Simulation of mountain cattle farming system changes under diverse agricultural policies and off-farm labour scenarios

European mountain farming systems have changed considerably in recent years. These changes are due to factors related to the following: internal characteristics of the farm and household; local and regional conditions; and economic and political environment that determine the general market situation and subsidies that the farmers receive. The decoupling of subsidies decided in 2003 CAP reform was an unprecedented change that raised many questions about the response of mountain livestock farming systems. The objective of this paper was to analyse the possible adaptation strategies of mountain cattle farms in various scenarios as a result of changes in policies and markets. The study is based on a previous evaluation of cattle farms diversity carried out in three valleys of the Spanish Pyrenees. Six types of farms characterised according to their past observed evolution trajectory (1990 to 2004) (García-Martínez et al., 2009) were the basis to define mixed linear programming (LP) models that represented the annual operation of the farms. Five socioeconomic and policy scenarios were simulated depending on CAP conditions (partial or total decoupling), orientation of production (weaned or fattened calves) and existence of an off-farm work market (tourism activity). Sensitivity analyses for the price of feedstuff cereals, meat and weaned calves were completed. Off-farm work was economically profitable in the majority of the cattle farms under the current situation of partial decoupling, which may lead to a further decrease in the livestock farming activity and changes in land use (less proportion of mowing semi-natural grassland). Calf fattening was a viable activity, but it was extremely sensitive to changes in the prices of inputs and outputs. Therefore, a raise in the price of cereals or a declining price of meat may lead to a drastic decrease in calf fattening. Ensuring the provision of environmental services by mountain agriculture will not only depend on the specific circumstances in which conditionality is applied but also on the amount and delivery conditions of agri-environmental subsidies. In areas where tourism is on the rise, it is likely that the presence of non-agricultural activities on the farms will continue to increase, and, consequently, so will the displacement of the livestock activity with subsequent changes in land use. Furthermore, this trend will be accentuated in times of total decoupling.