Abstract
Generation renewal in farming is an urgent matter for European policy institutions that strive to maintain social cohesion and improve economic development in rural areas. Aids to young Europeans to enter the agricultural business sector have been available since 2000 to counter the negative effect of an aging rural population. This study examines for the first time the impact of the Pillar II policy measure for generation renewal on regional economic growth. The well-established input–output method was selected to estimate the income and employment effects of the policy measure, and it served as a concrete impact analysis tool. Within the AGRICORE project study for the Young Farmers Scheme in Greece, two input–output models were constructed for Thessaly and Central Macedonia, the two most agriculturally oriented regions (NUTS-2 level), to estimate multipliers and elasticities for an ex-post impact analysis of the payments of Measure 6.1 "Start-Up Aid for Young Farmers" for the CAP 2014–2020 period. Results indicate that regional output and employment are significantly benefited from the generation renewal policies while income generation is positive but at a lesser extent. Furthermore, indirect jobs created in rural areas equal to 20% of the direct employment expressed as the number of new entrants. Consequently, the Measure proves to stimulate regional output, refresh the agricultural population and enhance rural employment, and it can be a useful tool for policy makers to support rural welfare and maintain social and economic cohesion.
Highlights
The Young Farmers Scheme is an EU-wide policy measure that attempts to counter the shortage of young farmers and to secure long-term sustainability of the primary sector [1]
Researchers so far have explicitly focused on sectoral impacts and the current paper aims to assess the wider economic effects of the policy measure for rural economies
Two regional I/O models were constructed to identify the key sectors of the study areas and to estimate multipliers and elasticities to assess the impacts of the policy measure
Summary
The aging population in Europe is a significant problem that affects social and healthcare services and economic resilience and food security. The European Union undertakes specific aids to foster generation renewal in rural Europe through Pillar II direct payments for the establishment of young farmers below 40 years old. The Young Farmers Scheme is an EU-wide policy measure that attempts to counter the shortage of young farmers and to secure long-term sustainability of the primary sector [1]. At this point, Zagata and Sutherland (2015) [2] separate young farmers from new entrants (in the form of farmers under 40 years old) and they argue that this shortage is mostly prevalent in countries with small-scale holdings such as Portugal, Italy, and Greece. The importance of generation renewal is recognized by European institutions as the related CAP measures attempt to assist new entrants to overcome entry barriers, secure farm sustainability, and achieve farm succession for remote and rural areas [3]
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