Introduction

Abstract

Structural change in agriculture can be understood in a broad sense as adjustments of economic entities in the agricultural sector in response to various driving forces. Depending on the perspective and the aggregation level of the analysis, these entities are single farms, value chains, markets or institutions. Decisions that affect structural change are, for example, market entries and exits of farms, growth and shrinkage, change of the production structure, the adoption of new key technologies or the implementation of policies aiming at internalising environmental externalities. These decisions have an impact not only on business goals, such as profitability and competitiveness, but also on public goals, such as employment, sustainability and food security. Structural change is a fundamental phenomenon that accompanies the development of market-based economies. Since the industrial revolution, structural change has been driven by shifts of supply and demand, which has led to a permanent shrinkage of the agricultural sector within growing economies. This process is characterised by high productivity gains and a relatively slow increase of demand for food, resulting in price pressure in mature markets as well as migration of the workforce away from agricultural production. This stylised picture of structural change in agriculture is well known and widely documented; however, it can no longer capture the complexity of structural adjustment processes that have recently taken place in developed economies. Today, structural change is characterised by an array of economic, political and institutional changes, which are interrelated in a complex manner.