EU agriculture – latest structural trends

The View from Europe: The average farm size in the EU has increased by 3.8 per cent per year in recent years, and the standard economic output has increased by 5.2 per cent per year, according to the latest EU Agricultural Economics Brief, published today by the European Commission.

Based on the most recent available statistics (2010), the brief confirms that there is a higher rate of change in the member states that joined the EU in 2004 and 2007, with a rise in economic output of more than 10 per cent in a handful of member states – albeit from a much lower base.

In terms of age structure, the report shows that around 30 per cent of farm managers are over-65 and confirms that smaller farms tend to be held by older farmers. Other figures show that the average size of organic farms is greater than the average for all farms taken together. In 2010, there were 12 million farms in the EU-27, stretching over 172 million hectares of land and employing 25 million people.

Despite the ongoing consolidation process, farming in Europe is still carried out primarily on small or very small holdings. Approximately 70 per cent of all farms in the EU-27 work less than 5 ha of agricultural land, and only 2.7 per cent have more than 100 ha5.

Significantly, holdings with less than 5 ha occupy only seven per cent of the total agricultural area in the EU, while the small group of holdings of over 100 ha accounts for 50 per cent of total utilised agricultural area (UAA). This structural dualism is particularly pronounced in some Eastern European countries (eg, Bulgaria, Hungary), where 80 per cent of small holdings work less than 10 per cent of the UAA.

The average standard output per farm increased by 5.2 per cent per year in the EU-27 between 2005 and 2010. This (nominal) rate is higher than the growth rate for farm size based on agricultural area, indicating a higher average economic output per unit of land.

For those countries that joined the EU in 2004 or 2007, standard output per farm grew twice as much as for the older EU Member States (EU-N12: +6.9% per year; EU-15: +3.5% per year), albeit from a much lower level. While some countries report annual growth rates of over 10% (Slovakia, Latvia, the Czech Republic, Poland and Estonia), two Member States
had negative rates (Ireland: -3.1% per year; Cyprus: -2.7% per year).

The distribution of standard output per farm shows a similar picture, with greater disparities in those countries that joined the EU in 2004 and 2007 than in the older Member States. Given the faster growth in farm standard output for the new Member States, it is reasonable to assume that these differences will decrease over time.

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