integrated into the future rural development plans as a premise for their survival.