Important legal notice
AGRILIFE- Agriculture and life sciences in the economy
SUSTAG - Sustainable Agriculture
Modelling Impacts of Rural Development Policies
Exploratory phase – RURMOD-E


The objectives of this study are i) to demonstrate the capability of the bi-regional (rural-urban) CGE model to provide impact assessment of rural development measures of Axis 3 (EC 1698/2005), and ii) to give presentation to the Commission services on three modelling aspects, i.e. the structure of the model, implementation of measures and results of the assessment of the policy scenario impacts.


This activity of IPTS responds to the need of DG AGRI to have a tool for ex-ante assessment of rural development policy impacts. As a first step, IPTS conducted a survey of potentially suitable tools and then launched a small study is to demonstrate the capabilities of the most promising approach based on a CGE model.

In general, CGE models have attracted the attention of economists and policy analysts dealing with rural development issues only very recently. The CGE model implemented here draws especially on one of the standard frameworks made available by IFPRI (LOFGREN et al., 2002). Starting with this basic structure, a number of necessary modifications have been made, so that the model is adapted to reflect specific characteristics of rural regions and policies and account for key rural-urban interactions. This basic adjustment to its spatial duality (urban-rural) was already done in the EU FP6 project TERA.

For the "demonstration" study the model has been slightly adjusted to cope with rural development measures of the Axis 3. The capacity of the bi-regional model is demonstrated on two case studies for the Greek urban rural pair Heraklion-Archanes and the Czech pair Ostrava-Bruntal.


The study proves the capacity of the bi-regional CGE model to address the assessment of desired rural development policy instruments. It is clear that impact of policy instruments depends on regional specificities and thus that the results have to be interpreted in the context of the regions for which the calculations have been done. It asks for an appropriate regional typology if the results are to be generalised.

The "demonstration" workshop concluded that for future development the structure of the model should be maintained and perhaps slightly improved, while the model should be run on NUTS3 regions for which a separation of rural and urban areas would be done.


TERA Project

Demonstration Workshop "The use of a rural urban bi-regional model for the assessment of the rural development policy (Axis 3) (RURMOD-E)": Brussels, 26 November 2008

Sergio Gomez y Paloma
Joint Research Centre