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GTAP Resource #4569

"Extending the GTAP Data Base and Model to Cover Domestic Support Issues using the EU as Example"
by Boysen-Urban, Kirsten, Hans Grinsted Jensen and Martina Brockmeier

The EU Single Farm Payment (SFP) is currently distributed in proportion to primary factor shares in version 8 of the GTAP database. In this paper, we investigate whether this way of modeling the EU SFP makes a difference in analyzing agricultural policy reforms. To do so, we create alternative versions of the GTAP database to compare the effects with the default setting in GTAP. Employing OECD data, along with the GTAP framework, we vary the assumptions about the allocation of the SFP. In the process, we demonstrate how to alter and update the GTAP database to implement domestic support of OECD PSE tables. We provide a detailed overview supplemented with assumptions of payment allocation, shock calculations and in particular, the Altertax procedure to update value flows and price equations extended in the GTAP model. Subsequently, we illustrate the impact of those assumptions by simulating a 100% removal of the SFP using the deviating versions of GTAP database. This sensitivity analysis reveals strong differences in results, but particularly in production responses of food and agricultural sectors that decrease with an increasing degree of decoupling. Furthermore, our analysis shows that the effect on welfare and the trade balance decreases with an increasing degree of decoupling. This experiment shows that the allocation of the SFP can have strong impacts on simulation results.

Resource Details (Export Citation) GTAP Keywords
Category: Technical Paper
Status: Published
By/In: GTAP Technical Paper No. 35
Date: 2014
Created: Kincaid, W. (6/25/2014)
Updated: Kincaid, W. (4/19/2016)
Visits: 5,546
- Land use
- Agricultural policies
- The GTAP Data Base and extensions
- European Union

If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.

Public Access
  File format GTAP domestic support implementation procedure  (3.6 MB)   Replicated: 0 time(s)
  File format GTAP DS model – default version  (125.1 MB)   Replicated: 0 time(s)
  File format GTAP Technical Paper No. 35  (1.1 MB)   Replicated: 0 time(s)

Restricted Access
No documents have been attached.

Special Instructions
GTAP domestic support implementation procedure
This folder contains all necessary data, cmf-, tab-, sti- and batch-files to run the program in order to integrate domestic support payments into the GTAP database with a homogenous rate across sectors and factors as default option. This is a socalled "clean version" for users. Additionally, you will also find the read_me file in this folder that shows how to switch from the default option to the other options.

GTAP DS model – default version
Here, we provide a solved version of the default option, which is also included in "GTAP domestic support implementation procedure" and which allocates the SFP with a homogenous rate across sectors and factors (default version). Thus, this folder includes results, updated databases and log-files as well.

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