Sustainability of European Irrigated Agriculture under Water Framework Directive and Agenda 2000

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OVERVIEW
Berbel, J. 1 ; Gomez-Limon, JA. 2 y Viaggi, D. 3
1 University of Cordova, Department of Agricultural Economics
2 University of Valladolid, Department of Agricultural Economics
3 University of Bologna, Department of Agricultural Economics
1. BACKGROUND
Economics is the science that deals with limited resources that are capable of being used to
satisfy human needs, and classical economics stressed the power of the market both to
stimulate growth and serve the interests of society as a whole. In the 1950s, government
intervention was justified when markets failed, and most policy models were based upon
general equilibrium models in which policy makers control market variables such as prices,
quotas, import-export levies, etc. as was the case in most OECD member countries and
especially in the European Union’s Common Agricultural Policy (CAP).
Agricultural economics emerged as a field of applied economics that dealt with agricultural
production, the transformation of food and fibre and their consumption. The practice of
agricultural economics has maintained a distinct operational quantitative flavour and it has
focused on practical problems such as decision-making processes (farms, companies,
consumers), but decision-support models continued to be based upon general equilibrium
models in which policy-makers control market variables, and this was the main tool used by
policy-makers.
The general development of society (economic, social, technological) has changed policy
priorities. As a result, in this changing academic and policy environment old simulation tools
based upon market equilibrium models became only a partial solution, particularly when nonmarket
variables and ecological impacts appear to be at the top of the agenda. For this reason,
databases such as FADN need to be updated with new variables and methodologies if they are
to be able to capture interactions between farming and the environment.
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