Assessing the Future Development of the Macedonian Agriculture: Partial equilibrium model of livestock-feed sector

The country is facing one of the biggest challenges since its independence – the process of the EU accession. Taking into consideration that „forecasting important economic events is source of power“ (Howitt, 2005), the aim of this paper is to develop a model in order to assess the impact of the EU membership on the Macedonian agriculture. The model is recursive, dynamic, multi-product partial equilibrium model for the meat, dairy and cereals sector in the Republic of Macedonia. It follows the AGMEMOD principles, hence comprising the local features of the Macedonian agriculture. The baseline scenario shows a positive growth of the pig meat, lamb meat and cow milk sectors. On the other hand, in the EU scenarios the most positive effect is expected in the extensive sectors, e.g the sheep and beef productions. The grains show modest growth on the supply side, but the projections on the net-trade demonstrate further deficit increase. The biggest gain in the EU scenarios comes from the higher level of prices, but also from the higher budgetary support. Compared with the experiences of the previous enlargements, the model confirms the expectations about the development of the selected sectors after the EU accession.