Modelling agricultural policy reforms in the Mediterranean basin - Adjustments of AGRISIM

Abstract

In recent years the Mediterranean countries encounter a number of changes of the agricultural policy that could influence significantly their agricultural sector and thus their overall economy. They are faced with the ongoing trade liberalisation, the Reform of the Common Agricultural Policy (CAP) of the European Union (EU), since the EU is one of the major trade partners of the Mediterranean countries and the establishment of a Free Trade Area between the EU and the Mediterranean Countries after 2010. The latest is/will be accomplished through the Euro- Mediterranean Association Agreements, was decided in the Summit of Barcelona in 1995 and is particularly up- to date after 2005, 10 years after the establishment of the Barcelona Agreement. These changes are expected above all to influence the trade flows between the EU and the Mediterranean Partner Countries (MPC) and therefore, to have impacts on the production, consumption, domestic and border prices and welfare. Aim of the paper is to discuss methodological issues connected with the modelling of policy changes in the Mediterranean basin and to provide more insights on the modification of the model AGRISIM so as to make it a suitable tool to analyse the trade flows in the Mediterranean basin.