Changing role of farming
The total agricultural production in the EU remains more or less intact in all
scenarios. The importance of farming for the total economy is already small
in the EU15 (old member states). In the EU12 (new member states) the significance
for the economy will decline rapidly over time for all scenarios towards the
level of the EU15, leading to a significant decrease in agricultural employment.
Farming remains above all important for the use and management of the land and
the environment.
Agricultural abandonment depends on liberalization and bio-energy
In all scenarios but the Continental Market scenario the EU27 faces significant
land abandonment by agriculture. Especially the liberalization scenarios Global
Economy and Global Cooperation show large scale abandonment (10-12% of total
agricultural area until 2030) .This is a continuation of trends in the past.
Especially the marginal areas in the EU15 will be affected. Although policies
do not turn the historic trend completely, more support of the CAP and stimulation
of bio-energy crops will reduce the amount of abandoned land by more then 50%.
EU12 catches up, but remains behind
Structural changes in the EU12 are larger than in the old member states. Because
of that the EU12 catches up with the EU15, although it remains behind for farm
income and GDP per capita. In this process of change a large amount of agricultural
labour will be freed. The question is whether the rest of the economy in the
EU12 can absorb all this surplus labour? When looking at the overall growth
of the EU12 economies this will probably not be the case for the majority of
regions in the EU12.
Livestock shift might help to meet environmental targets
In Europe a number of hotspot regions of livestock production are present. These
hotspots are an environmental risk, where strict implementation of environmental
policies on for instance nitrogen and water quality is needed to prevent (or
stop) pollution of air, soil and water. Concentration of livestock in certain
regions can be however logic from an economic point of view, since it facilitates
an efficient supply chain. There are also regions with very low livestock rates.
In these regions livestock might enhance farmers income. In regions with a high
production of arable crops additional livestock might create opportunities for
a more closed nutrient cycling.
Large impact of bio-energy policy
The EU-biofuel directive will not be met in al 4 scenarios without additional
policies. Substantial subsidies are necessary to reach the 5.75% fuel consumption
target in 2010. The impact of such a policy to reach 5.75% will be large. Due
to this policy the aggregate income from farmers agricultural employment and
the contribution of agriculture to GDP will increase slightly. Most important
aspect is the impact on the production of biofuels and land-use. For the EU27
about 4% of total land and about 8% of agricultural land will be used to grow
first generation bio-energy crops. Erosion, carbon sequestration and biodiversity
will be negatively influenced by the increased demand for energy crops. The
biofuel directive leads to a relatively large production growth in Brazil which
induces higher farm incomes, higher land use and related negative implications
for biodiversity.
Changes in CAP policies imply higher income and less production effects
The change in the CAP policy from market price support to income support leads
to relatively minor changes in agricultural production, but to more profound
changes in agricultural income, land prices and farm structure if CAP policies
are abolished. Reduction of both income support and market support will cause
a decline in agricultural income. The impact of income support on income is
most substantial. In contrast to the EU15 the EU12 shows an increase of agricultural
income due to production growth and the accession effect until 2010.
A positive future for EU27.….
Farm income and the number of farmers will decline, but in general many indicators
develop in a positive way for the EU27. Overall GDP is growing in all scenarios,
agricultural production is maintained although on a smaller area of agricultural
land. Also the target of replacing 5.75 percent of fossil fuel with bio-energy
from crops can be reached and in most scenarios erosion decreases, biodiversity
will grow and carbon sequestration goes up.
… but regional differences remain large
Unless these positive overall EU27 developments, many regions are still facing
problems in the future. In general rural regions in the EU12 are still lagging
behind on socio-economic aspects. The structural change of agricultural production
will lead to a labour surplus that probably cannot be absorbed by the regions
itself. In marginal regions of the EU15 land abandonment will occur on an extensive
scale. As a consequence open farmland landscapes will disappear as well as accompanying
specific habitats and valued landscapes. Although improvements are observed
a large number of regions still lag behind concerning environmental issues as
erosion, biodiversity loss and large nutrients surpluses.
European policies can impact global targets substantially
The CAP reform is shifting agricultural production to large food exporting regions like
Brazil because of cost minimization. However, cost minimization of production is not
necessarily equal to the lowest environmental pressure on land. In Eururalis it is shown
that full trade liberalization leads to a global increase of agricultural land,
resulting in biodiversity loss in regions like Latin America. Moreover, the introduction
of a Biofuel Directive will have also global consequences. In a liberalized world, more
than 60% of the biofuels are imported from outside Europe, of which around 40% comes from
Brazil. The coinciding land-use impact will further deteriorate global biodiversity
outcomes, worsening the chances to meet the global biodiversity target. These external
impacts of EU policies could be taken into account in future CAP and biofuel discussions.
Need for policy coherence on different scales
On at least three scale levels there is an important role for policy to enhance
sustainable development of rural Europe. On the global level, climate change
and trade liberalization ask for attention. On the EU27 and the national level,
the future of sustainable agriculture in relations to land management and socio-economic
aspects should be discussed in relation to the CAP reform. On the regional level
the opportunities and threats coming from the higher scales should be addressed
with a fit rural development strategy. A specific rural development strategy
per region is needed to take into account the large differences between regions.
Understanding the interaction of policy on different scales is essential for
good governance.