For the CAP, and in particular for the 2023-2027 CAP which incorporates the European Green Pact (EU climate neutrality by 2050), modelling is an essential and indispensable tool for assessing the economic impacts. This is the purpose of IFM-CAP, one of the models designed for this purpose. It can be used to assess a wide range of public policies impacting on the diversity of farms in the EU; it provides detailed analyses of different production systems and can estimate the distributional effects on the farming population.

Agricultural water management, combining yields and irrigation choices at farm level, is a real methodological challenge. Water resources are rarely included in models of this nature, hence the interest in explicitly including them in the IFM-CAP model.

This is the aim of the feasibility study requested in 2018 by the MIDAS group of the JRC-Seville dedicated to modelling for public decision-making. The prospective study was conducted in several phases: formulation for modelling; implementation; and ex-post evaluation.

The aim is to examine the possibility of improving the IFM-CAP model with water as an input, using the method developed for the AROPAj* model and presented in the article “Farm-Level Bio-Economic Modelling of Water and Nitrogen” (Humblot, 2017). To include water in IFM-CAP and estimate the yield response to water (and nitrogen) on the plot of a crop on a modelled individual farm, the approach mobilises a biophysical crop model (in this case INRAE’s STICS model). Thus, provided that information on soil, climate and phenology is available, supplemented by observations on yield and input levels as well as crop and input prices, the method offers a selection criterion that is sufficiently generic to be applied to a large number of crops among a large number of EU farmers. The approach also offers an indirect means of deducing the predominant soil type for the crop in the region, enables the quantities of water and nitrogen used to be estimated, and provides an indication of the cost of access to water, assuming that the farmer is optimising the gross margin of his farm.

This should enable the IFM-CAP model to respond to the problems encountered in the bioeconomic modelling of farms, with the lack of information concerning the costs of accessing and using water.

Integrating water into IFM-CAP involves creating an independent calculation module that calibrates the yield response to irrigation water. This will make it possible to assess the response of farmers to different policy scenarios, in terms of the intensive effect (gross margin of the crop at plot level) and the extensive effect (gross margin of the farm’s crops after optimal reallocation of land for a given UAA). The results produced by this module will be used as input data for the basic version of the IFM-CAP model. The module was tested in two FADN regions (NUTS-2), Midi-Pyrénées and Thessaly.

The report on the study carried out by INRAE presents the theoretical, mathematical and technical specifications, as well as the results of the case study. The method, which is feasible (and used by the AROPAj model), will have to be refined for its adaptation to the IFM-CAP model, in particular with regard to the integration of the nitrogen input into the model.