outlook for ukraine agriculture: results from agmemod model
DESCRIPTION
Outlook for Ukraine agriculture: results from AGMEMOD model. Guna Salputra (LVAEI) Myrna van Leeuwen (LEI) Oksana Golovnya (KNEU) Serhiy Demyanenko (KNEU) I nternational scientific - methodical conference - PowerPoint PPT PresentationTRANSCRIPT
Outlook for Ukraine agriculture: results from AGMEMOD model
Guna Salputra (LVAEI) Myrna van Leeuwen (LEI)Oksana Golovnya (KNEU)
Serhiy Demyanenko (KNEU)
International scientific-methodical conference”Legal-organizational Forms of Agri-industrial Formations: Status, Prospects and the
Impact on Rural Development”Vadym Hetman Kyiv National Economic University (KNEU)
Faculty of Economics of Agri-industrial Comlex, Kyiv, November 11-12, 2011
2
Table of content
• What is AGMEMOD– Objectives and (short) history– Methodology from data handling to output analysis– Data and variables – Structure of the model
• Baseline scenario assumptions
• Ukraine agricultural outlook to 2025 for grains and oilseeds, meat, dairy
Vadym Hetman Kyiv National Economic University
11-12 November 2011
3
AGMEMOD
AGriculture MEmber States MODelling – Partial equilibrium– Dynamic– Recursive – Econometrically estimated– Multi-commodity markets and multi-country
combined model
Incorporates 29 individual country models – 24 EU countries, Croatia, FYR Macedonia, Turkey, Ukraine, Russia.
Vadym Hetman Kyiv National Economic University
11-12 November 2011
Objectives of AGMEMOD
To make medium term annual projections and simulations for the main European agricultural sectors in order to– establish a reliable baseline and – evaluate measures, programmes and policies in
agriculture at the EU level as well as at the stand-alone country (Member State, Accession Candidate and individual neighbouring countries) level with an emphasis on supply, demand, trade and prices.
Vadym Hetman Kyiv National Economic University
11-12 November 2011
Part I2001-2005
EU15 country modelsOrganisation of project
Part II2006-2008
Part III2009-2010
EU27 combined modelExtension of Partnership
Extension with Turkey
Part III2010-2011
Extention with Russia, UkraineEndogeous world price
EU funds5th FP
EU funds6th FP
History of AGMEMOD
IPTS funds
Nati-onal
funds
Extension Kazakhstan
Vadym Hetman Kyiv National Economic University
11-12 November 2011
6
From data handling to output analysis
• Compile data on commodity supply/demand balances and macroeconomic and policy assumptions
• Model specification for Ukrainian agricultural situation taking into account its specific structures and agricultural and trade policy
• Estimate/calibrate the specified equations with Eviews and transfer into the AGMEMOD GAMS framework
• Run , solve and validate the model
• Generate baseline and scenario analysis
Vadym Hetman Kyiv National Economic University
11-12 November 2011
7
From data handling to output analysis
Agmemod2Gams
DataRU-Datagmemod.xlsUA-Datagmemod.xlsAssumptionsInput.xls
PolicyHarmon.xls
Knowledge
EquationsRU-ModelEquatons.xlsUA-ModelEquatons.xls
Eviews
Errors/Warnings
GAMS modelRU-Equations.gmsUA-Equations.gms
Senarios
mapstables
graphs
Vadym Hetman Kyiv National Economic University
11-12 November 2011
8
Data and variables in AGMEMOD
Endogenous variables • Prices • Supply/demand balances
– production, consumption, stocks and trade
Exogenous variables• Macroeconomic indicators
– GDP, population, inflation rate, exchange rates UAH/USD and UAH/EUR• Agricultural policy indicators
– intervention prices– payments per ha/animal/production– input subsidies– production quota
• Trade policy indicators– import and export duties– Import and export quotas and tariffs– quota tariff rates
Vadym Hetman Kyiv National Economic University
11-12 November 2011
9
AGMEMOD Ukraine model structure
+
Harvested land/ animal
Feed use
Yield per ha/ per animal
Food use
Beginning stocks
Production
Ending stocks
Consumption
Imports
ExportsNet export
macroeconomicvariables
RU and UA modelsn commodity markets
AGMEMODKey price
World market price (trade agreements)
Intervention price
Price transmission
EU27 self-sufficiency rate
EU27
RU and UA national policy variables (minimum prices,
quota, payments)
RU and UA trade isntruments (import duties and tariffs, export quota)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
10
Baseline narratives for Ukraine
• Projections based on:– historical trends– taking account of the world market, macroeconomic and
agricultural policy environment to 2025 as far as known at this moment
• Status-quo situation up to 2025:– macro-economic projections (population, GDP, inflation,
exchange rates) for Ukraine – continuation of specific Ukrainian agricultural policy
instruments– continuation of trade policy of Ukraine– no assumptions on ongoing Doha Development Round of
WTO– FAPRI April 2011 world prices incorporated
Vadym Hetman Kyiv National Economic University
11-12 November 2011
UA baseline outlookGrains and oilseeds
11Vadym Hetman Kyiv National Economic
University11-12 November 2011
Soft wheat: competitive UA price compared to world and EU price
12
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Ukraine EU World
Soft wheat price (€/100kg)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
Rapeseeds: UA price below world and EU price
13
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Ukraine EU World
Rapeseeds price (€/100 kg)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
UA baseline: grains and oilseeds
• Area harvested:– total grains area harvested projected to show moderate
increase– 80% of grains area is allocated to soft wheat, barley
and maize– total oilseeds area harvested projected to grow in
reaction on • UA is becoming an important rapeseeds producer and
exporter to EU countries due to increasing biodiesel demand• soybeans area would grow: UA is a protein-deficient country
and soybean meals demand is expected to grow in answer on the actual rise of investments into meat and dairy sectors
14Vadym Hetman Kyiv National Economic
University11-12 November 2011
15
Soft wheat: production mainly driven by yield grow, slightly increase of wheat area harvested
0
5
10
15
20
25
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Production
Net-Exports
Non-feed use
Feed use
Soft wheat (mio tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
16
Barley: UA belongs to main barley exporters (80% to Middle East); higher feed use demand from increasing beef and
poultry sectors
0
2
4
6
8
10
12
14
16
18
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Non-feed use
Feed use
Production
Net-Exports
Barley (mio tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
17
Rapeseeds: higher production expected as answer on higher demand for biodiesel (eg from EU); increasing net-export
position
0
1
1
2
2
3
3
4
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Production
Net-Exports
Feed use
Rapeseeds (mio tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
UA baseline outlookLivestock and meat
18
19
Beef: UA price follows the world price; it is slightly declining due to increasing self-sufficiency rate; UA is net-exporter
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
Ukraine EU World
Beef price (€/100kg)
20AGMEMOD workshop, Brussels, 13/14 September 2011
Pork: UA price close to EU price and significantly above world price; import tariffs; UA is net-importer of pork
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
Ukraine EU World
Pork price (€/100kg)
Poultry: UA price follows the world price; UA price is below the world and EU prices; UA has turned into a net-exporter of
poultry
21
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.0
50.0
100.0
150.0
200.0
250.0
Ukraine EU World
Poultry price (€/100 kg)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
22
Beef: increase of beef production, important factor - increasing slaughter weight
0
100
200
300
400
500
600
700
800
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Net-Exports
Domestic use
Production
Beef (1000 tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
23
Pork: import tariffs prevent influence from ROW; UA expected to remain net-importer
• con
-200
-100
0
100
200
300
400
500
600
700
800
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Net-Exports
Domestic use
ProductionPork (1000 tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
24
Poultry: 70% of production is concentrated into 2 vertically integrated companies; significant investments in more
integration expected; UA was net-importer to 2008, but has turned into a net-exporter
-400
-200
0
200
400
600
800
1000
1200
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Net-Exports
Domestic use
Production
Poultry (1000 tons)
UA baseline outlookMilk and dairy
25
Milk: price lower than EU price
26
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
5
10
15
20
25
30
35
Ukraine EU
Milk price (€/100kg)
Butter: domestic price follows same patterns as world and EU prices, but at lower level
27
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
50
100
150
200
250
300
350
400
Ukraine EU World
Butter price (€/100kg)
Cheese: UA price lower than world and EU prices; slightly increasing due to increasing demand
28
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
100
200
300
400
500
600
Ukraine EU World
Cheese price (€/100kg)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
29
Butter: stable production and domestic use projected; declining domestic use due to stable cons/head, but
decreasing population; this enforces UA net-export position
0
50
100
150
200
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Net-Exports
Domestic use
Production
Butter (1000 tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
30
Cheese: projected production increase (1%/year) linked to projected higher milk production; yearly 1.7% rise in cheese
cons/cap; UA keeps net-export position but with declining tendency
0
50
100
150
200
250
300
350
400
450
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Net-Exports
Domestic use
Production
Cheese (1000 tons)
Vadym Hetman Kyiv National Economic University
11-12 November 2011
Conclusions on baseline outlook
– UA is competitive partner on world crop markets and under baseline is projected to remain net-exporter of grains and oilseeds
– UA milk production expected to increase, which leads to higher beef production as well
– UA is projected to remain net-importer of pork; relatively high domestic price compared to other meats
– UA is projected to remain a net-exporter of dairy products with a movement towards production of cheese and fresh products (higher value products)
31Vadym Hetman Kyiv National Economic
University11-12 November 2011
32
Thank you for attention
More information:
www.agmemod.eu ,
Vadym Hetman Kyiv National Economic University
11-12 November 2011