Generational renewal in farming is a big topic in Brussels right now. It is likely to feature heavily in the Vision for Agriculture and Food that the Commission is expected to publish shortly in response to the report of the Strategic Dialogue on the Future of Agriculture. Von der Leyen’s Mission Letter to the incoming Commissioner for Agriculture and Food Christophe Hansen directed him “to present a strategy for generational renewal in agriculture, notably supporting family farms and young farmers to access capital”. In his confirmation hearings with the European Parliament, Hansen stated that “Creating the conditions to turn the trend of lagging generational renewal, by making sure that farming remains a viable and attractive vocation decades from now, will be the central tenet of my Vision.” In line with this commitment, generational renewal was one of the issues addressed in the first Youth Policy Dialogue organised by DG AGRI last December.
Generational renewal is not a new topic in Brussels. Attracting and sustaining young farmers and new farmers is one of the nine specific objectives for the CAP 2023-2027 spelled out in the CAP Strategic Plans Regulation. In total, €6.8 billion of support from EAGF and EAFRD has been allocated to young farmers for the 2023-2027 programming period. This comprises three instruments (a) the complementary income support for young farmers (Pillar 1); (b) the setting up of young farmers installation aid (Pillar 2); (c) 50% of the allocations for investment support specifically targeted to young farmers. The mapping exercise undertaken for the Commission of national CAP Strategic Plan allocations provides data on overall public spending on young farmer measures. These measures build on similar support measures in the previous CAP programming period.
As input into this debate, the EU CAP Network has produced two useful reports, one summarising a workshop on experiences evaluating these young farmer measures, and the other summarising lessons learned from Member State evaluations undertaken during the CAP 2014-2020 programming period.
Ireland also has a skewed age distribution in farming with 31% of its farm holdings managed by persons over 65 years of age in 2020, similar to the EU as a whole. The Irish Minister for Agriculture and Food has established a Commission on Generational Renewal in Farming to bring forward recommendations for policy options to improve this situation with a mandate to report by the middle of this year. The Commission invited submissions through a public consultation, I made a submission which can be downloaded from Google Drive. While there are important differences in the context for generational renewal across EU Member States, there may be some resonance between my analysis of the Irish situation and in other Member States.
The main points in my submission can be summarised as follows:
- The case for policy intervention to support generational renewal is because it can foster agricultural entrepreneurship and not in order to reverse a decline in the number of farms.
- The ageing of farmers is primarily a consequence of limited opportunities for younger farmers to enter the profession. An effective response requires addressing the exit of older farmers.
- The age structure of farmers is deteriorating but standard statistics may exaggerate the problem by failing to reflect the way succession is managed on family farms. Similar ageing trends are also observed in the workforce as a whole so it is not solely an agriculture-specific issue.
- Generational renewal is not a universal problem across European countries. There are remarkable differences in the age structure of farmers across European countries suggesting there are lessons to learn from those countries with a more balanced age structure.
- Simulation modelling suggests there is no financial incentive for Irish farmers to transfer their holding before death. One way to address this would be to exclude from the definition of an active farmer eligible for CAP payments those in receipt of state retirement pensions.
Putting an age limit on eligibility for direct payments would be the prerogative of Member States under the New Delivery Model introduced in the CAP Strategic Plans Regulation. The one country where this policy is effectively implemented is Switzerland, as demonstrated in the following figure which shows its age distribution in 2008 and 2018. There is a clear shift from a left-leaning distribution in 2008 to a right-leaning distribution in 2018, indicating a gradual ageing of the farming population. But in both years there is a sharp drop in the number of farmers at age 65 which is the retirement age for males in Switzerland. Farmers over the retirement page do not receive direct payments. The consequence is that Switzerland has the highest share of farmers under the age of 35 years in the Eurostat farm structure statistics which also include several non-EU countries (14.1% in 2020) and the lowest share over 65 years of age (6.3% in 2020).
Source: Zorn, A., Agroscope Science 88, 2020
Withdrawing eligibility for income-support direct payments from farmers over the pension age in a country would of course be politically very difficult. It would have implications for the expected income of retiring farmers and would at least require a period of phasing in to allow those coming to retirement age to adjust their expectations. It would be easier to implement in countries that already have generous pension entitlements. But allocating yet more funding to young farmer measures mainly provides support to those who have already succeeded in entering the farming profession. There is mixed evidence on the extent to which it actually allows or facilitates more young people to enter farming. Here the principal barrier is gaining access to land, and this requires the exit of older farmers. Without giving a clear financial incentive for earlier transfer, the generational imbalance between young and old farmers will hardly improve.
This post was written by Alan Matthews.
Submission to Commission on Generational Renewal in Agriculture.
Picture credit: Robert and Frances Andrews commissioned as a marriage portrait and executed by Thomas Gainsborough, painted around 1750 when Robert was around 25 and Frances 18, via Wikipedia, public domain.
