2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSimportance of intra-regional trade, but also it does not model eggs as a separate productionactivity. Instead eggs are subsumed into intensive livestock along with pigs and poultry. Also,eggs are not disaggregated to include shell eggs from alternative production. Therefore for thetype of results and information required it is clear that an EDM is more appropriate and canprovide superior results.7.1.1. EDM Model SpecificationThe simplest way to describe the EDM employed is to consider Figure 7.1 below.InputsFeed, Labourand OtherEggProductionCagedShelldAlternativeTrade with ThirdCountriesProcessedFigure 7.1: Schematic diagram of the EDM modelFigure 7.1 shows that the EDM is comprised of an egg production sector that employs three primaryinputs (feed, labour and ‘other’). The ‘other’ input category captures all activity that has a potentialbearing on cost of production, principally bird depreciation (see Section 2.4) for a full breakdown ofthe cost structure). The eggs that are produced are then separated into three types: caged shell,alternative shell and processed. Finally, trade in both caged shell and processed eggs is included and,depending on individual Member State circumstances will be either a net import or a net exportrequirement.The first step in making the model operational is to characterise the various market relationshipsalgebraically. To conduct policy analysis with the model it is ‘shocked’ or displaced from its initialequilibrium as a result of some exogenous change (e.g., a demand or supply shift). By totallydifferentiating all equations in the model and expressing these in the form of elasticities the modellinearly relates changes in the endogenous variables to changes in exogenous variables.89