Non-foodproduct technologies will be assessed. Existing research information will beappended by filling regional holes and assessing additional environmentalimpacts. Available non-food technologies will be described in a consistentmanner, which allows integration into the ENFA model.

The ENFAmodelling tool will combine both traditional (mainly related to food) andalternative (mainly related to non-food) management choices in the agriculturaland forestry sectors with promising non-food options.

The ENFAmodel will contain several key features

• The traditional agricultural sector is completely represented across the EU through representative production technologies for major traditional products
• Active agricultural policies will be integrated
• Major non-food opportunities are implemented simultaneously across the EU
• Product prices for traditional agricultural products and production levels for both traditional and renewable products will be endogenous
• Non-food industrial products will face industrial demand curve
• ENFA can solve for the market equilibrium subject to various policy and/or technology scenarios
• Technological coefficients, resource endowments, demand and supply function parameters can be easily updated. The model can be easily expanded to cover new technologies and new regions
• It will be dynamic welfare optimisation model

To find the competitive economic potential of non-food opportunities, it is very important to include traditional food production technologies and traditional agricultural markets. Profit expectations from traditional agricultural and forest production impose opportunity costs for alternative non-food production lines. For a non-food production line to be implemented, it is not enough to return satisfactory net profits. The non-food production line to be implemented must be superior to all other alternatives. For example, a miscanthus – electricity production line having a positive expected net return of 100 Euro per ha will not be implemented unless all other available strategies (for example a wheat production line) have lower net returns.

Opportunity costs are not constant. As market prices adjust, opportunity costschange. Simply speaking, as more agricultural and forestland is devoted tonon-food production lines, traditional agricultural production levels decrease,and market prices for traditional products increase. However, as prices fortraditional products increase so do expected net returns for and opportunitycosts from traditional agricultural strategies. Thus, non-food production linesmay become more expensive as implementation of these production linesincreases. The ENFA model will fully capture the described marketadjustments after non-food adoption including production, prices, and tradeimpacts for agricultural and forest commodities, welfare of farmers andforesters, and aggregated resource requirements.

Alternativenon-food production lines differ across space and time. In some regions,certain production lines may have a higher economic potential because someregional settings may result in higher net returns or because opportunity costsare lower. The ENFA analysis will use an appropriate regional and temporalresolution to capture economic and environmental heterogeneity across space andtime. The agricultural sectors of all current EU countries and Polandwill be integrated. ENFA will be structured to allow easy coverage of morecountries, i.e. candidate countries as data become available. Because Europeanagriculture is not isolated from the rest of the world, trade relationshipswith important non-European regions will be integrated for major agriculturalproducts.

Adoption ofnon-food production lines affects the environment and rural communities. TheENFA project will examine major aspects of these impacts. Environmentalassessments will involve impacts on greenhouse gas emission, bio-diversity,water quality, and soil erosion from selected non-food options. Rural communityimpacts assessed through ENFA comprise changes in farm welfare, labour demand,and land values. In assessing environmental and rural community impacts,attention will be paid to regional differences.

ENFA will contribute to policy development. The consortium members in dialogue with the Commission will jointly determine reasonable policy scenarios. The impacts of these policy scenarios will be assessed with ENFA model and important findings will made available to the Commission and to other parties of interest.