Changes in agricultural employment

Pierre Antoine BARTHELEMY (Eurostat)

There is a higher level of employment in agricultural production in southern than in northern Europe. Employment in agriculture is falling overall, although more slowly since the reform of the Common Agricultural Policy (CAP) of 1992, while the jobs situation in the agri-food sector is stable. Nevertheless, employment in both sectors is diminishing as a proportion of total employment. Farming is tending to become less important as a source of employment in rural areas even though it still plays a vital role in preserving rural landscapes. On the whole, agricultural employment accounts for a higher proportion of total employment than the proportion of GDP accounted for by agricultural GVA. This can be interpreted as meaning that structural adjustment is required, but it also reflects the importance of family labour and part-time work in farming. The falling number of farms and their increase in size does not necessarily go hand in hand with an increase in the number of paid workers.

A fall in agricultural employment and north-south differences

In 1997, there were approximately 7.4 million people working in the agricultural sector in the EU (agriculture, hunting, forestry and fishing), of which 7.2 million were employed in agriculture proper (excluding fishing). On average, agriculture accounted for 5% of EU jobs in 1997, rising to over 10% in Greece, Portugal and Ireland, the three countries with full Objective 1 coverage.¹

The breakdown of agricultural employment across the EU must also be considered in terms of production types. In countries where the more labour-intensive Mediterranean-type production predominates (Italy, Spain, Greece and Portugal), farming accounts for 9% of jobs on average. Arable farming and animal husbandry, which are more common in the countries of northern Europe, require less labour (agriculture accounts for an average of 3% of employment in DK, NL, FIN, S and the UK) (Figure 1).

The number of jobs in the agricultural sector is falling steadily. This is a major and continuing trend, linked to global economic developments and observable in all technologically advanced countries.² The increase in the figures for 1986 was due to the accession of Spain and Portugal and the increase in 1995 to the accession of Austria, Finland and Sweden. The fall in agricultural employment is affecting all Member States but in particular the countries with the highest levels of jobs in farming (Italy, Spain, Portugal and France). Each of these four countries lost more than one-third of its farming jobs between 1987 and 1997 (as opposed to one-quarter for the Community as a whole). Denmark also appears to have suffered heavy job losses but this is not actually the case. In reality these apparent losses have been due to the development of parallel structures, with employment in these structures being classified outside the agricultural sector. Belgium, on the other hand, shed only 5% of its agricultural jobs over the ten years in question (Figure 2).

From the year 1992 the downward trend has slowed: Following the CAP reform the rate of disappearance of farms has noticeably reduced (Figure 3). From – 5.2% in 1991 it has steadily shifted to be –1.6% in 1998 at the Community level.

There are differences between northern and southern Europe in terms of the age distribution of heads of holdings. The proportion of elderly farmers is generally higher in the Mediterranean countries, with nearly one in two farmers over 55 years of age as opposed to only 1% in Germany. Just 4% of Portuguese farmers and 6% of Italian farmers are under 35 (the Community average is 10% under 35). 

In relative terms, employment in the agri-food sector is highest in Denmark and Ireland

In 1997, there were 3.5 million workers in the food and tobacco industries in the fifteen EU countries. In absolute terms, Germany, France and the United Kingdom topped the list with almost 60% of the EU's agri-food jobs. While Italy and Spain had the highest number of jobs in agriculture, they came in behind the others in terms of agri-food jobs. These five countries together account for almost four out of every five jobs in the European agri-food sector. 

The agri-food sector accounted for approximately 8% of EU industrial employment and 2% of total employment in 1997. In relative terms, Ireland and Denmark were the biggest employers, with the agri-food sector accounting for more than 3% of all jobs. The proportion was much lower than 2% in Luxembourg, Sweden and Italy (Figure 4).

The trends in employment in the agri-food sector vary greatly. Between 1987 and 1997, employment levels increased in some countries. This was the case in France, and also in Greece, the Netherlands and Portugal (even though the numbers remained low there). On average, the number of jobs remained static or even diminished slightly. The drop was more marked in Luxembourg, Denmark and the United Kingdom. In general there is a strong correlation between the fall in the number of agri-food jobs as a proportion of total employment and the drop in employment in the industrial sector overall, which is linked to productivity gains achieved over the decade (Figure 2).

During the 1980s, company mergers and takeovers radically transformed the structure of the agri-food sector, with multinationals accounting for a growing share of the market. However, in numerous market segments, the degree of concentration is still limited, given the wide diversity of European agri-food products and the existence of regional patterns of consumption. A large number of SMEs therefore contribute to employment in the sector.

Structural weakness in the agricultural sector

A joint analysis of the levels of agricultural and agri-food employment highlights the special situation in Ireland, Greece and Portugal, where agriculture plays a dominant role in terms of processing and marketing jobs. This is also true to a lesser extent in Spain, Austria, Finland and Italy.

Changes in the number of agricultural jobs do not correlate with changes in the number of agri-food jobs. The countries where agricultural employment has fallen sharply are different from the ones where agri-food employment has fallen. Denmark is the exception, however; for reasons already mentioned, it has experienced a fall in the number of jobs in both sectors.

Employment in agriculture is generally higher than agricultural GVA in the Member States in percentage terms, with the exception of Denmark (where it is lower), and the Netherlands and the United Kingdom (where it is almost the same). The gap between the two variables is particularly wide in the case of Portugal (where agriculture accounts for 13% of jobs and 4% of GDP) and Ireland (11% of jobs and 5% of GDP).

This comparison highlights both the possible need for structural adjustment in the agricultural sector in certain regions and the importance of farming jobs in some rural areas. This view is supported by other variables related to the structure of holdings, such as the average SGM per AWU and the proportion of the total agricultural labour force working on small holdings (holdings of less than 8 ESUs). Thus, Portugal has the lowest average SGM per AWU (4 ESUs compared to the Community average of 20 ESUs) and the highest proportion of its agricultural labour force working on small farms (74% compared to the Community average of 38%) (Figure 5 and Table 1).

Two agricultural jobs and one agri-food job per hundred inhabitants

There were on average twice as many jobs in agriculture as in the agri-food sector in the EU in 1997. The ratio has been falling since 1983, and there are major variations across the Member States. At opposite ends of the spectrum are the United Kingdom (with a ratio of 1:1) and Greece (with a ratio of 7:1) (Figure 6 and Figure 7).

There were on average two agricultural jobs and one agri-food job per hundred EU inhabitants in 1997. The number of farmers per hundred inhabitants has tended to fall while the number of agri-food jobs per hundred inhabitants has remained static. Portugal lost four jobs per hundred inhabitants in the two sectors combined between 1987 and 1997, while Greece and Spain lost two (Table 2).

Family labour is the keystone of agriculture

Family labour predominates in agriculture, accounting for four out of every five jobs in 1995. The number of non-family workers is highest in the United Kingdom and Denmark. Elsewhere, farming is still a family affair. In Finland, for example, family members account for over 97% of the agricultural work force.

The fall in the number of farms and their increase in size has not necessarily led to a corresponding increase in the number of paid workers. These changes have affected the Member States in different ways. In countries such as Denmark and Greece, there has been a large increase in the number of paid workers and the same is true to a lesser extent in Belgium, Spain, the Netherlands and Luxembourg. These changes are linked to gains in competitiveness and productivity, which are achieved by:

• increasing production capacity;
• rationalising existing farm structures;
• developing labour-intensive agriculture with higher value-added, such as fruit and vegetable growing and, more generally, Mediterranean-type production;
• developing alternative activities.

There has been a fall in both the number of farms and the number of paid workers in Germany, Portugal, Italy, and, to a lesser extent, Ireland and France.

Throughout the EU, the reduction in the number of farms has entailed lay-offs of paid workers, as in every other sector of the economy. This is not the only impact of this reduction, however. Family workers too are swelling the ranks of the unemployed (Figure 8).

Women make up one-third of the total agricultural labour force in the EU. The proportion of female farm workers is particularly high in Portugal and Austria (52% and 49% respectively).

Farmers are becoming better educated. More than one farmer in ten has a higher education qualification in Germany, the United Kingdom and Ireland (17%, 11% and 10% respectively), while the Community average is 6%. The OECD uses the educational level of farmers as an indicator in its work on agri-environmental indicators, on the basis that it is generally agreed that the higher their level of education, the more concerned farmers are with environmental issues.

Part-time work predominates in southern Europe

Part-time work is much more widespread in the countries of southern than northern Europe. In Greece, Portugal, Italy and Spain, nearly half of all farmers (compared to less than 30 % in the other eleven Member States) and more than half of all agricultural labourers work part-time. In Italy and Greece, more than one in three farmers spend less than half of their working time on the farm. The large number of seasonal activities in southern Europe is one explanation for this high level of part-time work. 

Part-time work may mean that full-time work is impossible or that the farmer is involved in other non-agricultural gainful activity. Such activity is common in Ireland and Germany, with more than one farmer in four engaged in a non-agricultural gainful activity, but not so in Luxembourg or Belgium. The non-agricultural activity is the main job everywhere except in France, which implies that the farming is done on the side, possibly as a hobby. 

A joint analysis of the proportion of part-time jobs and the proportion of farmers engaged in a non-agricultural gainful activity highlights the special situation in the southern European countries. While there is a high level of part-time employment, very few farmers are engaged in a non-agricultural gainful activity. There would appear to be underemployment, perhaps due to structural weaknesses in the agricultural sectors in these countries (Figure 9).

Agriculture remains a driving force for economic and social cohesion

Overall, agricultural employment is clearly falling in Europe. This does not mean, however, that agriculture is doomed to play a secondary role in the process of economic and social cohesion in certain regions, and particularly rural regions. Even as a minority in the countryside, farmers are still the main managers of the land and agricultural work largely determines the degree of attractiveness of these regions, particularly where the landscape is concerned.

The EU has long been aware of this basic role of farming and has encouraged certain diversification measures. Two Regulations in particular have been instrumental. Council Regulation (EEC) No 2078/92³ of 30 June 1992 concerns agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside. Some of its objectives are covered by an aid scheme to promote:

• the upkeep of abandoned farmland and woodlands where this is necessary for environmental reasons or because of natural hazards and fire risks, and thereby to avert the dangers associated with the depopulation of agricultural areas; 
• long-term set-aside of agricultural land for reasons connected with the environment;
• land management for public access and leisure activities. 

Similary, Council Regulation (EEC) No 2080/92⁴ of 30 June 1992 instituting a Community aid scheme for forestry measures in agriculture is intended to promote afforestation as an alternative use of agricultural land and the development of forestry activities on farms. 

A significant number of diversification activities have been developed in recent years. In a given area these activities are a new factor in the social integration of economically-active persons. Four fields appear to be of particular importance in terms of job creation:

• preservation of the landscape, protection of areas of great natural value and habitats such as wetlands, rivers and protected areas;
• sustainable management of forests to preserve biodiversity and fulfill other functions (e.g. of a recreational nature);
• the development and use of plants for non-food purposes, e.g. in industry or energy production;
• organic farming.

Other areas with job-creating potential, particularly in rural regions, are green tourism, the management of heritage resources, the supply of services to the community, etc. To exploit these opportunities, farmers need to mobilise regional and local authorities, businesses, NGOs and funding bodies. Their involvement in environmental management can promote job-creation and generate supplementary or alternative sources of income. In order to meet these new challenges, the farming sector has already begun to adapt in some regions, in particular through the emergence of new forms of employment (partnerships, employers' groups, etc.). It is impossible at the present time to quantify these activities precisely.

The political challenge that Agenda 2000 tries to meet in its part on agriculture and particularly rural development, is to weaken or even break the link between leaving agriculture and leaving country. The new rules give much more freedom to national or responsible authorities to mount programmes tailored to the local situation. At the express request of the Council of Ministers the application of the new rules has been enlarged to cover "diversification of activities in or close to agriculture" and "basic services required by the rural economy and rural population".

Environmentally friendly farming methods generate employment

It is difficult to quantify the impact of more environmentally-friendly agricultural production on employment, but a fairly clear picture is provided by organic farming, the most highly developed and structured branch of sustainable farming. While no exact figures are available, it can be said that, in order to meet consumer demand, this branch of agriculture must be clearly organised to:

• ensure the credibility of this type of production, and
• open up consumption channels in order to move from being a niche market to capturing a substantial market share.

In order to meet these requirements, a number of structures are needed. To monitor compliance with the rules on organic production, certification bodies – which provide jobs- have been set up in the Member States. Organic farming also requires technical and economic know-how for which specialist technicians are needed. Their technical advice is a key factor in helping farmers to decide whether to move from traditional farming to organic farming (Box 1). With regard to consumption channels, organising the collection of produce also generates new jobs. In France, for example, specialised cooperatives organise some of the collection of organic cereals at regional level. Furthermore, the move by major food retailers into the market for organic produce has forced organic farmers to restructure in order to ensure regular supplies of produce in sufficient quantities. In Austria, a group of organic producers called Ernte enters into contracts directly with major food retailers via a firm called Ökoland. Although the downside of this is that producers lose their independence to some extent, this mode of organisation boosts organic farming and creates employment, because supermarkets increase the market share by selling organic produce to a new category of consumers.

In Great Britain agri-environmental measures are leading to a small increase in agricultural work and a substantial increase in work by firms. The activities of hedging, maintenance of terraces and repairing stone wall involve intensive work needing extra labour. Similarly in the Netherlands livestock farmers who have signed management contracts need additional labour. In Denmark converting farmers to organic farming leads to increasing labour cost: these rise significantly (38%) when setting up organic farms. This result can be taken as a positive employment effect. Finally, although job creation is not the objective of agri-environmental programme, nonetheless results confirm that improved environmental management of the land requires additional labour. Developing the concept of environmental services provided by farmers affords new job opportunities.

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