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.

Abstract: Climate and policy changes are likely to affect protein crop production and thus trade balances in Europe, which is highly dependent on imports. Exemplified for Austrian cropland, we developed an integrated modelling framework to analyze climate change and policy scenario impacts on protein crop production and environmental outcomes. The integrated modelling framework consists of a statistical climate change model, a crop rotation model, the bio-physical process model EPIC, and the economic bottom-up land use optimization model BiomAT. EPIC is applied to simulate annual dry matter crop yields for different crop management practices including crop rotations, fertilization intensities, and irrigation, as well as for 3 regional climate change scenarios until 2040 at a 1 km grid resolution. BiomAT maximizes total gross margins by optimizing land use choices and crop management practices subject to spatially explicit cropland endowments. The model results indicate that changes in agricultural policy conditions, cropland use, and higher flexibility in crop management practices may reduce protein import dependence under changing climatic conditions. Expanding protein crop production is most attractive in south-eastern Austria with its Central European continental climate where maize is most often replaced in crop rotations. However, the acreage of protein crops is limited by agronomically suitable cropland. An intended side effect is the reduction of nitrogen fertilizer inputs by about 0.1% if total protein crop production increases by 1%.

Abstract: Organic agriculture aims to produce food while establishing an ecological balance to augment ecosystem services (ES) and has been rapidly expanding in the world since the 1980s. Recently, however, in several European countries, including Denmark, organic farmers have converted back to conventional farming. Hence, understanding how agricultural ES are affected by the number of years since conversion to organic farming is imperative for policy makers to guide future agricultural policy. In order to investigate the long-term effects of conversion to organic farming on ES we performed i) a model simulation case study by applying the Daisy model to simulate 14 different conversion scenarios for a Danish farm during a 65 year period with increasing number of years under organic farming, and ii) an on-farm case study in Denmark with one conventional farm, one organic farm under conversion, and three organic farms converted 10, 15 and 58 years ago, respectively. Both the model simulation case study and the on-farm case study showed that non-marketable ES values increased with increasing number of years under organic farming. Trade-offs between marketable and non-marketable ES were not evident, since also marketable ES values generally showed an increasing trend, except when the price difference between organic and conventional products in the model simulation study was the smallest, and when an alfalfa pre-crop in the on-farm case study resulted in a significantly higher level of plant available nitrogen, which boosted the yield and the associated marketable ES of the subsequent winter rye crop. These results indicate a possible benefit of preserving long-term organic farms and could be used to argue for agricultural policy interventions to offset further reduction in the number of organic farms or the land area under organic farming.