Do free trade agreements encourage agricultural production in Eastern Europe?

Background and Objective

In the AGRICISTRADE  project, we analyze the current state of agriculture and its processing sectors in Armenia, Azerbaijan, Georgia, Kazakhstan, Moldova, Russia, Ukraine and Belarus. We also look at the development of their agriculture sector including changes in trade flows under specific assumptions. These assumptions are mainly changes in trade policies. This project contributes to a better understanding of the current situation, future potentials and possible developments of the agricultural sector in the respective countries.

Approach

We collect and analyze data to get an overview of the agricultural situation in each of these countries. We analyze statistical data such as production, consumption, stocks, imports, exports, land use and prices as well as policy instruments and their influence on the market.

We estimate potentials such as yield improvements and land expansion and their future development with a model based approach. We extend our models and fit them to the regions. Additionally we link the models AGMEMOD, MAGNET  and GLOBIOM  to get the most plausible results.

Based on scenario simulations, we analyse developments of the agricultural sector in the Eastern neighbors of the EU and in the EU. For example, what additional amount of wheat will the Ukraine produce if tariffs between the EU and Ukraine are set to zero? How does this influence trade flows of the Ukraine.

The scenarios show different market developments and differ in agricultural and trade policies. Additionally they can vary in other parameters which influence the agricultural sector such as technical progress and gross domestic product.

Data and Methods

The partial equilibrium market model AGMEMOD is updated and expanded to Russia, Ukraine, Kazakhstan and Belarus within this project. AGMEMOD is used especially for analyzing market policies in the agricultural sector such as intervention prices, production quotas as well as coupled and decoupled payments.

Bilateral trade flows and trade policies are analyzed with the general equilibrium model MAGNET. The model GLOBIOM answers questions about yield potentials and agricultural land use within a country based on soil and climate properties. The most important influences on agriculture are brought together through the linkage of these models.

Our Research Questions

What impacts do free trade agreements between the EU and its Eastern neighbors as well as between these countries have on the agricultural sector and its processing industry?

Which policies influence the development of the agricultural sector?

Results

Results are presented in publications and on the homepage of the project.

Links and Downloads

Official homepage AGRICISTRADE