Effectiveness of farm policies on social and economic development in rural areas

A methodology for estimating the impact of agricultural support payments on both farm output and the wider economy at regional level is outlined and applied to one Scottish region. Using a Johansen-type model of the agriculture sector, the impact of support changes on agricultural output is forecast. A regional input-output matrix is derived and used to calculate income and employment multipliers for the main agricultural enterprises. Using these multipliers, forecasts of regional income and employment losses due to a partial reduction in agricultural support are made. Within the region, the spatial distribution of benefits is projected using a Gravity Model and mapped using a Geographic Information System.