Agriculture Reference
In-Depth Information
dynamics of business adjustment result in individual businesses expanding through very
different forms of tenure (Lobley
et al.
, 2002). In many countries, there is a legacy of
common property, from the
baldios
of Portugal to the extensive commons of northern
Scandinavia. Commons are found in the drylands and forests of the Mediterranean, Alpine
pastures, and extensive grasslands in north-west Europe. New arrangements for shared land
ownership or land management have also been emerging in recent years. For example, in
Scotland, collective ownership opportunities have been created through new legislation and
some communities now manage land collectively in a number of areas of north-west
Scotland. However, any exploration of transition in European farming must recognize the
prevailing context of family businesses and their decision-making practices.
Because farmers seldom retire and farming is dominated by family businesses, the
farm sector has an ageing workforce. This is often deemed to be a problem because of the
lack of new and young blood coming into the sector. Part of the explanation for this lies in
the nature of the family business and the reluctance of farmers to retire, and in high land
costs which prevent young people from breaking into the industry. Designing policy
interventions to support new entrants, when the main cause of the lack of succession is the
nature of family farms and high land prices, is politically popular but deeply problematic.
Paradoxically, it is periods of recession in the farm sector, when land prices are cheaper and
other land-based businesses fail thereby increasing the supply of land, which have probably
been instrumental in attracting new blood into the industry, as it is then that the enthusiastic
and motivated can gain access to farmland most cheaply.
Although there is a Common Agricultural Policy, farm incomes do not follow
consistent trends across the EU, though a broad pattern is discernible. Eurostat data show
that the top six performing countries in incomes per annual work unit in 2012 were all in
new member states, from Romania in the south to Estonia in the north. Italy, Greece, Spain
and Portugal were amongst the worst performing countries with real incomes from farming
significantly below the European average. Ireland and Luxembourg were northern outliers
with very low figures and the UK performed relatively well for north-west Europe. Given
the significance of the Single Farm Payment, it seems likely that differences outside of the
Euro-zone are a function of currency fluctuations. However, there would also appear to be
other factors at work in shaping real incomes.
It is evident that there are major divergences in performance over a longer period of
time and that the snapshot of figures in 2012 is reinforced by trends which show
Mediterranean areas and Ireland performing rather badly, and most of the central and
eastern European countries doing rather well, with only Slovenia amongst the post -socialist
states not showing at least a 50% gain in farming income between 2007 and 2012. The
principal lesson we can draw is that there do appear to be structural factors at work,
although it is not clear what they are; and there are very significant differences between
countries. These may have as much to do with national economies and macro-economic
factors as with factors within the farm sector. Policy change is also important. Incomes
seem not to be driven by structural factors such as farm size or the quality of fixed capital,
except inversely, as relatively poor countries have done better in recent years. Of course,
indices can suggest good performance when countries start from a low baseline and this
may be the case for central and eastern European countries.
However, it has long been argued that rather than looking at farm incomes we should
look at the total income of farm households. It is this bundle of income that determines
household wellbeing, and the greater the extent of off-farm earning, the greater the total
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