Human Capital in EU Agriculture: Challenges ahead Key questions for the Future Tassos Haniotis Director Economic analysis, perspectives and evaluation; communication DG Agriculture and Rural Development EXPO Milano 2015 Seminar "New challenges, New generation" Agriculture and Rural Development
1. Human capital in the EU: key data 2. The CAP and young farmers, today 3. Elements for reflection 2
1. Human capital in the EU: key data 3
In 2010, 25 million people worked regularly (but not always full-time) on roughly 12 million farms. Most farm managers were older than 55 years. 35% 30% 25% 20% 15% 16.6% Age of farm managers* 22.8% 23.5% 29.7% 10% 7.5% 5% 0% Less than 35 years 35-44 years 45-54 years 55-64 years 65 years or over *Farm manager: the person responsible for the normal daily financial and production routines of running the farm. 4
Old West versus Young East? 5
Age structure in farming in the developed countries 100% 90% 80% 70% 60% 50% 40% 65 years or over From 55 to 64 years From 45 to 54 years From 35 to 44 years Less than 35 years* 30% 20% 10% 00% Norway Switzerland EU28 United States Japan Source: EU-28 Eurostat Farmstructures survey; US Bureau of Labour Statistics US Government; Japan Statistical Office Japan 6
ha UAA/holding EUR/holding Younger farm managers have bigger farms (Eurostat-FSS) 25.00 Agricultural area per holding (EU-28, 2010) 40000 Standard output per holding (EU-28, 2010) 20.00 35000 30000 15.00 25000 10.00 20000 15000 5.00 10000 5000 0.00 total Less than 35 years 35-44 years 45-54 years 55-64 years 65 years or over 0 total Less than 35 years 35-44 years 45-54 years 55-64 years 65 years or over 7
Lower income than other age groups (FADN) Euro 25000 20000 15000 10000 5000 0 < 35 35-45 45-55 55-65 > 65 FNVA/AWU at EU27 level All age classes EU27 Age 8 Source: FADN 2012
Agricultural training much room for improvement! 90% Agricultural training of farm managers (EU-28, 2010) 80% 70% 60% 50% 40% 30% Less than 35 years From 35 to 44 years From 45 to 54 years From 55 to 64 years 65 years or over 20% 10% 0% Practical experience only Basic training Full agricultural training 9
Who would like to become a farmer? 218 000 000 216 000 000 214 000 000 212 000 000 210 000 000 208 000 000 206 000 000 204 000 000 202 000 000 200 000 000 198 000 000 The pull of the cities (population in predominantly urban areas, EU-28) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 115 000 000 114 500 000 114 000 000 Rural exodus (population in predominantly rural areas, EU-28) 113 500 000 113 000 000 112 500 000 112 000 000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10
2. The CAP and young farmers, today 11
The CAP 2014-2020 and generational renewal Towards an integrated approach Pillar I: Direct Payments Pillar II: Rural Development Payments New Young Farmer's Scheme (top-up compulsory for the MS) Priority in the national reserve Several support measures Priority/higher aid intensity Financial instruments 12
New Rural Development Programmes 2014-2020 (in progress of approval) Measure "Start-up aid for Young Farmers" 25 MS implementing it 75% of the Rural Development Programmes 5.3 Billion total public expenditure 160 000 holdings to be supported 13
New Direct Payments 2015-2020 New Young Farmer's Scheme Estimate of the share of national ceilings for DP: 1.33% (2015) Diversity among MS in the levels of aid Training as additional criterion (in 8 MS + 3 regions) Appropriate skills as additional criterion (in 6 MS + 2 regions) 14
3. Elements for reflection 15
Looking ahead Challenges for the agricultural sector Policy context after the last CAP Reform Scarcity of natural resources Food supply Climate change The CAP Subsidiarity Simplification Pressure on CAP budget Jobs, Growth and Investment Free Trade Agreement US Political Guidelines for the Juncker Commission A Resilient energy Union Deeper Internal Market 16
Key challenges to young farmers Overcome the barriers to enter the sector Long run resilience Access to land Access to finance Training Changing demands Income Technological change Policy instruments 17
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAP reform path and CAP budget, 1980-2020 80 70 60 billion EUR (current prices) EU-10 EU-12 EU-15 EU-25 EU-27 actual expenditure 1980-2014 EU-28 outlook 2015-2020 0.8% 0.7% 0.6% 50 0.5% 40 0.4% 30 0.3% 20 0.2% 10 0.1% 0 0.0% Export subsidies Other market measures Market expenditure Coupled support Decoupled support Direct payments Green payments RD environment/climate Other rural development CAP as share of EU GDP Source: DG AGRI. 18
Key questions for the future How to support young farmers to overcome the barriers to the sector? How to enhance the complementarities between jobs and physical capital? How to support young farmers to exploit emerging opportunities? 19
Thank you very much 20