Environment and Rural Affairs Monitoring & Modelling Programme - ERAMMP Report-60: ERAMMP Integrated Modelling Platform (IMP) Land Use Scenarios

Harrison, P.A. ORCID: https://orcid.org/0000-0002-9873-3338; Dunford-Brown, R.; Beauchamp, K.; Cooper, J.; Cooper, J.M.; Dickie, I.; Fitch, A ORCID: https://orcid.org/0000-0002-6260-8957; Gooday, R.; Hollaway, M. ORCID: https://orcid.org/0000-0003-0386-2696; Holman, I.P.; Jones, L. ORCID: https://orcid.org/0000-0002-4379-9006; Matthews, R.; Mondain - Monval, T. ORCID: https://orcid.org/0000-0002-6770-2002; Norris, D.A.; Sandars, D; Seaton, F. ORCID: https://orcid.org/0000-0002-2022-7451; Siriwardena, G.M.; Smart, S.M. ORCID: https://orcid.org/0000-0003-2750-7832; Thomas, A.R.C. ORCID: https://orcid.org/0000-0002-4929-7285; Trembath, P.; Vieno, M. ORCID: https://orcid.org/0000-0001-7741-9377; West, B. ORCID: https://orcid.org/0000-0001-9434-9817; Williams, A.G.; Whittaker, F.; Bell, C.. 2022 Environment and Rural Affairs Monitoring & Modelling Programme - ERAMMP Report-60: ERAMMP Integrated Modelling Platform (IMP) Land Use Scenarios. Bangor, UK Centre for Ecology & Hydrology, 49pp. (UKCEH Project no. C06297, C210/2016/2017)

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Abstract/Summary

Six scenarios consisting of changes in farm-gate prices (T1 to T6) have been applied to the ERAMMP Integrated Modelling Platform (IMP) to simulate impacts on land use change, biodiversity and ecosystem services (carbon, water quality and air quality). The scenarios were based on discussions held between stakeholders in the Evidence and Scenario subgroup (Roundtable Wales and Brexit1) and Welsh Government (WG) policy officials. These discussions took place in late 2020 before the arrangements for the UK leaving the EU were agreed, therefore are based on broad assumptions around the detail of the trade agreement with the EU as well as other third countries including Australia, New Zeland and USA. It is important to note that the outputs of these discussions which were used as inputs into the ERAMMP IMP may therefore not accurately reflect the outcomes achieved within the finalised trade agreements. The T1 scenario assumes no EU trade deal and trade liberalisation, with no tariffs applied to imported products and T2 an EU trade deal with no change to the trade arrangements with third countries. These two scenarios used the changes to farm-gate prices modelled by FAPRI2. The assumptions used in the T3 to T6 scenarios were based on expert opinion from the stakeholder group, and include impacts on farm-gate prices which potentially could have resulted from different combinations of trade deals with New Zealand, Australia and USA. Scenarios which include “no EU deal” options (T1 and T4) are no longer relevant. In no way whatsoever do T1, T3, T4, T5 and T6 represent a WG position; our understanding of the nature and impact of new and emerging trade deals has evolved significantly and the WG Trade Policy Team lead in this area. The objective of this work was to gain an early understanding of how changes in farm-gate prices potentially resulting from trading relationships may influence land use and subsequently effect entry into the Sustainable Farming Scheme. We note that many other factors are also likely to influence Welsh farmgate prices, such as (but not limited to), currency exchange rates, energy prices and extreme weather events in other parts of the world. This report provides an overview of the land use implications of all these scenarios, but focuses on the T2 scenario, which represents an EU Trade Deal. This T2 scenario is being used as the counterfactual scenario against which the costs and benefits of the land use implications of the proposed Sustainable Farming Scheme will be assessed in the Regulatory Impact Assessment for the proposed Agricultural Bill. This includes the estimated environmental outcomes of the EU Trade Deal scenario and, where the ERAMMP IMP has attached monetary valuations to these, the value of these outcomes to society. In the Cost Benefit Analysis, these monetary values will inform the overall estimated Net Present Value (NPV) of this business-as-usual counterfactual. The IMP involves many assumptions and these need to be borne in mind when interpreting and using its outcomes. By necessity, all models are a simplification of the real situation, but can still provide very useful insights if applied for a specific purpose and with caution. The collaborative and iterative consortium-based approach to co-designing the IMP has meant that Welsh Government and IMP teams have clear, open channels of communication for asking questions. This ensures that the modelling represents government aspirations as well as possible and the limits of the approach are well understood. IMP outputs for the T2 scenario show that some simulated full-time farms (>1 FTE labour) come under economic pressure (7%) and are simulated to be unable to produce a sufficient Farm Business Income to be economically viable. For these farm types, no options to transition to a more alternative profitable farm type are available and they are assumed to leave full-time agriculture. A greater number of farms transition to dairying resulting in a 75% increase in the number of dairy farms. This is associated with large increases in the number of dairy cattle (73%) and reductions in sheep (-34%). A general intensification of grassland systems is simulated resulting from the farm type transitions, with a 66% increase in temporary grasslands and a 21% decrease in permanent grasslands. Overall, these changes in agriculture and land use are simulated to lead to mixed, but predominantly negative, effects on biodiversity, increases in GHG emissions and deterioration in air and water quality. The T2 scenario predicts the least change in agriculture out of the six scenarios. T1 simulates the greatest impacts on agriculture due to significant farm-gate price reductions across dairy, beef and sheep systems, with a large number of full-time farms leaving agriculture. This leads to large increases in woodland area and generally positive effects on biodiversity and ecosystem services. T3 and T4 also simulate large impacts on agriculture. These are associated with significant farm transitions to dairy (due to increases in milk prices and significant decreases in beef and lamb prices) resulting in larger increases in GHG emissions and greater declines in air and water quality, compared to the T2 scenario. The T5 and T6 scenarios fall between these extremes, with T6 projecting the second greatest impacts on agriculture (after T1) in terms of farms under pressure. These simulated changes in agriculture are associated with net benefits for air and water quality, but net costs for GHG emissions; although these costs are lower than for scenarios T3-T5.

Item Type:	Publication - Report (Project Report)
UKCEH and CEH Sections/Science Areas:	Soils and Land Use (Science Area 2017-)
Funders/Sponsors:	Welsh Government
Additional Keywords:	ERAMMP
Related URLs:	Project Website
Date made live:	13 Nov 2023 16:24 +0 (UTC)
URI:	https://nora.nerc.ac.uk/id/eprint/535980

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