The governmental support of farms in European agriculture aims to ensure a decent standard of living for farmers and to ensure an environmental and animal friendly production. Income levels and income stability affect the well-being of farm families and contribute to rural development and farms’ ability to provide ecosystem services. However, changes in climatic, market and political conditions create new challenges. The seminar focusses on research related to the drivers, measurement and management of the distribution of farm incomes across time and space and other measures for well-being.
The European Commission recently communicated proposals on the future development of the CAP that include ideas for simplification and more effective and efficient direct payment schemes. Direct payments are the preferred agricultural policy measures applied to support farm incomes and the provision of ecosystem services and animal welfare. Yet, adjustments in direct payment schemes are suggested to further reduce the negative external effects of agricultural production and to balance the distribution of financial means across farms. Such changes in direct payment schemes often lead to redistributions of governmental subsidies across farm types and regions and thus, together with changing market conditions, contribute to structural change of the farm sector.
Farmers` incomes are still lagging behind salaries in other sectors and the pressure on income levels and income variability will remain high or may even increase. First, budgets devoted to agricultural policies are under constant pressure in European agriculture. For example, the upcoming Brexit is expected to further exacerbate the EU budget for the CAP. At the same time, market liberalization has resulted in more competitive and volatile markets and climate change and an increasing weather variability increase the production risk faced by farmers. Also the rapid structural change in the agro-business sector towards increasingly concentrated firms operating in the up- and down-stream sectors may put pressure on farm gate prices if no actions are taken to strengthen the market power of farmers.
Policy measures are implemented to ensure that policy targets are met despite these challenges. A toolkit will be developed at the European level and EU countries will be given the flexibility to choose which of these tools to use in order to achieve the desired results. Among others, the proposals include creating an EU-level platform on risk management on how best to help farmers cope with the uncertainty of climate, market volatility and other risks.
All these factors are expected to have implications for three aspects related to farm income: average income levels as well as income distribution over time (income variability) and space (income inequality). At the same time, we observe an increasing relevance of income as measured at the household level, reflecting the importance of off-farm income and farm-diversification also into non-agricultural activities. Moreover, new measures for well-being have been proposed that go beyond monetary measures.
To progress the knowledge base and expertise on the measurement and analysis of farm incomes and farm well-being in the light of future challenges facing agriculture by bringing together researchers and policy makers.
The publication of a special issue based on the contributions in the seminar is intended. We will submit a proposal for a special issue based on selected accepted abstracts to the European Review of Agricultural Economics.
This EAAE seminar aims to provide answers to these challenges by addressing the following topics:
- Definition, measurement and monitoring of income, wealth and well-being
- Distribution of income among the farm population and the effects of agricultural policies on income distribution
- Risk and risk management in agriculture
- Factors affecting well-being and income in rural areas
- Relevance of off-farm income and wealth for farm family well-being
- Models and tools for policy evaluation and assessment
- Data availability and data quality for income evaluation and monitoring
- Role of the supply chain partners on income level, income variability and income distribution in agriculture
- Policy and private measures contributing to enhance farm income levels