January 11, 2013
Agricultural policy makers in the European Union tend to devote a lot of energy to worrying about the aging of the agricultural population. While this trend undoubtedly has important implications for the social structure and economic health of Europe’s remoter areas, in the longer term it may not be the problem as currently conceived.
There is certainly little doubt that the average age of the occupiers of Europe’s farms is rising. This is borne out by a recent report from the European Commission. For each farm holder younger than 35 years, there were 9 farmers older than 55 years in 2007. This situation is slightly more pronounced in the EU-15 than in the twelve newest member states. The Commission points out that while Poland has an average of 0.35 young farmers for each elderly farmer, Portugal has the oldest farming population with only 0.03 young farmers for each elderly farmer. On average, young farmers make up only 6% of all farm holders , with the highest share in Poland (12.3%), followed by the Czech Republic (9.8%), Austria (9.7%) and Finland (9.1%). For the Community as a whole, farmers over the age of 55 account for 55% of farm holders in the EU-27. Numbers are highest in Portugal (73.4%), Bulgaria (70.3%) and Romania (67.5%), as well as in parts of Italy, Spain and the United Kingdom.
But what is probably important is that these figures do not necessarily reveal the true picture of modernisation of agriculture in the EU. Most significantly, they do not reveal the importance of the middle aged, experienced and, most important, highly technically trained farmers and managers who operate the larger and most up to date farms. These people are rapidly replacing the less well educated elderly farm operators. Their farms are also absorbing the land freed by retiring small farmers and usually rendering it more productive.
An important part of this process is the decline in the number of small farms in whose name the lavish spending of the CAP is maintained. The number of such farms has fallen by almost a half in the last twenty years. At the beginning of the 1990s there were 4.4 million farms with annual incomes of less than €4,800 – corresponding to 59% of all farms – in the then European Community (EU15) and 460,060 farms, only 6% of all farms, earning more than €48,000 each year. By 2007 the number of farms earning less than €4,800 had fallen to 2.4 million farms – 45% of the total – and the number of farms with an annual income greater than €48,000 had risen to 767 080 farms, 14% of the total. Significantly, the number of the largest farms with income of more than €120,000 a year had increased from less than 100 000 in 1990 to 283 860 in 2007. These farms cultivate over half the EU’s farmed area. In addition these two elite groups, while representing only, respectively, 1.4% and 5.3% of all farm businesses, produce 80% of EU farm output.
Clearly, there is now a two-tier rural structure. The current agriculture policy is redundant in this situation and needs complete redesign into a more relevant rural structure rather than farm support policy. <11/01/2013>