Irish scientists have won the contract to devise a computerised projection model - a sort of crystal ball - to project the development of the EU's agri-food industry over a 10-year period.

Negotiations on the cost of the project are still taking place, but it is expected to be worth in excess of £2 million (€2.54 million) over the three years it will take to complete.

Economists from Teagasc, the agriculture and food development authority, and a number of the universities, who are members of the FAPRI-Ireland partnership, a policy analysis group formed with the University of Missouri in the US, already have developed a model for the Irish agri-food sector which has been used very successfully in recent EU negotiations.

"This is one of the biggest professional challenges we have had. It's a breakthrough in terms of modelling, especially as it involves the 14 EU countries," Mr Brendan Riordan of Teagasc, the co-ordinator of the project, said. "We're going to link up with similar teams in every one of the EU countries to estimate, along with them, the likely impact on the EU of further policy developments, such as the changes which might occur under the World Trade Organisation negotiations," he said.

"Also we're looking at the reviews of the various commodity policies in the EU. Exchange rates have been looked at recently. We're also looking at the Kyoto impacts on global warming and we hope it can be expanded to include the central European countries which will be acceding to EU membership," said Mr Riordan.

Work on the EU econometric modelling for projections and analysis of EU policies on agriculture, forestry and the environment is expected to be completed by the end of 2003. Issues such as the limitations on EU-subsidised exports under the WTO agreement on agriculture and the further reform of the Common Agricultural Policy, especially the decoupling of payments and measures to respond to environmental concerns such as greenhouse gases, are among the items which will be included.

It will then be fully operational, covering the impact of developments over the following 10 years. "We are working on the impacts of policy change into the second decade of the 21st century," Mr Riordan says. "We will have dynamic projections that give results year by year for up to 10 years."

The Irish crystal ball was used for the first time in May of last year to analyse the impact of the Agenda 2000 agreement on the reform of the CAP. For example, it was able to project that under the terms of the agreement, farm incomes in 2007 would be at the same level as in 1998, compared with a 20 per cent drop which would have resulted from the original proposals for reform and the 10 per cent drop which would have occurred if previous policies remained unchanged. The contribution made by the model to the Government's success in the negotiations was acknowledged by the Minister for Agriculture and Food, Mr Walsh.

The work is being overseen by a steering committee chaired jointly by Dr Gerard Boyle of NUI Maynooth and Prof Seamus Sheehy of UCD, and includes a number of agri-industry figures, such as the editor of the Farmer's Journal, Mr Matt Dempsey.

From the universities, Prof Alan Matthews of Trinity College, Dublin will examine the knock-on effects on the rest of the economy of developments in the agri-food sector. Other academics who are involved include Dr Michael Keane of University College, Cork and Dr Maurice Roche of NUI Maynooth. They will also work closely with Prof John Davis of Queen's University, Belfast.

The Irish unit is dealing with agricultural economists in similar institutions in other countries. "They are the really serious people in this business and they are great partners. We have a fine working relationship and they have been very helpful in putting this together," said Mr Riordan.

Dr Liam Downey, director of Teagasc, said that the original model was developed in the Food and Agricultural Policy Research Institute (FAPRI) of the University of Missouri by Prof Bob Young, who came to Ireland for 18 months to help develop a similar model here.

Four Irish economists were recruited to work with him and they will form the nucleus of the seven-strong team in Dublin.