Brian Gardner's Blog

Despite the existence of much information to the contrary, the myth of the poor European farmer persists. In most western countries of the European Union farms run as businesses make a good living – as good if not better than in other sectors of the economy. Real income data, rather than global averages, proves the point. The problem is that public perspectives and therefore policy decisions are based on the ‘poor peasant’ image rather than on specific figures for farm household incomes which reveal a more accurate picture.

The problem is that the global figures at national level and even more at the Community level, are averages across all sizes of landholder. To arrive at annual assessments of average farm incomes,the figures for the ‘one hectare and a cow’ holding are worked in with figures from large-scale agribusinesses operating thousands of hectares. Unsurprisingly, this leads to a complete distortion of the assessment of income to be gained from farming as a business compared with other type of business.

It is difficult to believe that after fifty two years of the operation of the highly manipulative and increasingly expensive common agricultural policy that no comprehensive system of income assessment has been established. Of course, the European Commission will argue that the Farm Accounting Data Network (FADN established in the 1960s performs this function. But this is a classic example of the ‘junk in, junk out’ maxim. The information which national governments, and most importantly, their own farmers, choose to supply, or not to supply, will massively distort the picture.

As a consequence, the data is less or more accurate and representative in some member states than others, depending on the form and quality of the data supplied. Some categories of part-time farmers are not included. In some member states large farmers refuse to cooperate and are simply not represented – thus further distorting the figures towards the poverty stricken farmer picture.

These shortcomings of the EU’s methods of assessment of rural incomes were identified by the EU Court of Auditors in 2002. The Court recommended that a uniform and more detailed accounting system should be adopted. Although this recommendation was later endorsed by the Council of Ministers, it has never effectively been taken up by the Commission

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Comments

  1. You are quite right that the law of averages is a blunt instrument, like any other law. We lack an equitable yardstick by which to measure the value of diversity that industrial economies so cheerfully destroy.
    Most businesses spread their risk in some way, to protect revenue streams: why should agriculture be any different? Concentrating increasingly homogenised production into fewer units raises the risks of catastrophic failure as well as increasing the probability of this happening. Or is the law of probability another blunt instrument?

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