© Scott McDonald

STAGE AGR

This is a development of the STAGE to encompass the analyses of coupled and decoupled agricultural policies, specifically in the context of the EU’s Common Agricultural Policy but the behavioural relationships can be readily extended to decoupled, agricultural or other sector, policies in other countries. The code was developed with Emanuele Ferrari, and uses code for changes in output composition by activities in response to price changes that was developed with Cecilia Punt.

The core features of the model derive from STAGE 2 and STAGE_LAB. The model is designed to use a Social Accounting Matrix that (I) distinguishes between commodities and activities and (ii) defines agricultural activities by reference to agronomic characteristics. The features added for this application include:

• Nested production functions for land, fertilisers and chemicals
• Additional coupled tax/subsidy instruments for agricultural commodities
• Additional coupled tax/subsidy instruments for agricultural activities
• Additional of an endogenously determined ad valorem subsidy equivalent that facilitates the conversion of multiple decoupled agricultural tax/subsidy instruments into an aggregate tax/subsidy
• Factor market segmentation so as to represent differences in the ease with which different factors can exit/entry activities, especially agriculture. This allows the model to represent the disequilibria experienced by agricultural factor markets due to ‘asset fixity’.

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Technical Document

Model Code