Abstract: Europe accounts for around 20% of the global cereal production and is a net exporter of ca. 15% of that production. Increasing global demand for cereals justifies questions as to where and by how much Europe’s production can be increased to meet future global market demands, and how much additional nitrogen (N) crops would require. The latter is important as environmental concern and legislation are equally important as production aims in Europe. Here, we used a country-by-country, bottom-up approach to establish statistical estimates of actual grain yield, and compare these to modelled estimates of potential yields for either irrigated or rainfed conditions. In this way, we identified the yield gaps and the opportunities for increased cereal production for wheat, barley and maize, which represent 90% of the cereals grown in Europe. The combined mean annual yield gap of wheat, barley, maize was 239 Mt, or 42% of the yield potential. The national yield gaps ranged between 10 and 70%, with small gaps in many north-western European countries, and large gaps in eastern and south-western Europe. Yield gaps for rainfed and irrigated maize were consistently lower than those of wheat and barley. If the yield gaps of maize, wheat and barley would be reduced from 42% to 20% of potential yields, this would increase annual cereal production by 128 Mt (39%). Potential for higher cereal production exists predominantly in Eastern Europe, and half of Europe’s potential increase is located in Ukraine, Romania and Poland. Unlocking the identified potential for production growth requires a substantial increase of the crop N uptake of 4.8 Mt. Across Europe, the average N uptake gaps, to achieve 80% of the yield potential, were 87, 77 and 43 kg N ha(-1) for wheat, barley and maize, respectively. Emphasis on increasing the N use efficiency is necessary to minimize the need for additional N inputs. Whether yield gap reduction is desirable and feasible is a matter of balancing Europe’s role in global food security, farm economic objectives and environmental targets.

Abstract: Highlights • A framework to study climate and policy uncertainty in agriculture is presented. • Combining both sources of uncertainty has ambiguous effects on agriculture. • Uncertainty needs to be highlighted in modelling tools for policy analysis. Abstract Farmers are exposed to climate change and uncertainty about how that change will develop. As farm incomes, in Norway and elsewhere, greatly depend on government subsidies, the risk of a policy change constitutes an additional uncertainty source. Hence, climate and policy uncertainty could substantially impact agricultural production and farm income. However, these sources of uncertainty have, so far, rarely been combined in food production analyses. The aim of this study was to determine the effects of a combination of policy and climate uncertainty on agricultural production, land use, and social welfare in Norway. Output yield distributions of spring wheat and timothy, a major forage grass, from simulations with the weather-driven crop models, CSM-CERES-Wheat and, LINGRA, were processed in the a stochastic version Jordmod, a price-endogenous spatial economic sector model of the Norwegian agriculture. To account for potential effects of climate uncertainty within a given future greenhouse gas emission scenario on farm profitability, effects on conditions that represented the projected climate for 2050 under the emission scenario A1B from the 4th assessment report of the Intergovernmental Panel on Climate Change and four Global Climate Models (GCM) was investigated. The uncertainty about the level of payment rates at the time farmers make their management decisions was handled by varying the distribution of payment rates applied in the Jordmod model. These changes were based on the change in the overall level of agricultural support in the past. Three uncertainty scenarios were developed and tested: one with climate change uncertainty, another with payment rate uncertainty, and a third where both types of uncertainty were combined. The three scenarios were compared with results from a deterministic scenario where crop yields and payment rates were constant. Climate change resulted in on average 9% lower cereal production, unchanged grass production and more volatile crop yield as well as 4% higher farm incomes on average compared to the deterministic scenario. The scenario with a combination of climate change and policy uncertainty increased the mean farm income more than a scenario with only one source of uncertainty. On the other hand, land use and farm labour were negatively affected under these conditions compared to the deterministic case. Highlighting the potential influence of climate change and policy uncertainty on the performance of the farm sector our results underline the potential error in neglecting either of these two uncertainties in studies of agricultural production, land use and welfare.