J F Baroiller

A Fostier

C Cauty

B Jalabert

Effects of High Rearlng Temperatures on the Sex Ratio of Progeny from Sex Reversed Males of Oreochromls nllotlcus

ln Oreochromis niloticus, hormonal sex reversai of an entlre progeny from crosses between a sex reversed XX male (produced by steroid treatment) and a normal XX female, resulted ln a progeny of sex reversed XX male siblings. The sex ratio of the progenies produced by single pair matings of 22 of these sex reversed males is only rarely all-female, as opposed to predictions of a monofactorial sex determination model. ln order to assess a potential thermosensitive differentiation, progenies from these sex reversed males were submitted to high temperatures for 21 days. Nlne to 13 day-old fry post-fertilization (PF) from 1 7 progenies were reared at high temperatures ranglng from 30 to 36°C and . to an average control temperature of 28°C. respectlvely. No slgnlflcant difference in survlval was observed between the two groups of Fry with 76.2 and 74.2% survival rates at 28 and 30-36°C, respectively. Ail survlvlng fry (an average of about 1 OO per batch) were sexed by histological examination of tissue squashes at 60-90 dPF. High temperatures shifted the contrai sex ratios from 0 to 91 %. As the low mortalities cannot account for these deviations, thermosensitivity is demonstrated in O. ni/of/eus.

Introduction

ln controlled envlronments, the early and prollfic breeding of tilapias [START_REF] Baroiller | Contribution of research in reproductive physiology to the culture of tilapias[END_REF] results in rapid overpopulation with a tendency to stunting. The artiflcial control of tilapia reproduction is therefore essential to make its culture profitable. Since individual males show better growth rates than females (Pruglnln 1967[START_REF] Hickling | fish hybridization[END_REF][START_REF] Hanson | Growth comparisons of monosex tilapia produced by separatlon of sexes, hybridization and sex reversai[END_REF]), three approaches have been suggested to produce all-male populations: ( 1) manual sexing by examination of the urogenital papilla [START_REF] Hickling | The cultlvatlon of tilapia[END_REF][START_REF] Guerrero | Use of androgens for the production of ail-male Tilapia aurea (Stelndachner)[END_REF]):

(2) hybridization (reviews of [START_REF] Lovshin | Tilapia hybrldlzation[END_REF][START_REF] Majumdar | Sex ratios from lnterspecific crosses wlthln the tilapias[END_REF]McAndrew 1983: Wohlfarth andHulata 1983); and (3) hormonal sex reversai (reviews of [START_REF] Guerrero | Control of tilapla reproduction[END_REF]Hunter and Donaldson 1983;[START_REF] Pandian | Techniques to regulate sex ratio and breeding in tllapia[END_REF]. Manual sexing by examination of the urogenital papilla (2.7-10% errors) results in the elimination of half of the population after two to three months (Baroiller and )alabert 1989). Although today, hormonal sex reversai is the most widely used of the three techniques because of its efficiency and reliability, it is often questioned. For example, the effects of the degradation products of synthetic steroids have not been studied sufficiently, especially for their ecological consequences. Hybridization using two parental species of culture interest like Oreochromis niloticus and O. aureus does not systematically produce 100% males [START_REF] Majumdar | Sex ratios from lnterspecific crosses wlthln the tilapias[END_REF]Wohlfarth and Wedekind 1991).

A fourth, intraspecific approach was suggested by Yamamoto (1969) and has been used for the past ten years. This technique consists in producing homogametic male and female broodfish which in turn produce all-male progenies. ln species like O. aureus, where the male is homogametlc (ZZ), feminization followed by an analysis of the sex ratio of the 247 progenies from the females produced by single pair matings are sufficient steps to produce such individuals [START_REF] Hammerman | Sex determination in Sarotherodon (tilapia). Part Il. The sex ratio as a tool for the determlnation of genotype -a model of autosomal and gonosomal influence[END_REF][START_REF] Jensen | Effects of estrogens on Tilapia aurea: Implications for produètion of monosex genetic male tllapia[END_REF]. ln species like O. niloticus, where the male is heterogametic, an additional step is requlred to produce a new, viable and fertile YY genotype (Baroiller 1988b;[START_REF] Baroiller | Contribution of research in reproductive physiology to the culture of tilapias[END_REF]Scott et al. 1989;Varadaraj 1989).

However, in most of these intra-and interspecific studies, some sex ratios are incompatible with a simple monofactorial sex determination, XX/XY or ZZ/ZW depending on the tilapia species (reviews of Mairet al. 1991aMairet al. , 1991b;;Wohlfarth and Wedekind 1991 ). To explain these unexpected sex ratios, two other models were suggested: one suggests combining two alleles from an autosomal locus and two of the three sex chromosomes (Avtalion and Hammerman 1978;Hammerman and Avtalion 1979); the other suggests a polygenic model [START_REF] Majumdar | Sex ratios from lnterspecific crosses wlthln the tilapias[END_REF]Mairet al. 1987). However, these two theories cannot explain all the results found in the literature [START_REF] Avtalion | Sex determining genes in tilapia: a model of genetic recombination emerging from sex ratio results of three generatlons of diploid gynogenetic Oreochromis aureus[END_REF]Don 1990: Wohlfarth andWedekind 1991).

However, in several species of invertebrates (Bacci 1965: Charnov and Bull t 977) and lower vertebrates [START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF][START_REF] Adkins-Regan | Hormones and sexual dlfferentiation[END_REF][START_REF] Dournon | Temperature sex reversai in amphibians and reptiles. !nt[END_REF], environmental factors can determine the phenotypic sex, independently of the genotypic sex determined durlng fertillzation. Temperature is the major factor in the environmental sex determination of a majority of lower vertebrates [START_REF] Bull | Evolution of sex determining mechanîsms[END_REF]. ln fish, the use of various hormone treatments inducing functional inversions artificially has shown a high level of plasticity in gonadal differentiation (Yamamoto 1969;Hunter and Donaldson 1983). Moreover, environmental factors (social and thermal) are known to influence sex determination in hermaphrodites (Harrington 196 7, 1968(Harrington 196 7, , 1971;;Reinboth 1975;[START_REF] Bruslé | La gonadogenèse des poissons[END_REF][START_REF] Chan | Sex contrai and sex reversai in fish under natural conditions[END_REF]. lt is only in the last ten years that thermodependent sex determination has been identified in a gonochoristic fish [START_REF] Conover | Environmental sex determînatîon: Interaction of temperature and genotype în[END_REF][START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF][START_REF] Conover | Temperature sensitive period of sex determination in Men/dia menidia[END_REF][START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF]Heins 1987 a, 1987b). ln species where heterogamety cannot simply account for the varied sex ratios observed, environmental factors could be involved [START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF]fleisher 1986: Chourrout 1988). Sibling sex reversed males of O. niloticuswith a majority of progenies showing unexpected sex ratios, based on a classic monofactorial mode!, were recently produced (Baroiller, this vol.). Studies on the effect of high rearing temperatures on the sex ratio were consequently conducted on this type of progeny.

Materlals and Methods

Animais

Seven sex reversed males produced by hormone treatment using a family of fry of O. niloticus of the "Bouake strain" (Baroiller et al., in press) were identified by their all-female individual progeny. One of these sex reversed males was bred again and a sex reversai treatment was applied to its entire progeny (Baroiller, this vol.). Nine of the sex reversed males thus produced were selected for breeding and placed individually with normal females at a sex ratio of 4: 1 in 400-1 aquaria. Most of the sex reversed males originating from the same stock produced theoretically unexpected males (Baroiller, this vol.). One of these males (male 03) naturally originating from a sex reversed male was used as a broodfish in the present experiment. The water temperature was kept at 2 7°C using a thermoregulatlng device. Each animal was identified by a tag inserted in its dorsal musculature. Reproduction was detected by the onset of maternai mouthbrooding behavior (eggs then fry) which is characterized by the dilation of the female's mouth. As soon as this particular characteristic was observed, ail other individuals were removed leaving the female to incubate in the aquarium. Five days after hatching, I.e., nine days post-fertilization (dPF), fry were removed from the mother's mouth. Each progeny, identified by its fertilization date and the tags on the parents, was divided into two to five equal batches of at least 100 individuals. Each batch was reared separately in 200-1 aquaria. The water in the aquaria was filtered, aerated and thermoregulated. Batches for exposure to high temperatures were placed in small 0.5-1 plastic containers containing an air stone. These containers were left afloat in the aquaria for a few hours for temperature adjustment before releasing the fry which remained 21 days in the thermoregulated aquarium. This period corresponds to the optimum treatment duration to produce ail-male populations by hormonal sex reversai with a natural androgen, 11 B-hydroxyandrostenedione ( 11 B-OH~4) (Baroiller and Toguyeni, this vol.). Fry were fed ad libitum six times a day and seven days a week using firstfeeding salmonid feed (Aqualim) distributed by an automatic feeder during the 12-hour photoperiod. Seventeen sex reversed male progenies were used in the present study. After treatment, batches of one month-old fry were stocked individually in externat 1 .5-m 3 tanks where they were fed ad libitum six times a day and six days a week until sexing at 60-90 dPF.

Jdentlflcatlon oF the Phenotyplc Sex

At a minimal age of two to three months, when the histological characteristics of the male and female differentiation are already established (Baroiller 1988a(Baroiller , 1988b)), ail fry from each batch were dissected and their gonads examined by simple squash, using a t 25X microscope.

The presence of previtellogenic or vitellogenic oocytes and the lobular configuration revealed the ovary and the testis, respectively, and consequently the phenotypic sex.

Results

The mean survival rate (5) at the time of sexing did not differ significantly between the contrai batches reared at temperatures of 26-29°C (S = 76.2% for 1,879 sexed fry) and the batches subjected to hlgher temperatures ranging from 30 to 36°C (S = 74.2% for 2,880 fry). These survivais produced batches of an average of 1 OO individuals at the time of sexing.

For three families offry MXX9 x FXX10, MXX9 x FXX 11 and MXX7 x FXX7, two contrai batches were reared at a mean temperature of 28°C (Tables 1 and2). No significant difference was observed in the sex ratio among batches of the same family.

Seventeen families of fry, each divided into several batches, were reared at two temperatures: 20 batches served as contrais (temperatures of 26-29°C); and 32 batches were exposed to higher rearing temperatures ranging from 30 to 36°C (Table 3). Compared to con trois, 16 of these familles showed different sex ratios in at least one of the experimental batches (Tables 1 and2, Fig. 1). These deviations in sex ratios cannot be attributed to differential mortalities related to high temperatures. The low mortality rate observed in most batches does not sufficiently explain these large deviations. ln the XX17 x XXl 1 cross especially, the seven and six deaths observed in the contrai batch and in the batch exposed to 36°C, respectively, cannot explain the difference of 91% of males between the two populations of 99 and 1 OO fry previously identified. The sex ratios of progenies from sex reversed 249 males of O. niloticuswere therefore directly influenced by the high rearing temperatures.

No slgniflcant difference in sex ratios was observed between the batches exposed to 31 °C and the contrai batch (Table 3). Among the sex ratios of six batches exposed to 32-33°C, l'ive ofthem were significantly biased towards the males compared to the percentages observed in the contrai batches exposed to 2 7°C (Table 3). Between 34 and 36°C, 20 batches out of 23 showed significant changes in the percentage of males as compared to thelr respective contrai batches. For temperatures ;::; 32°C, proportions of males in experimental populations increased from 0 to 91 % as compared to the contrai• sex ratios.

The intensity of response was neither directly proportional to the temperature applied, nor to the percentage of males produced at the contrai temperature. Progenies differed significantly in their sensitivity to temperature, both vis-à-vis an effective minimal temperature and in the extent of deviation in sex ratios in identical culture conditions. ln experiments using the same temperature of 36°C, changing male sex ratios (14.1 to 91 %) were observed depending on the progenies (Tables 1 and2). Strong paternal (XX9 x XX16/XX18 x XX.16) and maternai (XX17 x XX15/XX17 x XX11) influences were observed on the thermosensltivity of the progenies (Table 3). However, the proportion of males increased with the temperature in nearly ail experimental batches.

Out of ail progenies used, only one family showed no deviation in sex ratio regardless of the temperature used. ln contrast to ail other experiments, temperature treatments were applied to fry from the XX4 x XXS cross only after 15 dPF instead of 9-13 dPF. This result probably reflects a critical period of thermosensltivity. Beyond certain stages of differentiation, the gonadal sex may no longer be influenced by external factors such as temperature.

The progeny from the XX t 7 x XX 11 cross, with a sex ratio corresponding to the expected sex ratio following a simple genetic model in a se.x reversed male of O. niloticus, also showed a thetmosensitive differentiation.

Similarly, the progeny of an unexpected male (male 03) from a cross between a sex reversed male and a normal female also showed a thermosensitive differentiation.

zsz

Discussion

Very few studies have analyzed the environmental factors possibly involved in the sex determination of fish. Most studies have focused exdusively on hermaphrodite species. ln these species, the influence of environmental fac.tors on natural sex reversai has been demonstrated (reviews of Reinboth 1975; [START_REF] Chan | Sex contrai and sex reversai in fish under natural conditions[END_REF]. ln RJvulus marmorâtusespecially, low temperatures produced primary males (Harrington 196 7, 1968) and variations in the photoperiod resulted in the production of secondary males [START_REF] Harrington | How ecologlcal and genetlc factors lnteract to determlne when self-fertillzlng hermaphrodites of Rlvulus marmoratus change into functlonal secondary males. with a reappraisal of the modes of intersexuallty among fishes[END_REF]. ln gonochoristic species, only the studies on Menidia menidia. [START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF]Kynard 1981 : Conover 1984;[START_REF] Conover | Temperature sensitive period of sex determination in Men/dia menidia[END_REF][START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF]Heins 1987 a, 1987b) clearly demonstrated the effect of externat factors. Based on samples taken from the wild. a species of the same genus.

M. peninsulae, may also . show thermosensitivity [START_REF] Middaugh | Influence of envlronmental temperature on sex ratios ln the tldewater silverslde, Menidia peninsu/ae (Plsces: Atherinidae)[END_REF]. Studies on viviparous species such as Poeciliopsis /udda suggest an envi ronmental influence on sex determination. However, the deviations observed could be due to the effects of temperature (Sullivan and Schultz 1986), or of pH (Rubin 1985) on the physiology of the maternai parent, and might not reflect a direct effect on the embryo .. ln the rainbow trout ( Oncorhynchus mykiss), heat shocks of zs or Z9°C or longer exposures to 23°C do not significantly modify the sex ratio (Van den Hurk and Lambert 1982). ln tilapias, potential thermosensitivity has been studied in three species. ln O. aureus, O. nlloticus and their hybrids, low survivais (:::;; 26%) and the smalt average quantity of fry (23-28) produced in batches exposed to extreme temperatures ( 19.5 and 3Z 0 C) prevented differential mortality from being exduded as causal factor (Mair et al. 1990). In the same study, the sex ratios of two batches of O. mossa.mblcus exposed to 19-Z0°C differed signifîcantly from the sex ratios of their contrais, with a bias towards the male sex. However, the survivais (10.6 and 35.3%) and the number of fry ( 18 and 41, respectively) from batches exposed to low temperature did not lead to obvious conclusions. ln view of the re\atively high survivais and numbers of fry used in the present study, the hypothesis of a differential mortality cannot explain the deviations observed in the sex ratio of progenies from sex reversed males of O. niloticus.

Temperature may therefore have an effect on sex determination in O. niloticus. the proportions of males within a single family are, independent of the rearing temperature (26~36"C), under high paternal and maternai influences. At 34"C and above, a clear environmental effect on the sex ratio shows thermosensitive differentiation in progenies from sex reversed males of O. niloticus. ln M. menidia, the effect of temperature on the sex ratio is also under strong paternal influence: some progenies do not seem to be affected by the rearing temperatures; significant male and female percentages are observed at extreme temperatures (Conover and Heins 1987b). Sex determination in M. menidia.

is considered to be an intermediate step between an entirely genetic determina~ tian and an excfusively environmental determination (Conover and Heins 1987b). ln reptiles showing environmental sex de~ termination, an insignificant genetic base is found only in narrow ranges (sometimes only z °C) around the temperature thresholds and only one sex is produced at extreme temperatures [START_REF] Bull | Heritability of sex ratios in turtles wfth environmental sex determination[END_REF]; sex determination in such situations thus depends entirely on the environment. ln O. niloticus, the environmental intluence on sex determination can operate during a specific critical period of thermosensitivity: between 9 and 13 dPF. Beyond this range, sex dlfferentiation is probably irreversible, at least vis-à-vis externat factors, and would then correspond to the genotype. A Z 1-day thermal treatment yields 91 % maximum devlations if initiated before the 1 Sth dPF. Additional experiments are, however, necessary to determine accurately the duration of the critical period. Histologically, two basic events in oogenesis occur between 20 and 35 dPF at 27°C: oogonia proliferate between 20 and 28, dPF followed by the first prophase between ZS to 35 dPF, or 756 to 945 degrees x days (Baroiller 1988a and b). During the same period, the highly progressive multiplication of the somatic and spermatogonla occurs in the testis (Baroiller 1988a and b). The chronology of these events depends on the rearing temperature and seems to be more accurately determined by a number of degrees x days than by an absolute age (this study). During a Z 1-day treatment beginning 10 dPF, high temperatures are applied before and at the onset of these events. ln M. menidia, sensîtivity totemper ature also occurs du ring a predse crltlcal period at the end of which gonadal sex differentiation takes place. The time of occurrence and the duration of this perlod depend upon the temperature [START_REF] Conover | Environmental sex determînatîon: Interaction of temperature and genotype în[END_REF] ; Conover and Heins t 987b). The same occurs ln turtles (Yntema 1979;Pi eau and Dorizzi 1981) and in alligators [START_REF] Ferguson | Temperature of egg Incubation determlnes sex ln Alligator mississlplensls[END_REF].

The c:hronological characteristics of this period as determined in the present study correspond, as in reptiles [START_REF] Gutzke | Sensitive perlods durlng embryogeny for hormonally lnduced sex determination in turtles[END_REF] to the period of sensitivity to hormonal treatment in the same speci es (Barolller and Toguyeni, this vol.). ln O. nllotlcus, hormonal sex reversai treatments using an androgen identifled in vitro and testis-speciftc at the early stages of its ontogenesis (Baroiller 1988a and b) can be used to determine a period of hormonal sensltlvlty: to be efficient, the treatment with 1 t B-OH.::i4 should begin before t 5 dPF (Baroiller and Toguyeni, this vol.) and should last 21 days. However, 253 in thermosensitive turtle species such as Emys orbicularis, production of some steroids (estrogens), normally regulated via the genotype, would become thermodependent beyond certain critical temperature thresholds (Oorizzi et al. 1991). A thermosensitive factor may be involved in the regulation of the synthesis of enzymes that are specific to the estrogen production [START_REF] Pieau | Une hypothèse sur l'implication des hormones oestrogènes dans la différenciation sexuelle des gonades chei. les amphibiens, les reptiles et les oiseaux. ln •Association des physiologistes[END_REF]. The level of these steroids would then determine the phenotypk sex. Such pattern may exist in most species with thermodependent sex determination (Zarborskl et al. 1988).

Recent studies of O. nlloticus show that this type of environmental sex determination is found in progenles from normal males and females (Baroiller et al .. unpublished data). ln O. niloticus, sensitivity to temperature similar to that observed in M. men/dia is described in the present study. The 34°C thermal threshold for thermosensitivity can be experienced by tilaplas in the wild as well as in culture conditions (Denzer 1968: Philippart and Ruwet t 982). This characteristic in sex determlnation could explain part of the unexpected results described in the literature. Environmental sex determination could be far more common than initially believed [START_REF] Conover | Adaptative signlflcance of temperature dependent sex determlnatlon •ln a flsh[END_REF]Zaborski et al. t 988). ln the platyflsh (Xlphophorus maculatus) in which genetic determination is well-establlshed, unexpected sex ratios have also been observed, induding some within a population. Long and complex studies have shown autosomal interactions in species possessing several sex-specifîc markers [START_REF] Kallman | A new look at sex determination in poeclllld flshes[END_REF]. ln view ofthese experimental difficulties, these analyses calinot be reasonably conducted on ail species presenting unexplained sex ratios. The present study suggests that a potential thermosensitivity in the species studied should first be investigated before undertakîng further studies.

Table 1_ Characterlstlcs of Oreochromls nJJotlcus fry reare:d at dlfferent te-mperatures: for detalls of parental crosses, see text. Pare-rital cross

 1_ Effects of temperature {Z7-36°C) on the percentages of males in the progeny of Oreodlromis nllotlcus from various parental crosses: for details on parental crosses, see Table1and text; scale bars represent standard errors and asterisks represent levels of slgnlflcant dlfferences of the hlgh temperature from lower temperatures ln that group (•p<0.05: .. p<0.01; ... p<0.001).

		r•c	lnl!lal age Survlval	Survlval	Male-s
	(MX F)	(± range)	(dPF)		(no_)	(%)	(no.)		(%)
												M
	XX X XX	Z7±2 35±2		13 13		141 67	47 22		36 56		25.5 83.6	62.05 T T
	XXO xXXO	26;,2.5 eo		10		152	76		34		22.4
	XX1 xXXl XX4xXX7 XX4xXX5 XX4x XX5	34: l.5 36:1.5 27:2 31:1.5 36±2 Z9=l 31±1 35., l.5 36: l.5 28±1 34±1 35±1 E 60 • • "S 0 8 .e c 40 • ~ l. 28±1.5 20		10 10 9 9 9 10 10 10 10 15 15 15 9		125 23 96 78 80 103 109 105 54 101 110 98 104	62.5 11.5 90.6 73.6 25 94.5 100 96.3 49_5 84.2 91.7 81.7 36 95_4	ll4 î 29 28	107 20 1 0 2.0 l 2 13 15 4 9 5 3	'" î	85.6 86.9 l 0 25 1 1.8 12.4 27.8 4 8.2 5.1 ~ 2.9 34T	'O T	109.74 39.1 0.011 21.61 0.002 9.04 24.96 0.97 0.002
		33.,1		9		101	92.7		14		13_9	6.73
		36±1.5		9		67	61.5		38		56.7	61.86
	XX7 X XX7	Z8=l.5		Il		90	90		34		37.8
		28±1.5 35"'2	XXI	ll 11	XK4	89 88 XXII	89 88 XXl7	XX9	29 54	XX7	32.6 61.4 XXII	16.4 xxo
	XX9xXXl0	28±1.5		11		78	69.6 Sel< reverse<! males 27	34.6
		28±1.5		ll		68	60.7		23		33.8
	Fig. 1.	34±2,		ll		79	70.5	'41		51.9	6.63
	XX9xXX11	:Z8±1.5		10		104	97.2		10		9.6
		28±1		10		107	100		10		9_3
		34± 1.5		10		98	94.2		30		30.6	20.5
		35±1.5		10		93	89.4		47		50.5	63.3
	XX9xXX12	27±2		10		97	94.2		2		Z-1
		33± 1.5		10		80	77.7		10		12.5	5.99
		36±1.5		10		94	91.3		zo		21.3	15.46
	XX9 X XX16	28±1.5		10		21			3		14.3
		36±1.5		10		44			29		65.9	13.6
	XX1lxXXS	27±2-5		11		119	94_4		5		4.2
		34±2		11		119	94.4		4		3.4	0.000
		36± l.5		11		104	82.S		19		18.3	10.02
	XX17xXX15	27±2		10		54	51.9		2		3.7
		32= 1.5		10		92	88.5		IB		19.6	5.06
		36±2		10		81	77_9		39		48.1	28.2
	XXl7xXXl1	28±1.5		10		99	93.4		0		0
		3L±L5		10		106	100		8		7.5	5.89
		36±1.5		10		100	94.3		91		91	162.35
	XXl7xXXl6	28±1.5		10		53			21		39.6
		32±1.S		10		99			66		66.7	9_24
	XX18xXX16	28± l.5		12		101	95_3		4		4
		31 ±1.5		1Z		101	95.3		0		0	2.29
		3Z±1.5		12		93	87.7		1		1.2	0.66
		35±1		12		105	99.1		l		1.9	0.214
		36±2		lZ		67	63.2		zz		32.8	23.5
	XXD3 x XXl 7	:Z8±l.5		10		102	86.4		8		7.84
		34±1.5		10		118	100		71		60.2	62.83
		34± l.5		10		102	86.4		66		64.7	68.89
	'"p<0.05: .. p<0.01: ... p<0.001.

Control

x' (level of slgnlflcance)'

Table Z .

 Z Sex ratio responses in batches of

	Oreochromis niloticus fry reared at different
	temperatures.
	Temperatures	No. batches	No. significant
	{oC)	tested	responses
	31	3	0
	3Z 33	4 z	3 z
	34	7	6
	35	6	4
	36	10	10

Table 3 .

 3 Parental effect on the sex ratios of

	Oreochromls n/lotlcus fry reared at different
	temperatures: for details on parental crosses, see
	text.
			%Males
	Parental	Control at 36°C Dlfference•
	cross Mx f			{%)
	XX4xXX5	2.9	56.7	53.8
	XX4xXX7	1	27.8	26.8**
	XX9 xXX12	2.1	21.3	19.2
	XX9xXX16	14.3	65.9	51.6 ...
	XX17xXX15	3.7	48.1	44.4
	XX17xXX11	0	91	91* ..
	XX9 xXX16	14.3	65.9	51.6
	XX18xXX16	4	32.8	28.s••
	... p<0.01; ... p<0.001.

Acknowledgements

We would like to thank D. Chourrout for reviewing the manuscript and for hls valuable suggestions. This study was conducted under the Groupement de coopération scientifique sur les bases biologiques de l'aquaculture (GCS/ BBA) by the "Aquaculture tropicale" study group.


A Gohin

H Guyomard

C Le Mouë

AGE Assessment of CAP Reform: Implications of Policy Modeling Choices

Heterogeneous simulation results, particularly in terms oî signs oî effects. are not easi ly cornprehensible for pol icy makers. lt is well kno,, n that many factors can have a substantial bearing upon mode! outcomes. ln that context. the objective of th is paper is to high I ight the key importance of poli cy instrument mode li ng as regards to the assessment of the likely impacts oî the Agenda 2000 Common Agricultura l Policy refonn. We show that not on ly policy modeling matters. but also production tech no logy specifica tion which should be thought ro reproducc the work ing of policy instrument .

Introduction

The Agenda 2000 Common Agricultural Policy (CAP) reform adopted in Berlin on March 1999 dcepens and extends the 1992 Mc harry reform through further hifts îrom pricc support to di rect pay rne nts. Support prices are sign ifïcantly reduced for cereals, beef rneat and dairy products. and induced income decreascs are compensated by augmented direct payments to fa rmers linked to primary factors o f production.

Quant itative as essmcnts of the likely impacts of the Agenda 2000 CAP reîorm dilfer across studies.

An USDA synthesis report compares simulation resu lts obtaincd with ,•arious models. i.e .. the USDA-ERS analysis conducted using the ES IM model, the FA PRI ana lyses and two studies commi ss ioned by the Europea n Comm iss ion (EC) with the SPEL model and the CAPM AT mode l. respectively (US [START_REF] Da | Eu•s Agenda 2000 and Bcyond[END_REF]). 1 Ali model ing exercises concur that cereal area and production would increase in the European Union (EU). but the magnitude of expected rises varies across studies: wheat product ion increases range îrom + 3 % to +8 %. and coarsc grain prod uction increases range from + 1 % 10 +6 % (relative to a base line scenario corresponding to a 1999 CAP continuat ion scenario). Most studies fi nd that context. the main objective of th is paper is to highlight the key importance of CAP instrument modeling as regard s to the assessment oî the likely effects of the Agenda 2000 reform .

The cruc ial ro le oî poli cy instrument modeling has been recognized for a long lime. lt has been illustratcd , both analy tically and empirically . ln a general equilibrium framework. Whalley and [START_REF] Wigle | Terms o f Tracle Effects. Agricultu ra l Tracle Liberalization and Developing Countries[END_REF] how that the suppression of the US w hear program induces a po iti\'e cffect 011 agricultural income and a negative effect on w heat production w hen thi s program is modeled in an explic it way.

Rcsu lts are oppositt: in signs w hen the program is modeled in an implicit way. i.e .. using ad-va lorem eq uiva lenrs. ln the same spirit. Whalley ( 1986) and He1tel ( 1999) argue that the model ing of publ ic po licies is an important fèature. parti cularly in agriculture \\ here income tran sfcrs are high. public i111ene11tio11s are di\erse and many agri cul tura l policies are 1101 eas ily amenable to an ad-va lorem equi valent modeling. Mo re recently and more directl y relared 10 the modeling of CA P instruments.

iel sen ( 1999) highlights. \\ith the GTAP mode!. how simulation results o f an U E enlargemen t scenario are mod ified \\ hen shifting from an ad-valorem equiva lent ro an explicit mode ling of CA P po lie: instruments. The main differences. in term s of signs and magnitudes of eftcc ts. are obtained for the milk seetor. D iscrepancies are muc h more limited for the sector oîarable crops.

The contri bution of this paper relati ve to studies quoted above is twofold. Firstly. our analysis foc uses on the Agenda 2000 CA P reform. lt is clear that the sensitiv ity of mode! outcomes to policy in trurncnt modeling depends on simulated scenarios. T o our kn owledge. the Agenda 2000 reform has 1101 bcen in\,e~t igated on rhi s basis. Second ly. attention is centered on th e modeling o î CAP direct pa:, 111e111s. The fost reason is th at we bclieve. \\ ith others (see, e.g., S,\ inbank, 1999) that these CA P direct pay ments \\ ill constitute a key element in th e upcoming round o f agricultura l negotiations under the W orld T rade Organizati on ( WTO). The question is to know \\'hether th e Agenda 2000 CAP reîorm. in particu lar the sl ightly moclifïed system o î direct payments. represents a suîtic ient step in the direction o f a more decoupled EU agri cultural support policy 10 be acceptcd by other WTO rnember countri es. The second reason is 1ha1 the modeling o f the CA P direct paymenl system represents a di ffïcu 11 cha l lengc for appl iecl agri cu ltural econom ists (Salvat ici el al .. 2000). ln particu lar. capturing hO\\ 1hese direct paymctlls inreract \\ ith associated policy instruments inlended to con trol agricultural supply (set aside in the sector of cereals and oi lseeds. ceilings and max imum stocki ng clensity in the beef scctor) is not an easy task to dea I with .

Empirical consequences of modeling choiccs are ana lyzcd on the basis of simulations performed w ith the MEGAAF model. a CGE model o f the French economy foc used on agricultural and food sectors (Gohin et al., 1999a). T his CGE mode ! is characteri zed by a complete cli saggregation o f the French economy into sectors. products and primary factors of production. and deta iled specifïcations of production techno logies. household prefercnces and primat") factor mobi lit). These aspects are critical for the rele\ance o f CGE analysis ( Hertel. 1989 : Kilkenn y and Robinson 1990).

T hi:. paper is organized as follo\\S. Section 2 provide a brief overvie,\ of the MEGAAF mode!.

Section 3 gives a detailed description of the modeling o f main CA P policy instruments, with a particular emphasis on the two alternative methods of modeling CAP direct paymcnts. Section -1 defïn es simulation experiments. Section 5 analyses simulation results. Section 6 concludes.

Model overview

The structure of tht: M EGAA F mode! is outlined in Annex 1. lt is a static. agriculture-and agrifoodfocused CGE mode! of th e French economy benchmarked to data for 1994. The t\\O foreign regions. T he rnodc l i neoc la ical and Walrassian in spirit. in the tradition of Shoven and Whalley ( 1984).

The mode! identifies eight agricultural industries. seven food processing industries and eight industries for the resr o f the economy. The eight agricultural industries produce fo urteen agricultural products and the seven food processing industries produce twel ve food products. The industry and procluct di saggregation of the model is reported in Annex 2. The disaggregati on level on the production side is suffïciently detailed to capture the main forward and backward linkage among the various agricultural industries. as well as between the aforementioned agricultural industries, the food processing industries and the raw material suppliers. lt fa cilitates agricultural production technology moclelin g \\ here ubstitulion among intermediate inputs. and bet\\een intermediate and primat")' inputs. plays a crucial ro le. ln addition. it allows us to accurately represent the working o f main CA P instruments.

Production technologies are constant return s 10 sca le. They are modeled by means o f nested CES input production l'unct ions and CET product tran sformation functions. There is one reprcsentati ve household "hich sa,•es a fïxed proportion of ils disposai income. The househo ld's commod it) demands arc dcrived by constrained maximization of a nested Stone-Geary utility fun cti on. Foreign trade is modeled accord ing to the Armington specification "hich mea ns that do mestic and fôre ign goods are differentiated. France is a sumed 10 be a large country \\ ith respect to the RoEU. lt i assumed to be a smal I open econo my relati ve to the Ro W. with the exception of cerea ls and dairy products.

The resource cndo\, ment o f the economy consists of a f • ïxed supp ly of the three primary inputs. i.e .. labor. capital and land. Labor is assumed to be imperfectly mobile bel\\een the t\\ 0 industry aggregates. i.e .. the agricultural industry and an aggregate including ail other sectors. Labor is pcrfectly mobile across sectors belonging to a given aggregate. Capita l is fixed in each sector. Land is used by the various agricultura l sectors. lt is assumed to be imperfectl) mobile between the two agricu ltural su b-aggregates corresponding to the ector of arable cro ps and the li\estock sector. 1t is perfect l~ mobile across sectors belonging to a given agricultura l sub-aggregate.~

The French govcrnmcnt is modelcd as an explicit. but non-optimizing agent. lt uses its income to save (in lixed proportio n) and fo r purchases of" labor services. subsidy cxpenditures. tran C cr payments to the domestic household and the two fo reign zones. Nominal government demand in services is set exogeno usl). The French government budget is balanced th ro ugh transfer to/fro m the domestic household and the RoEU. The European Agricultural Guidance and Guarantce Fund (EAGGF) is modeled in a simplified way. lt pays ail input. o utput and export subsidies corresponding to CA P e:\pend itures. Ils budget i balanccd th rough income transfe rs fro m the RoEU .

The mode! is so lved in a neoclassica l way. lnvestment is savings driven. The balance of payments with respect to the RoEU is ba lanced through the domestic defic it/surplus relative to this forcign zone.

The balance of paymcnts with respect 10 the RoW is constrained by an extcrnally de fin ed deficit level. and the mode! is sohed for the rea l equilibrium exchange rate.

Mocleling the Common Agric ultural Policy

The Agenda 2000 CA P reform involves significant changes in the thrce Common Market Organizations (CMOs) o r ara ble crops (cerea ls. oilseeds and protein crops. hereafter CO P crops). beef mcat. and milk and dair) products. Main changes in the milk C MO have been delayed to 2005 and some arc still subject to de bate. As a rcsult, they are not considered in this paper.' Changes in the two other CMOs w ill become e ffective in 2000. In the secto r of COP crops. the) include a eut in the intervention price of cerea ls, a compensation of induced income decreascs by augmented area direct pa) ments and the an nuai l'ixing or a rnand a101 ") set-as ide rate. ln the beef scctor. the) include a eut in rh e intervention pricc. a com pensat ion of income decrcase by augmcnted headage payments and uppl) control measures , ia the fixing of outlay cei lings and stocking densit) constraints. We first describe the modeling o f the intervention mechanism in fo rce in both the sector of COP crops and the ector of beef" meat. We continue by a description of the two modeling strategie (i.e .. explicit and irnplicit) uscd to capture production and income effects or direct aids.

Mocleling the intervention mechanism

The basic e lemcnts or the EU legislation applied to cereals and bo, ine meat includc public purchases at minimum intcn ention prices. export ub idie and protect ion aga in t imports through tari ffs. The intencntion price is the dclivered to store price at which EU purchases. th rough national boards. are made . ln practice, intervention buying serves to ma intain EU market prices at a minimum lcvel in a regime ,, here domestic suppl y cxcecds internai demand.

We a sumc that French cereals and bovi ne meat that arc initia lly purchased for public storage can be d ispo cd of on the French market. exported to RoEU markets. and/or exported ro Ro W markets through the use of variable export subs idies. The latter are intended to bridge the gap between French and ,, orld prices.~ We assume that domestically producecl cereals (respectively. bovi ne meat) for sale o n the two export markets are perfect substitutes fo r dome tically produccd cerca ls (respecti vcly. bov ine meat) for sale on the French market. This assumption is more rea listic than the alternative of imperfect substitutabilit) because the intervention mechan ism largely prevenrs French farmers from ditTercntiating production accord ing to destination markets in a regime of excess suppl) and suppon pnccs.

To :.implif) notation. ,,e have dropped the i subscri pt correspond ing 10 the commod it) (i.e .. bo, ine meat and the four types of cereals distinguished in the model. common \\ hear, barley. maize and other cerea ls ). The perfect s ubstitutabi lit y assumption impl ies that the standard CET export aggregation function is replacecl by a si mpl e sum and that equili brium prices of domesti c sales. cxports to the RoEU and exports to the RoW are ail cqual, i.e ..

(1)

f = PD = PEI/oil = PE/lo/1• (2)
"herc )' i the domestic production with price P. YD is the domesticall) produced com modity sold on the French market with price PD. EJ/o!ï' are exports to the RoEU with price PE 110 11" . and E 11011 are exports to the Ro W with price P E 110 w .

To accommodate the intervention price regime (P =PI. where Pl is the intervent ion price) and the compctiti\e price rcgimc (P'-P/) s imu ltaneousl). \\C use the mixed-complementarity approach (Rutherfo rd. 1995: Lofgren and Robinson. 1997) b) specifying a set ofinequalities-eq ua lities:

P 2: Pl (Ja) S.(P -P/) = 0 (3b)
"ith S = s.P. E 11 ,, 11 . \\ here Sare export subs idies and sis the ad-valorem unit ex port subsidy.

Equations (Ja) and (Jb) shO\\ that the priee regime is endogenously determined. When export subsidies S are strictly positi ve, the dornestic market price P is equal to the intervention price Pl. The latter is strictly greater than the world export price and the uni t export subsidy covers the difference bet\\een bot h prices according 10 the following equa1ion:

!'! = !'WE, 1 ,, 11 .ER, 1 ,, 11 .1(1 -s) (4)
"here PWE 11 ,, 11 is the export world pri ce in worlcl currencies and ER,/11 11 is the exchange rate\\ ith respect to the RoW.

When export subs idies S equal zero. the domestic market pricc P is greater than the inten ention price

Pl. This can ari se when the unit export subsidy is nu ll ( in that case. P = PWE 11 ,, 11 .ERu,,11 ) and/or when e:-. port s 10 the RoW cq ual zero.

Mode ling the mechanism o f direct aids appliecl in the COP secto r

Area direct payments were introduced in 1992 in the COP sector to offset income c ffect due to support price recluctions. Payments were based on historical average yie lds and they were limited 10 a aggregate hi storical base area. Producers of CO P crops got these payments onl y if they set as ide part or the ir land . T he set-aside rate \\as fïxed annually and compensation for et aside was also paid on a per hectare bas is. 5 Payments va ried accord ing to commod ities. paymen1s for oilseeds and protein crops being greater than payments fo r cerea ls. With the Agenda 2000. per hectare paymen1s are 110\\ eq ua l for a il COP crops and for the land set as ide, w ith the exception of prote in crops and durum wheat.

Thi s S) stem or per hectare direct payments has been mode led in scvera I ways in the applied general equilibrium literature (Weyerbroc k. 1998: Je nsen et al., 1998; Kcyser and Merbis, 1998: Nielsen.

5 COP producers may also set aside additional areas on a voluntary basis and receive area compensatory payments m return.

6 1999 : Blake et al .. 1999)6 The t\\'O e.x tremes are the fully cou pied approach ( in that case. aids are rnodeled as output subsidies) and the /"ully decoupled approach ( in that case. aicls are moclelecl as lump-sum transfers). ln this paper. \\e analyze the consequences of consiclering and mode ling per hectare direct payments either as land subsidies ( hereafter. the e.xplicit approach) or as output subsidies (hereafter. the implicit approach).

T he e.xplic it modeling strategy considers direct pay ments app lied in the COP sector as land subsidies.

The t\\ O area constraints. i .e .. the base area constraint and the compulsor) set-aside con trai nt. are also modeled in an explicit way . More precisely. COP producer s maxirnize their prolit subject to tcchnological and market constraint s.

"herc I, is th e area devoted to crop i. p , is the producer price o f crop i. fr is the marl-.et price of land used in the sector of CO P c rops. a, is the per hectare direct pa) ment for crop i. The ~et-as ide requircment is captured by the folio\\ ing eq uation:

Il = o.L<"<JI' = o.(LI, (.) + Il ) = ~ LI,(.) , -a , (7)
"here !( is the land let in fallo\\ under the compulsory set-aside program. a is th e mandatory setasicle rate. and Lrn,• is total land devoted to ail COP crops. incl uding cultivatecl as well as nonctdti, ated area. The mandatory set-aside rate is exogenous. but total land let in fa llo\\ is endogenous because Lm,• is an enclogenous variable (eventually constrained by the base area limit).

fhe base area con traint is al o introduced using the mixed-complementarity approac h so chat the ~tatus of the constraint (i .e .. bi nding or not) is endogenously deterrnined. Due to the land imperfect mobili t) a umption. the land-O\\ ner program rnay be defïned as fo llo,, s:

(8)

subject to:

(Sa) (8b)
w here irrn 1 , is the price of land used in th e COP sector. Ln!/' is the corresponding area. Wron is th e price of land used in the livestock sectors. Lmn is the corresponding area, L is tota l agricul tural land, and L< 111 , is the base area limit. Constraint ( Sb) is introduced in a complementary fashion. '

l n th e impl ic it modeling strategy, per hectare direct payments are modeled as output subsidies.

Eq uations ( 5) and ( 6) no longer hold . They are replaced by the fo llowing eq uations: 8

/ 1 (.)=l,(p, + s,. w,v) [START_REF]Three institutional scc tors: a sing le representative consumer. the French government and the European Agricultura I G uidance and Guarantee Fund ( common ly kno[END_REF] D< o1• = L s,y , This results in a price weclge between the market price of ca pital and the price of capital paid by canle fa rmers ho lding suckler cows. Male animais correspond to final products sole! by cattl e farmers to th e slaugh terin g industry . The special premium for male anima is is thu s considerecl as an output subsidy for cattle farmers producing bull s and steers. T he slaughter premium is also modeled as an output 7 Details are ava ilable from the authors upon request. 6 The Iwo area constraints are modeled in the same way in both the explicit and the implicit case.

sub:, id) . lt is percei,•ed by th e t\\ 0 agricultural sub-sectors producing bovine animais. i .e .. the clair)

farming and the beef farming. The rate of cach premium is cleterrninecl enclogenously so that corresponding outla) cei lings arc sarisfiecl.

ln th e implic it mocl eling case. only the suc kler CO\\' mocleling is rnod ifïecl. lt is n0\\' an output subsidy.

Ils rate is endogeno u ly defincd in th e same \\ ay th at special premium and slaughter premium rates are calibrated .

-t Experime nt design

Four experimcnts are performed. They are summari zed in Table 1. The folio" ing as umptions are common to all scenari os. As far as the COP sec tor is concerned. the intervention fo r cereals is decrcased by -22.90 % with respec t to 1994 to reach 101.30 euros per ton : the compulsor) et-a ide rate is fixcd to 1 0 % w h ich corresponds to a dccrease o f -33 .33 % "ith respect to th e 1994 rate : the per hectare pay ment is equa l to 63 euros for ail COP crops and for land se t aside: and the base area is cqual to the sum of 1994 areas devoted to CO P crops or let in fa ll ow (in other word s. the base area constraint is binding and the corresponding dual value is initially equal to zero). As far as the beef

. ector is concerned. the inter vention pricc for bovine meat is decreased by -25 % relative to 1994 to rcach 2224 euros per ton : and publi c expend iture ceilings are frxed to 3080 million French Francs for the spec ial premium and to 3070 million French Francs for the slaughter premium (Chatc llier. 1999).

ln experiment 1. ail direct payments are modeled in an explicit way. The land subsidy rate corresponds to an equi va lent o f 63 euros per ton for cereals and oilseeds. and to an equi valent of 72 .5 euros per ton for protein crops (in French francs and relati ve to 1994, these figures represcnt a +48 % increase for ccrcals. a -1 7.13 % decrca c for oil ecds and a -3.35% decrease fo r protcin crop ). Public expend itures corre:,poncling to suckler CO\\ premia arc increascd from -1096 milli on French Francs to 6385 million Frenc h francs (Chatcllier. 1999). ln cxperimcnt 2. ail direct pay ments arc modclecl in an implicit "a).

i.e., as output subsidies. Output subsicly rates are endogenous. T hey are adjusted to reprod uce premium outlay obtained in experim ent 1.

Ex pcriment s 3 and 4 are perforrnecl fo r comparison reasons. ln experirnent 3. direct pay rn ents applied in th e COP sector are modeled as output subsidies, but th e suckler cow prernium is considerecl as a capital subsicly. On the contrary. in experiment 4, direct payments applied in the COP sector are rn ocleled in an explic i1 manner. but the suc kler CO\\ premium is considered as an ou tput subsid). (cffccts o n agricultural incarnes. public expenditures and national ,,elfare).

Experi111e11/ 1

Let us first consider experiment I which corresponds to the explicit modeling assumption of ai l di rect pa) ments. This experiment leacls to domestic production decreascs fo r ail COP crops. the supply of common "hcat falling the most (-8.41 % relative to th e base) and the suppl y o fprotein crops fal ling the lea t (-1. 77 % relai i\'c to the base). The suppl y of oi lseeds decreases b) a larger perccntage (-6.36 %) than the suppl y of barley (-5.92 %) and maize (-4.40 %).

Market price rcductio ns are equal to intervention price culs fo r wheat and barley. ln the case o f maize.

the market price decrcase is lo,,er than the interventio n price eut (respecti, cl) . Total domestic demand (!ceci demand and food demand) increases by large percentages for a il cereals (+ 15.10 % for barley. +6.1 6 % for ,,heat and +3.90 % for maize). France continue to export \\heat and barle) to the RoW. rhanks to (reduced) export subsidies. but exported , o lumcs dccrease b) drasric percentages relative to the base (-77.98 % for wheat and -73.92 % fo r barley).

Thi~ fïrst experiment affects a lso animal productions and markets. ln a genera l way. simulated effects arc less marked rhan in the case of COP crops. The intervention price constraint is not binding for bo, ine mear in the tina l s ituation. The price of bovine meat is thus the market pricc ,, hich ensures that the French market clears. Accordingly. the market pricc rcduction or bov ine meat is (signifïcantly) lo\\cr than the corresponding intervention priee cul (respecti ve ly. -12.79 % and -25.00 %). The market pricc deerease o f beef cattle (-15 .08 % ) is si ightly more pronounced than the market priee decrease or bovine meat. Market prices of pork and poultry adjust to market price decreases of eerea ls. However.

price declines are low relative to price decreases of eereals (-4.06 % for poultry and -2.52 % fo r poultr) meat. -5.12 % for pigs and -2.99 % for pig meat). The combinecl effecr of unequal priee reductions for the various animal productions is to increase the price compet iti ,enes of beef relati,e tu pork and poultry. On the clomestic demand sicle. own-and cross-price cffects lavor beef meat consumption relati, e to poultry meat and pig meat. Experi ment I leads to a production decrease for pork and poultr') and to a production increa e for beef (thanks to the threc types ol' premia "hich offset the market price decrcase ). ( 1) i\lillions of' 199-l French Francs. Cl\Ccpt l'or priccs "hich an: nonnalil'.cd tn 1. Let us no,, con ider the land market. Ta ble 3 suggests that the Agenda 2000 CAP reform ,, 01ild not lcad 10 a drastic c hange in land al locat ion bet" een the COP and li, estock sec tors. Land returns dccrease b) -5 .71 % in the COP sector and by-4.71 % in the li vestod, sector. As a result. land used in the COP sector dec rcases slightl) (-0.3 8 % relative to the base) and land used in the li,estock sector increases sli ghtly (+0.78 % relative to the base). These figures imply in particular that the base area constra int is not binding in the fina l situati on. At this stage. it is important to recall that land is as umed to be imperfectly mobile between the two a forernentioned agricultural sub-aggregates which \\hereas they decrease in experirnent 1 (-77.98 %). Export change differences are less marked for barley (because the positive effect on production is sma ll) and maize (becau e the increase in dome tic consumption is much h igher in cxperiment 2 relati ve 10 experiment 1. respecti, ely. + 16.85 % and -r-3 .90 %. and offsets part of th e higher production increasc).

For oi lseeds and prorein crops. differences between both experiments are much less important. ln a genera l way, effects are identical in signs but orders of magnitude are IO\\er in experiment 2 relati ve to experiment 1. T he sa me remark applies to the anima l sector except that e ffects are n0\\ higher in e.,periment 2 re lative to cxperiment perccntage (-1.28 % ).

T he aforcmentionecl consequenccs o f po licy modeling ehoice on product ion and .:, iclds depend c lo cl: on substitution poss ibi I ities bet\\'ccn land and other inputs ( Hertel. 1989: Goh in et al.. 1999b ).

T hi~ clearl) cla ims l'or a detailed speci fïca tion o f production technologies.

Concluding remarks

The need for an explicit modeling o f public policies ,,as one o f the hidden clrn llenges in applied gencral equ ili bri um analys is idcntified by Whalley fifteen y cars ago (Whallcy. 1986). O ur analysis show s that particular attent ion should be devoted to modeling not only policy instruments. but also prod uction technologies because a detailed spec ifïcation of the latter is a necessary condition to well imitate the \\ Orking of agricu ltural poli cies.

l n th e specifïc case o f per hectare direct payments applied on cerea ls. o ilseeds and protein crops.

experiment result s highlight the key ro le of assumed substi tution possibilities between land and oth er inpu ts. in particular fertili zer s and pesticides. Of course. the clifficult problcm of substitution elasticity ca libration c laims fo r sensitivity ana lyses to examine result robustness. l n th e sa me way. sensiti v ity anal) ses should be performed to tud y consequcnccs of various assumption on land mobi lity. 9 ln ail experiments, there is also a negative own-price effect on production due to the intervention pnce eut I: urthcr rcscarch is nccessary. in particular because pol ie) im plications o r CAP rerorm assessments are di, ergcnt if tlic) lead 10 production decreascs (in th at case. ne" policy arrangements cou Id be considered as less distorting in the context of WTO negot iarions) or i f they lead to production increases (" hich means that the ne\\ system remains as d istorting as th e 1992 mechan ism \vas). T his is 11 0 1 a trivia l maner.

  i.e .. the Rest o r th e European Union (RoEU) and the Rest o f the World ( Ro W). are incorporated in a reduced manner as th ey simply enter as suppliers or French imports and demanders of French exports.

  the mechanism of direct aicls applied in the beef sector ln the beef sector. th e intervention rnechani sm a pp lies to bovine meat but direct aids are based on li ve animais. i.e .. on livestock units. The 1992 CAP included two main types of headage pay ments. i .e .. a spccial premium for male animais (bul ls and steers) and a premium for maintaining suckler cow herds.Both types of prem ia might be supplemented by an ex tensification premium granted i f th e stocking density was low. T he Agenda 2000 CAP reform introduces an additional slaughter premium w hich concern s bulls, steer s, cows, heifers and calves. A li ty pes of premia are subject to cei l ings w hich are detïnecl in fon ction of histori cal references and density constrain ts . If the number of claims for one gi ven premium exceeds the cei ling in any year, then ail claims are scalecl back proportionately. As a resul t. public outlays are capped for each premium. ln the explicit modeling case, we consider th at suck ler CO\\S are pan o f the capi tal used by cattle farmers to produce slaughter animais. The suckler cow premium is thu s modeled as a capital subsidy.

  -16.01 % and -22.90 % ) because ,, e movc from a b indi ng intervention price regime to a compctitivc pricc reg1me. The market price o f nrn iLc becomes an endogenous, ariable ,, hieh adjusts so that the French maize market clcars. As a consequcnce. French exports of maize to the Ro\V vanish. The market price of protei n crops expericnces a slight decrease (-1.10 %) and the market price of o ilseeds increases by a rather large percentage (+5.1-+ %).

  subsidie~. FertiliLer and pesticide uses increase by maller percentages ( respecti vc ly. + 3.33 % and _,_--1 .87 %) relat i, c to th e area under \\heat (+ 7.--18 % ). Wheat yielcl decrea se on ly by a very small ')

  Thi s paper illustrates this point in the particular case o f direct payments granted to European farmcrs under both th e McSharr) and the Agenda 2000 C AP.

  The fi rst-order conditions o f this program determine 111 parti cular the optimal derived demand for land used for each crop. This derived demand is a fu nction o f the corre sponding crop price. the market price of land minus th e land subsid). and , ari able input

prices (i.e .. fertil izers. pesticides. etc.)

. Per hectare direct pa) ment have thu a direct effect 0 11 land demands used for each crop. Corresponding e.xpenditures are si mpl) obtained b) summing O\er ail crop benefïting from the per hectare compensation system. I, (.) = /,

(p, .ïiï -a,.,•)

(5)

Table 1 .

 1 Ex pcrimcnt design

	. \ ssu111p1 ions		/\Il e,pcri111c1ll,
	( "()/' \<.'('/()/"
	1 n1,n c1111011 prn:, for <.:ereals	101 .30 euros per ton
	Sct-asick rate		10 °o
	Set-as ide pa~ ment		63 euros per ton
	Base area		Land used in the COP sector in 199-1. including land let in lhllo11
	/Jee/ .vec1or
	1 Ilien Clllllln pnc:c		222-1 euros per Ion
	\ lak pn.:mium out la,,		3080 million I rcnch 1•rancs
	Slaugl11..:r premium out la),	3070 rnillion Fn:neh Fra ncs
		1. ,p. 1		E,p. 2	E,p. 3	1 ,p. -1
		(explicit exp.)	(implicil exp.)	(implicil COP e,p.)	( impl ici1 suckkr exp.)
	Direct pa~ mcnts in the Land , ubsidies:	Output subsidies:	Output subsidi..:s:	Land subsidies:
	COI' Sc'ctor	63 euros ton for	l{ates acljustcd tn	Rates adj usted to	63 t:uros ton for
		ccreab and oi lseeds	rcproducc exp. 1	rcproducc exp. 1	c..:reals and oilscccb
		72.5 1::uros1ron for	out la) s	ou1la~s	72.5 t:uros/ton for
		protein crops			protein crops
	Suckler cm1 pn:miurn	Capital subsidy:	Output subsid~:	Capital subsid~:	Output subsid~ •
		Rate ad_justcd so thm	Rate adjustcd so that	Rat.: ad_ justcd so that	Rate adjustcd so that
		out la~ s n:ach 6385	out la) s reach 6385	out la~ s rcach 6385	out la~, rcach 6385
		million Fn:nch Francs	rnillion French francs	million French francs	mill ion l' rcnch francs
	5. Expcriment results

Attentio n is focused on the agricult ural sector. Ex periment re ults are presented in Tabl e 2 (effects on production. market prices. export . and do mestic use). Table 3 (effects on land allocation) and Table --l

Tal>le 2. Experiment res ults: Impacts on agricultural markets (changes in prr cent with respect to th r base)

	\ 'anabk,	Base > car ( 1 )	E,p. 1	1-,. ,p. 2	hp. 3	bp. -1
	( ( li' prnduL'IJon
	\\î1ca1	25 221	-8.-11	-6.20	-,-(>,5-1	-8.8-1
	Bark>	6 713	-5.92	+ 1.-16	+ 1.78	-6.36
	\laiLe	12 926	--1.-10	+ 11.62	-11 .97	--1. 72
	Oi lscccb	6 953	-6.36	--1. IJ	-3.93	-6.6-1
	l'rotc1n crops	2 890	-1 77	--1.07	-3.8..J	-2. 11
	COI' 111arl--c1 pricc,
	\\ hc'al		-22.90	-22.90	-22.90	-22.90
	llark>		-22.90	-22.90	-22.90	-22.90
	Maize		-1 6.0 1	-22.90	-22 90	-15.86
	Oilsccds		+5. 1-1	-3.57	73.39	+5.38
	l'rotc111 crops		-1.1 0	-.-0.30	-'-0 12	-0.8.J
	1 ,po1'1\ tt> the !{()\\ '
	\\ hca1	-1-116	-77.98	-6.21	+8.23	-80.6 1
	llarlc:	1 592	-73.92	-39. 78	-3 7.86	-76.55
	\lail'.e	1 535	-100	-7638	-7.J.23	-1 00
	Domi:stic use
	\\'heat	15 0 19	+6.16	+6.00	~5_99	+6.20
	13ark,	' 102 •'	+ 15. 10	+ I.J . 16	+ IJ.98	"-15 35
	\lai/c	5966	-'-3.90	-.-16.85	-16.96	-3.58
	1 I\C ani1nal,
	llcci"catlk	-1.J 525	T 1.06	... 1.31	-1-10	+2.22
	l'oullr:	27 099	-0.39	-0.65	-0 -1-1	-0.67
	1'01•k	18 8.J3	-2.60	-3.02	-2.ô9	-3.02
	Li, c animal pric.:s
	Ile..:!" cat1k		-1 5.08	-17.-11	-15.77	-17. 19
	l'oullr:		--Ul6	-.J .31	--1.31	--l .06
	l'ml--		-5. 12	-5.-1 7	-5.-18	-5. 10
	M..:at production
	13ovin.: 111ea1	54 572	+0.43	+ 1.54	+0.73	+ l .46
	Pou ltr: mc:at	30 500	-1.20	-1.55	-1.25	-1. 58
	l'i g 111ca1	66 196	-2.61	-3 03	-2.70	-3.03
	, \ 1 c.11 111arl--ct pricc,
	llo, 1nc 111..:al		-12.79	-1-l.53	-13 J 1	-1-1 .35
	l'oultr> 111cat		-2.52	-2.78	-2 70	-2 63
	1'1g rncat		-2.99	-3.39	-3.18	-3.26

  1 im its. ccteris pari bu s. area al location changes. l lo,,c, cr. c.xpcrim ent I results in importa nt land u c changes bet,,ecn COP crops. The arca under ccreals increases by +6.3 7 % for wheat. + 9.08 % fo r barlcy and + 12. 13 % for rnaize. The area under protein crops ri ses by a higher percentage (+43 .62 %) because the price decrea e is much ,, eaker (-1. I O % ) and the per hectare premium is higher (72.5 euros per ton insteacl of 63 e uros per 10 11). The area uncler oilseccls dccrease by a very large pcrcentage(-26.43 %). Land margina l protitability for oil eed is reduced relati,el) to other COP crops because of the decrease in per hectare payments granted to oilseeds.

Table 3 .

 3 Expcri mcnt rcsults: Impacts o n land allocation (c han ges in per cent with respect to the base) .xperiment I induces a -5.28 % dcc rease in va lue added in the French sector or COP crops. On the contrar). bee f cattle producers e.xperience an +7. 16 % increase in ,alue adcled. At thi stage. the fo llo\\ ing caveat is in orcler. These va lue added change fi gures are clefined relati, c to a particular base year, i.e., 1994. Impacts on va lue aclded are positive for beef producers mainly becausc the market price decrease does 1101 adjust 10 the inten cnrion price eut. This outcome is parti) duc 10 the fact that 199-l data correspond 10 a through in production cycle. Impacts on ,alue added for CO P producers are ncgati, e because market prices of ,, heat a nd barley adjust 10 lo\\ ered inten ention prices and per hectare compensatory payments are no! sufficient to offset these price clecrea e . Valued added of dair, fa rmers is a lmost unchanged (+0.54 %). but polie) changes in thi s sector ha,e 110 1 been taken into account.EAGGF expenclitures increase by+7.96 % re lative to the base. ma inly because direct payments increase (+31.22 % in the CO P sector and + 124.76 % in the livcstock sector). As expected. expo1 1 sub idics dccrease substantially (lhey vanish in the beef scctor). but this is not sufficient to offset the incrca~c in per hectare and hcadage payments. Expcrimcnt I results in an overa ll clomestic ,,elfare gain of , 7 98 7 million Fre nch Francs \\ith respect 10 1994.

	Variahk,	13a,c ~ t:ar ( 1 )	1 -. ,p. 1	1:-.p. 2	L,p 3	b ,p. -1
	1 and allocation
	\\'lu:a1	12 635	+6.37	+7.-1 8	+7. 83	-5.88
	13ark~	-1 0 15	+9.08	-,-2,69	+3 03	+8.58
	\lai1.:	-1 780	+ 12. 13	+ 13 02	+ IJ .:W	-11 .76
	Oihc.:d,	5 251	-26.-13	-3.09	-2.88	-26.65
	l'rot..:in crop,	2 428	+-1 3.62	-3.3 7	-3. 13	-r-13 28
	Sei asidc	5 538	-33.59	-3-1.-12	-3~.23	-32.84
	. \ n:a und..:r CO I' crops	36 921	-0.38	-1.63	-1.34	-0.76
	Land rclunb 111 the CO P s..:ctor	0.972	-5. 7 1	-15.38	-1 5.53	-5 7 1
	,\ r..:a us..:d in th..: li, ..:s tod, s..:c1or	17 309	+0.78	-r-3.3 1	-'-2.72	+ 1.56
	Land n:lllrns in 1h~ li,. s..:ctor		--1.7 1	-11.5 2	-1 2.37	-3. 71
	( 1) i\ lilli ons ol' 1994 Fn.:nch Francs . ..:,ccpt for land n.:1urns.

E

Table 4 . Ex periment results: Impacts on va lue addcd, cmp loyment. public cxpcnditures and nationa l wclfare (chan ges in percent with respect to the base)

 4 Experiment 2 clearly sho\\S the key role of direct paymcnt modeling as regards ro the assessmen t of the Agenda 2000 CAP reform. Differences bet\\een experiments I and 2 are partic ularly markcd fo r ccrca ls.Market price changes for cerea ls are similar in experi ment 2 re lative to experiment 1. cxcept fo r maize \\hich experi ences a market price decrease equal to the intervention price cul in experiment 2. By contra1. supply and export patterns are very di ffe rent in experi ment 2 relative to experiment 1. Since per hectare direct pa) ments are modeled as output subs idies in experiment 2. the latter resu lts in a production increase for \\ heat ( +6.20 % \\ ith respect 10 the base). barle) ( + 1 ....16 % ) and maize ( + 1 1.62 0 'o) \\hile these three productions decrease in e:,,.periment 1 (respecti,cl) , b) -8.--11 % . -5.92 % and ---1 .--10 % ). ln the samc \\a). French ex ports of \\ heat to the RoW increase in expcriment 2 (+6.21 % )

	Variabk,	Base > car ( 1 )	E.,p 1		br 3	bp. 4
	Value acldcd
	COP li11111ers	49 343	-5. 28	-4.57	-4 48	-5.56
	!)air~ fanm:rs	32 419	+0.54	+0 .01	+0 69	-0.34
	( •a11 k l' armer~	26 779	+7. 16	..-5.68	-6.75	+5.72
	l• mplo:111Clll
	CO I' lilrm,	8 980	-9.67	-8.61	-9 .02	-1 0.09
	!)air: frmn~	7 432	-1 .60	-1.05	-0 .98	-1 67
	(allie litrm,	9 498	-0.15	+4.:W	+ 1.24	+3.08
	\Il fanfü	76 124	-0.36	-1.01	+0 .85	-0. 18
	Public .:,pcnditures
	Dir.:ct ra: mcnts
	COP crop,	20 579	+ 31.22	.,.31.22	+3 1.22	---3 1.22
	13..::cf calllt.:	5 577	+ 124.76	+ 124.76	+ 124.76	+ 124.76
	1 ,port n.:funds
	Ccn:als	4 462	-91.44	-61 .09	-59.97	-92.42
	1301 ine 1ncat	1 944	-100	-1 00	-1 ()()	-1 00
	E1\GGF c,pcncliturcs	53 635	+ 7.96	+ 10.60	... , o .69	-7.68
	Drnnc,1ic 11cllitl<.: gain (2)		+ 7 987	.,.5 599	+5 248	+8 501
	( 11 ,111d 12) :'llillion, of 1994 French 1•ranc,

Experime/11 2: The key rote olclirect payment modeling

  1. For cxample. experimcnt 2 leads to a production increase by+2.31 % for beercau le (+1.06 % in cxperime111 1) and by + 1.54 % for bovi ne meat (+0.43 % in Table3. one notes that experiments I and 2 ha ve generally the same impact on land allocation patterns. but effects are agai n diffcrent in magnitude. Under both cxperiments. the area under cerea ls increases, the area under o ilseeds decreases, by a much lower percentage in experiment 2(-3.09 %) relative to experiment 1 (-26.--13 %), and the area used in the li vestock sector inc reases. by a higher percentage in experiment 2(+3.3 1 % ) relative 10 experiment 1 (+0.78 % ). Land retu rn dccreases are IO\\ er in experiment I relative to experiment 2 becausc direct payments are considered as land subsidies in the first case and as output subsidies in the second case. Experiment I and 2 lead to similar value added decreases in the COP sector and to similar va lue aclded incrcac;es in the beef cattle sector. EAGG F expenditures are higher in experiment 2 relati,e to experiment I main ly becau e sa\ ings on export subsidies granted to cerea ls arc lo\,er in experiment 2 (-61.09 % \\ ith respect to the base) than in experiment 1 (-91.44 % \\ith respect to the base). The national \\elfare gain is lower in experiment 2 (+ 5 599 million French Francs) relative to experiment 1(+7 98 7 million French Fra ncs).

	From

e:,,.perimcnt 1). Corresponcling market prices decreasc by-17.41 % and -14.53 % in expcriment 2

(- 15.08 % and -12. 79

% in expcriment 1 ).

Table 5 . Ex periment results: Impacts on variables related to wheat production (changes in percent with respect to the base)

 5 Fr.:nch franc~. t:.'(ccpt l'or priccs. (2) Prie.: normali/cd 10 0.-157 in the .:~plicit 111odcl ing case and 10 1 in th.: implicit mod.:ling cusc.

	\ 'ariabks	Bas.: ~ car ( 1 )	b.p. 1	b.p. 2
	\\ h<:,ll
	Do111-:,11c produc11011	2522 1	-8.-1 1	+6.20	T6.5-l	-8.84
	.\n.:il	12 635	+6.37	T7,-l8	+7.83	+5.88
	Yio:lds		-1 -1 .78	-1.28	-1 .29	-1-1 .72
		2973	-1 7.69	, , ,	+3.62	-18 .07
		2726	-1 2.2 1	T-1.87	-5. 18	-12.62
			-0.88	+0.39	+0.-10	-0.89
			-1 .73	TÜ.72	-0.75	-1 .76
		0.-1 57 or 1 (2)	-72.-18	-15.38	-1 5.53	-72.-18
	( 1) ;\l illions of 199-1

h:nili ✓cr tbc 1 cnil1/cr marl,.0:1 prn;..: P..:sticid..: 111arl,.c1 prie.: Land pricc l'or\\ h.:at production T.1 .. l.)

The degree of imperiect mobility of a primary input is captured by the elasticity of transformation of a CET function. We assume that th1s parameter equals 0 .5 for labor and 1 1 for land

For a complete description of the modeling of policy instruments used in the EU dairy sector (i e . the quota system. the intervention price mechanism for butter and skimmed milk powder, import tariffs, export subsidies. and output as well as input subsidies). seeGohin and Guyomard (1999). We do not consider the milk sector also because direct payments are sign ificant only ,n the COP and beef sectors. Th is is true today. Th is will remain the case alter full implementat,on of the Agenda 2000 CAP reform.

' Export subsidies are granted in the light of market situations. As a result, the subs1dy can be a tax 1 f world pnces are greater than EU pnces. Following Weyerbrock (1998), we do net allow for agncultural export taxes because we th1nk that the EU 1s net able to defend export taxes over an extended period. ln practice, we will assume that EU market prices cannot be lower than world pnces

& For a review of possible modeling strategies, seeSalvatrci et al. (2000).

' The FAPRI (Food and Agricultural Policy Research lnstitute) mode! is developed at both the

A simple analysis of results of experiments I and 2 c learly sho\\ s that the modeling o ption choice (i.e .. direct payments as input subsidies versus direct payments as output su bs idies) has mainly an impact on the COP scctor, more precisely on COP supply. Thi s conclusion is con firmed by experiments 3 and -l. As far as COP crops are conccrncd. rcsults are almost identical in cxperiment 2 (implicit modeling or di rect payme11ts) and 3 (irnplicit modc li11g of direct pa) ments in the COP sector. but explicit modcli11g in the li,•cstock sector) on the one hand. in e:-..perimen t 1 (expl icit modeli11g of direct pa) ments) and -l (explicit modeli11g o f direct pa) ments in the COP sector. but implicit modeling in the li,estock sector) on the other hand.

Let us considcr the case o f cerea ls in more dctail. Since the area effccts of experiments I and 2 are similar but the production effects are very different. it results that the explanation of differences obse1Ted bet\\ ecn the t\\ o s imu latio11s lies esse111 ial ly in the eff ects of the mode! ing strategy on yields.

The \\heat example can be used to illustrate this point.

Wheat production requires. with other inputs, land. fet1ilizers and pesticide . These three factors of production arc assumed 10 be strongly scparable from other inputs in the" heat production technolog).

Substi tution possibilities between inputs are captured by elasticities or substitution of nested CES produc1io11 fun cti o11s. A lirst CES production function "ith an elastic it) of substitution or 0.2 defines a "land-lertili zcrs" aggregatc. Pesticides are the11 combined "ith this aggregate. us ing a second CES production function "ith an elasticity of ubstitution of 0.1. to lo rm a "la nd-fert ilizcrs-pcsticides" aggregate. The latter is combined with other inputs i11 fïxecl proportio11. Whcn per hectare direct paymcnts are modelccl as land subsidies, the fïrst direct cffect of an increasc in payments is thus to recluce the agent price of land . This induccs a positive O\\ n-price effect on land demand and negative cross-price effects on dcrivcd demands for fertili zers and pesticides. By contrast. "hen per hectare direct payments are mocleled as output subs idies. the fïrst direct effect of an increasc in payments is then 10 generate a positive expansion effect for ail inputs, including land. fertilizers and pesticides.

These effects are illu trated in Table 5. ln cxpcriment 1. ,, here direct payments for cereals arc modeled as land subsidies. the price of land u~ccl ror whcat production decreascs by -72.48 % while market prices o f le rtilizers and pesticides rc111ain a lmo t unchanged (relat ive 10 the ba c). Thcse price changes tran late into a decrease in fertilizer and pesticide use (respectively. -17.69 % and -12.21 % ). and fi11ally into a yicld decrease (-14. 78 %) as the "heat production decreases by -8.41 % and the area under wheat increases by +6.3 7 %. ln cxperiment 2. "here direct payments for cereals are modcled as output subsidies. the land price dccrea:.e is limited to -15.38 %. market priccs o r fertilizers and pesticides remai ning al mo t unchangcd (rclati,e 10 the base). ln rhat case, the negati vc effect or the land price clecreasc (and or the product price decline) on fertili zer and pesticide use is more than offset by the pos itive effect of output