MODELLING THE EFFECT OF EU POLICY REFORMS ON FARM INVESTMENT BEHAVIOUR

The objective of this paper is to analyse farm strategies and investment behaviour in a sample ofselected Italian farm-households facing different scenarios, with a particular focus on the effects ofthe 2003 CAP reform. Models were built for individual households using multi-criteria dynamicprogramming, including investment choice. A total of 24 farms were selected for modelling, alllocated in Emilia Romagna (Italy). The simulations show a strong effect of both policy and marketsscenarios on household investment, though the latter seems more relevant than the former. However,decoupling itself shows minor effects in the majority of cases. The models offer useful insights aboutthe mechanisms of adaptation and their implications for the effects of policies. The main drawbacksare in the heavy data collection and computational requirements, and in the related difficulties toachieve a satisfactory degree of representativeness.