CCP 05/CRS.4

1. The Cosimo work programme at FAO was undertaken to improve the Organization’s capacity to assess existing and proposed policies, as well as current and emerging commodity market issues. It is hoped that this modelling framework could be made available to Member countries to help them assess policy developments. The work has been undertaken in a collaborative arrangement with OECD to make efficient use of its established work for their members in the form of its Aglink model, as well as FAO’s modelling expertise on developing countries. As information from the Agricultural Policy Indicators (API) work becomes available, it will be incorporated in the model to analyse the impact of developing country policies on market and food security issues.

2. Cosimo is a partial equilibrium dynamic agricultural model aimed at conducting policy simulations, on the basis of benchmark medium term projections to be updated regularly. It is built as a complement to the current version of the Aglink model of the OECD. The two models are solved simultaneously, and Cosimo contains both the countries included in Aglink, plus the details for a further 29 countries and regions which are now included in the “Rest of the World” region of Aglink. The countries/regions included in the model are as noted in Table A1. These will be increased in time according to analysis needs, as well as requests coming from member countries. Currently the model is limited to temperate zone commodities, but is being extended in 2005 to include sugar, cotton and coffee.

3. Table A2 provides the list of included commodities. Compared to Aglink, Cosimo was developed with emphasis on increasing the product space, to reflect the production and consumption mixes of the developing countries. Ones for which there are currently aggregated market clearing conditions are marked with an asterisk, but these change as the model is developed. The definition of oilseeds currently is limited to soybeans, canola/rapeseed and sunflowers. This will change to include other oilseeds important for developing countries.

4. The model specification for developing countries in Cosimo is different from the one adopted in most of the Aglink modules. The country models of Cosimo feature crop area and food expenditure type allocation systems. These are modelled through a Generalised Addilog System, specified as a multinomial logit system.

5. The Cosimo uses integrated data from FAOstat and ESC’s Commodity Balance System database that are used in the preparation of FAO’s Food Outlook. It also uses the new FAO farm price dataset; this will help test the important links between international and domestic prices that is critical to impact assessment across countries.

6. The FAO staff will work collaboratively with OECD in 2005 to produce a joint projection baseline. This will provide an updated plausible projection that will be used in scenario analysis. Key exogenous projections for the demographic and macro economic environment will be based on UN and World Bank projections, and from assumptions of no change to current policies (unless these are prescribed in current legislation).

Table A1: Current country/region coverage in Cosimo

Table A2: Commodity Coverage in the Cosimo