Stochastic modeling in production of oilseed crops in Bulgaria in the context of Green Deal

Bozhidar Ivanov

Abstract: This study is designated to elaborate and propose a model for estimation of outcomes and effects at the level of production of oilseed crops in Bulgaria. The projections are manifested through scenarios based on the stochastic error, which is yielded as a difference between real and modelling results on the projected variables. It is deemed to provide a good basis for modelling of scenarios driven by specific parameters from the Green Deal of EU. The applied stochastic model gives a very good basis to elaborate and simulate further sensitive scenarios generated by the factors and variables of the Green Deal. It is thought to carried out through incorporation of the variables covering the world price of oilseeds and the use of nitrogen mineral fertilizers. The applied and evolved model for projecting the development and future outlook of the production of oilseed crops in Bulgaria provides a system of model equations, which is created as a interdependencies between different variables. This model is considered to achieve and reveal specific quantitative results, facilitating the scenario comparisons.
The presented model results are made as an estimation of the stochastic error, standing for the difference between the model over the real historical data in the period of 15 years, between 2007 – 2021. It is assumed that production and market risks in the oilseeds sector will increase crucially if the full-scale implementation of the intended restrictions and bans connected to Green Deal measures are adopted. Those restrictions are seen in purported reduction in the use of plant protection chemicals and fertilizers application. Production risks are mainly highlighted in the cut of production yield, market volatility of the oilseed commodity and the affected efficiency due to cost increment. Market risks will mainly be related to securing a market stability and appropriate cost level of the production. The results from the model show that up to the time of this study work covering the historical real data up to 2021, specific signals and turbulences in the production, supply and market performance of the sector are not yet noticed and the supposed stagnation effects from the Green Deal measures are not displayed. Therefore, putting aside the expected strong impact of the Green Deal on the sector by 2030, the production and consumption of oilseeds is projected to remain strong and to gravitate in the high levels achieved in the best years reached recently, indicating that the sector is on the upward trend and the constraints and bans of the Green Deal may have a greater affect eventually in future.

Keywords: elasticity; Green Deal; model; oilseed crops; stochastic analysis; variable

Citation: Ivanov, B. (2024). Stochastic modeling in production of oilseed crops in Bulgaria in the context of Green Deal. Bulgarian Journal of Agricultural Economics and Management, 69(3), 3-14 (BG).

DOI: https://doi.org/10.61308/LLFY5397

Date published: 2024-09-30