Like all industries, agriculture is subject to economies of scale. But larger farms have a smaller workforce and can be a bigger burden on the environment if they employ industrial methods, compared to the low-input systems that have traditionally dominated rural landscapes. It is time to shift policies towards preserving jobs and communities, being kinder on the environment, and encouraging young people to take up the farming profession.
The face of Europe’s farming and its countryside has changed a lot since the Common Agricultural Policy was created. Today, fewer, bigger farms feed the continent’s citizens. Between 2003 and 2013, one-third of all farms in the European Union closed down. This trend affected Europe as a whole: half of the EU’s member countries lost between one-third (Belgium, Czech Republic, Germany, Italy, Poland, the UK, etc.) and two-thirds (Bulgaria, Slovakia) of their farms.
All over Europe, farms are increasing in size, particularly in the East. On average, the largest farms are in the Czech Republic (130 ha, up from 80 ha ten years earlier) and northern Europe, while the smaller ones are in southern and eastern Europe. Livestock raising has seen a similar trend. In 2013, three-quarters of the animals in the EU-28 were reared on very large farms, while the total number of animals reared on small farms has more than halved since 2005. More than three-quarters of all “livestock units” (counting five pigs or ten sheep as the equivalent of one cow) were reared on very large farms in half of the EU member states, with this share peaking at over ninety percent in Benelux and Denmark. In Romania, on the contrary, more than one-third of all animals were reared on small farms.
Overall, farms have become more specialized in growing one crop or rearing one type of animal. European agriculture is increasingly polarized: small, family enterprises represent the majority in terms of numbers and workforce, but they are declining fast. Meanwhile, large and very large farms are increasing in number and economic importance. Farms over 100 hectares account for only three percent of the EU’s farms, but their numbers have risen by sixteen percent from 2005 to 2013 and they now use fifty-two percent of all agricultural land. Large farms often go hand-in-hand with the loss of jobs, a decline in diversity of farming systems, a rise in intensive practices – and environmental depletion.
At the other end, small enterprises with less than 10 ha represent eighty percent of Europe’s farms. They are more diverse than bigger holdings, yet they occupy only ten percent of the available land. Their numbers are falling fast: ninety-six percent of the farms lost between 2003 and 2013 had less than 10 hectares. Economic difficulties are common: low food prices do not adequately cover production costs, and most of the profit is captured by the processing and marketing industries rather than by producers. Small and medium farms, as well as certain sectors such as dairy-farming, are particularly exposed; they are at risk of bankruptcy and closure.
The subsidies and market rules of the Common Agricultural Policy, as well as the liberalization of agricultural markets are among the factors causing these trends. In the past, product and sector-specific payments have encouraged farms to specialize. The per-hectare payment which went into effect in 2003, means that the more land a farmer has, the larger the payment the farmer receives. If payments make up a significant part of a farmer’s income, this creates an incentive to acquire more land and a bigger payment. Established farmers who already have land and receive payments have more capital and can go into debt. New farmers looking for land to get started lack these advantages. Direct payments enable many people to continue farming despite worsening economic conditions. But all too often, untargeted per-hectare payments have fueled an increase in farm sizes and land concentration, while hindering the entry of a new generation of farmers. Although there has been an attempt since the 2013 reform of the Common Agricultural Policy to redistribute payments towards smaller enterprises, this has not stopped the trend of farms disappearing.
This also concerns support for young farmers. Some 190,000 young farmers received support between 2007 and 2013 – compared to an estimated 3.5 million farmers aged sixty-five or above who will retire within 5–10 years. Most of these prospective pensioners manage small or medium-sized family farms, and most lack a successor. The current Common Agricultural Policy dedicates about two percent of its budget to supporting young farmers, but this money is insufficiently targeted at the needs of young and new farmers and is poorly articulated with national policies.
Despite this, an increasing number of people want to enter farming, with or without policy support. Some benefit from innovative schemes: farm incubators, land acquisition through community land trusts, farmer cooperatives, etc. Many new farmers turn to innovations such as organic farming, short food supply chains, community-supported agriculture and on-farm food processing, which increase the added value on farm, and contribute to locally grown food, jobs and environment protection. Well-targeted mechanisms at the EU, national and regional levels in favour of this new generation of farmers and ecological production would promote generational renewal, maintain a dense network of farms throughout Europe, create jobs, and foster the agroecological transition of farming systems.