Value Added and Employment Growth in EU Primary Agriculture and Food Processing

Abstract

SummaryThe relative economic importance of agri‐food production in EU Member States is in decline. This article examines the relationship between primary and processing agri‐food sectors at the Member State level in the European Union, focusing on value added and employment trends. Notable differences are observed in the performance of the agri‐food sector between the Member States, and substantially different economic developments are evident in the primary and processing sectors. The agricultural and food processing sectors remained more important in the economies of the EU Member States of Central and Eastern Europe than in those of Western Europe. The composition of primary agricultural output and the associated strength of the processing sector can partially determine the growth in incomes and employment that individual Member States can hope to derive from developments in their agri‐food sectors. This suggests that the agri‐food sectors in individual Member States have differing future income and employment‐generating capacity, and generally limited employment growth potential, with associated implications for the design of future agri‐food policy.