Modelling Agricultural Diffuse Pollution: CAP - WFD Interactions and Cost Effectiveness of Measures

Abstract

Abstract Within the context of the Water Framework Directive (WFD) and the Common Agricultural Policy (CAP), the design of effective and sustainable agricultural and water resources management policies presents multiple challenges. This paper presents a methodological framework that will be used to identify synergies and trade-offs between the CAP and the WFD in relation to their economic and water resources environmental effects, and to assess the cost-effectiveness of measures to control water pollution, in a representative case study catchment in Scotland. The approach is based on the combination of a biophysical simulation model (CropSyst) with a mathematical programming model (FSSIM-MP), so as to provide a better understanding and representation of the economic and agronomic/environmental processes that take place within the agricultural system. Keywords : Bio-economic Modelling, Water Framework Directive, Common Agricultural Policy 1. Introduction Agriculture is seen as the sector that creates the biggest challenge for the sustainable management of water resources. This challenge relates to the reduction of diffuse pollution from agricultural sources and to the regulation of agricultural water consumption. In the EU, the Water Framework Directive (WFD) reflects the increasing prominence given to tackling these problems. One of the most important milestones is the establishment of River Basin Management Plans by 2009. These will be providing detailed information on how the environmental objectives will be reached by 2015 according to the Programme of Measures (POM). In accordance with the approach emphasised by the WFD, the POM should provide the most cost-effective measures to reach the environmental requirements. The agricultural sector, one of the sectors that give rise to significant pressures in most water bodies, is expected to be clearly affected by the POM. Implementation of the WFD is taking place against a background of reform in the agricultural sector (Common Agricultural Policy (CAP)) and strong linkages can be identified between the two policies. These relate to the effects of the decoupling of payments, the imposition of cross compliance measures, and the potential new agri-environmental measures. Within this context, the design of effective and sustainable agricultural and water resources management policies presents multiple challenges. Against the background of the WFD and the CAP, there are two conflicting goals in relation to agriculture: minimise the impacts of the sector on the water environment while maximising its economic return. Therefore, an approach that considers both the socio-economic and environmental outcomes of agricultural production is needed. Nevertheless, the agricultural system is dominated by complex and interacting agronomic, environmental and production processes. Analysing and modelling such a system requires understanding of both natural and social sciences. This paper presents a methodological framework that uses a bio-economic modelling approach in order to provide a better understanding of the complexity of the agricultural system. CropSyst (Stockle