STREMMiAA: A Farm-Level Simulation Model for Assessing Structural Change, Land-Use, and Environmental Dynamics

Small farms play a vital role in the rural sector of the European Union, contributing to food production, preserving landscape features, protecting biodiversity, providing public goods, and maintaining social cohesion in rural and remote regions. Nevertheless, the sector has undergone rapid structural transformation in recent decades, accompanied by adverse demographic developments that threaten the long-term sustainability of small-scale agriculture. Understanding how farms respond to evolving economic conditions and policy frameworks is therefore essential for designing effective agricultural policies. This study presents the Stochastic Recursive Model for Multiannual impact Assessment in Agriculture (STREMMiAA). This newly developed simulation model endogenously captures structural, and land-use change dynamics in arable farming systems. The model integrates a farm-level recursive linear programming framework with an ARIMA stochastic process, allowing the dynamic representation of farmers’ adaptive behavior under uncertainty. A post-solution module incorporating means-based environmental indicators enables assessment of environmental performance at the farm level. The model is empirically applied to a representative sample of arable farms in Karditsa (NUTS-3 region), Greece, under three alternative scenarios: (i) Business-as-Usual (BAU), (ii) Common Agricultural Policy (CAP) post-2020, and (iii) CAP post-2020 combined with a scenario of Long War of Attrition (LWA). Simulation results reveal a consistent decline in the share of small farms (<30 ha) and a corresponding concentration of land in larger farms (≥50 ha), indicating limited long-term viability for smaller farms. Land-use projections show an expansion of food crop areas and a decline in industrial crops areas. Environmentally, reductions in water, fertilizer and pesticide use under new CAP-related scenarios (ii and iii) suggest potential benefits for nitrate-polluted areas such as Karditsa.