The core objective of this project is the development of a Pan-European operational tool for regional and spatial policy impact analysis of the CAP with regard to Rural Development Indicators. The tool will be developed by extending and improving the regionalised partial equilibrium model for agriculture, CAPRI (Common Agricultural Policy Regionalised Impact model).

Extension and improvement will relate to four aspects:

• Firstly, the expansion of CAPRI to all Candidate and Possible Candidate Countries; a review of certain aspects of the model as price transmission inside the expanding EU; implementation of the latest CAP Pillar I reform steps, including decoupled payments, reformed market interventions and systematic quality management for its databases, projection and scenario results.

• Secondly, a layer of regional Computable General Equilibrium Models (CGEs) based on the RegFIN (Regional Finnish CGE model) for all NUTS 2 regions of the EU will be developed and linked transparently to CAPRI in order to allow and improve analysis of Rural Development (RD) measures that target primary factors and non-agricultural activities, and capture backward and forward linkages of agricultural activities.

• Thirdly, existing databases on Pillar II (RD) measures will be integrated in a systematic manner, and interfaces to CAPRI and CGEs will be developed to allow impact assessment.

• Fourthly, based on Common Monitoring and Evaluation Framework (CMEF - Commission Regulation No 1974/2006 Annex VIII), indicator factsheets and calculators will be developed and operationally integrated into the tool to allow for forward looking impact assessment of CAP Pillars I and II, agro-food trade policies and other policies targeting agriculture and rural regions. The various components will be integrated in a common IT framework, including a Graphical User Interface (GUI) that will allow the definition of scenarios, model runs and result exploitation. The tools will thus allow analysis in one consistent framework building on micro-economic theory impacts of CAP Pillars I and II, of changes in markets or border protection for a wide range of economic, social and environmental indicators.