LSIRD NAPLIO CONFERENCE PAPERS


Marginalisation of agricultural land in Europe

Floor Brouwer, David Baldock, Frans Godeschalk & Guy Beaufoy


SUMMARY

There is no clearly agreed European definition of agricultural marginalisation and several formulations of the concept can be found in the literature. Agricultural marginalisation could be considered to be a process, driven by a combination of social, economic, political and environmental factors, by which certain areas of farmland cease to be viable under an existing land use and socio-economic structure.

Areas which are most susceptible to marginalisation are likely to be found in extensive farming regions and those where small-scale farming is prevalent. Regions dominated by extensive farming include most of Spain, large areas of southern France, parts of the UK, Ireland and Italy. They cover about 30% of the utilized agricultural areas but only around 15% of agricultural holdings. These regions account for more than half of all holdings in EUR 12 and only 15% of the utilized agricultural area. Many of the farming systems of greatest importance for nature conservation and the landscape are found in the extensive agricultural regions.

The system of compensatory payments made to farmers within the group of extensive farming regions are about a third of family farm income which was about double that of the average for all farms in EU 12. The future of these regions need to be considered alongside developments in agricultural policy since the 1992 reform of CAP.

INTRODUCTION

There is no clearly defined and commonly accepted definition of what is marginal land or marginal agriculture. Perhaps the most commonly accepted definition of a marginal agricultural situation is one which is at the margin of economic viability. Agricultural marginalisation could be considered to be a process, driven by a combination of social, economic, political and environmental factors, by which certain areas of farmland cease to be viable under an existing land use and socio-economic structure. It may consist of a combination of intensification and extensification of land used agriculturally. Marginalisation takes a variety of forms and occurs at different scales, ranging from the individual patch of land to sizeable regions. It could eventually lead to abandonment, which limits management of semi-natural areas.

Marginalisation of agriculture on European farms appears to be particularly concentrated in the less fertile and drier zones in the Mediterranean. In these regions there are large areas of agricultural land which is extensive and largely traditional in character and relatively well integrated with the natural environment. Animal production sectors including beef, sheep and dairy are of major importance to nature conservation in these areas as well, as they manage most of the areas with high nature values. They may maintain viability of extensive farming systems and subsequently to prevent abandonment of agricultural land.

The objectives of the paper are (i) to analyse current trends and processes of marginalisation in Europe; (ii) to examine methods for identifying areas within which agricultural land is marginal; and (iii) to investigate agricultural policies which might contribute to the mitigation of environmentally damaging effects of agricultural marginalisation and encourage viable uses of land in marginal areas.

The paper derives from a recent project by the Institute for European Environmental Policy (IEEP) in the United Kingdom and the Agricultural Economics Research Institute (LEI-DLO) in the Netherlands (Baldock et al., 1996).

CURRENT TRENDS AND PROCESSES OF MARGINALISATION

A possible definition of a marginal agricultural situation is one which is at the margin of economic viability. For example, a marginal site could be defined as one in which 'the present agricultural use yields a factor income which cannot cover the costs of the factor amounts invested in it or, given constant productivity and price trends, will cease to cover them in the next few years' (CEC, 1980).

Clearly it is not economic factors alone which make a given agricultural situation marginal. Environmental factors, geographic location, agricultural structures, social factors and policy factors need to be considered as well. This is reflected in the terminology in some languages for referring to farmland abandonment (a phenomenon commonly associated with marginalisation). For example, in Germany there are terms for abandonment caused predominantly by social, structural or natural factors (see CEC, 1980):

- Sozialbrache refers to farmland which leaves agricultural use for social reasons, for example, agriculture near to cities which is abandoned as a result of the stronger income earning potential of employment in the city;

- Strukturbrache refers to marginalisation caused by structural weaknesses, such as very small and/or fragmented holdings or poor infrastructure;

- Grenzertragsbrache refers to land which is inherently marginal due to physical conditions (soil, slope, altitude, climate, etc.).

In French, there are similar terms to differentiate between various sorts of abandoned land, such as friche social, friche technique (the result of technological change in farming systems), etc.

Marginal situations are the result of the interaction over time of a combination of factors. Pinto-Correia and Sørensen (1995) stress that marginalisation is a dynamic concept, which is related directly to the conditions at the moment of analysis and which depends on a multitude of factors, including the geographical situation and the age, financial resources and character of the farmer in question.

Thus, a plot of land which, due to its physical characteristics and poor yield potential, may be considered marginal in southern England, may be regarded as good arable land in Spain. Similarly, a farm which is abandoned by an aging farmer in southern Portugal may be converted into a highly competitive holding by a young Dutch incomer with the necessary resources.

It is important to recognize that marginal situations may exist at different geographical levels, for example:

- Regional: in the European context, a region may be marginal in broad physical and socio-economic terms, with predominantly unfavourable conditions and uncompetitive forms of agriculture involving low productivity and income levels, remoteness from markets, aging population, etc. The possibility of widespread marginalisation in such a region may be considered high, although there may also be agricultural areas which are highly productive and competitive.

- Local areas: within a region, certain types of land use may become marginal as a result of changing socio-economic and technological conditions. Grazing marshes provide a good example. Such areas may exist even within generally very productive regions.

- Farm level: an individual farm may be uncompetitive for a variety of reasons, such as small size, fragmented land, degraded infrastructure and capital equipment, or the age of the farmer. Generally, such holdings are taken over by other farmers or land uses, depending on local conditions. In more marginal regions, total farm abandonment may occur.

- Within a holding, an individual plot of land may be marginal due to physical handicaps, such as poor access, steep slopes, waterlogging or distance from the main holding.

Marginalisation may be seen as a change in agricultural land from a more profitable to a less profitable one (Bethe & Bolsius, 1995). This might involve among others a change from arable cultivation to permanent grassland or from grassland to forest. A process of agricultural marginalisation with areas of farmland which cease to be viable may produce a number of different responses from farmers. For example, some may attempt to improve viability and combat marginalisation, whereas others may run down or abandon agriculture altogether. In certain circumstances, it may be possible to intensify production and to increase output per hectare, particularly when significant financial incentives are available in the form of production-oriented grants and subsidies, as was the case in most EU Member States during the 1960s and 1970s. During this period, there were many policy initiatives designed to create more economically viable farm structures, especially in areas of predominantly small-scale farming or minifundia, with public funding for restructuring and consolidation of holdings - generally transforming the landscape in the process. Publicly funded projects of this sort continue to be undertaken in certain southern regions of the EU, such as Galicia in Spain, often with a severe impact on the natural environment and landscape.

Where greater agricultural productivity does not appear a viable option, a gradual running down or abandonment of agriculture is more likely. However, before this situation is reached, a range of different management choices can be made by farmers with the aim of staving off marginalisation and maintaining viability. Often these choices involve reducing labour intensive tasks, such as traditional hay-making, maintenance of walls, hedges, etc. The different responses of farmers will have a series of consequences for the land-use pattern, landscape and natural environment of a region. Possible responses include:

- a change from one agricultural land use to another, e.g. from crops to permanent grassland, typically involving the simplification of a mixed farming system into livestock production only;

- changes to farming systems which do not significantly alter the existing agricultural land use, e.g. reduced input use and/or stocking densities, reduced maintenance of infrastructure, etc., often known as 'extensification' in English;

- a 'contraction' of the farming system, usually involving an intensification of production on the better land and the running down or abandonment of poorer, less accessible parcels;

- restructuring of holdings as some farmers leave the land and others take it over in order to increase their farm size (often known as 'extensification' in French);

- complete farm abandonment, typically leading to natural succession and potentially to the development of scrub and woodland (sometimes referred to as wilderness);

- a change of land use out of agriculture, for example to forestry or urban building.

Within a given area, a variety of changes may take place side by side, in interaction with one another or quite separately. Marginalisation often is a complex and dynamic process, proceeding at varying speeds. The outcome is not necessarily abandonment - indeed, the process can be reversed. In some cases, a significant decline in the number of farmers, accompanied by the abandoned or reversion to grazing of some parcels of land, may subsequently allow for the creation of larger and more viable holdings and hence to periods of greater stability.

At the other extreme are regions where physical conditions may be favourable for agriculture, but where a high level of economic development and increasing urbanization of the countryside results in agriculture being driven out by other land uses, such as out-of-town shopping centres and horse paddocks ('horsiculture') or, in certain situations, being replaced by specialized recreation or conservation uses such as nature reserves or country parks. Here, marginalisation is driven by external pressures and urbanization rather than by agricultural decline. A slightly different phenomenon affecting farmland in urban fringe areas is a combination of 'urban nuisance' (such as vandalism) and the anticipation of urban development which can lead to neglect and abandonment of farmland. A survey of London's Green Belt in 1979, for example, found that one third of farmland there exhibited signs of idling or urban nuisance (Whitby, 1992).

The phenomenon of land abandonment and its associated problems is a common theme of research into agricultural marginalisation. However, the notion of abandoned land is itself complex and often not clearly defined. For example, some commentators from regions with predominantly intensive forms of agriculture regard rough grassland and scrub managed under extensive grazing regimes as a form of semi-abandonment (for example, see CEC, 1980). There is often confusion over the term 'abandoned land', particularly when translating between languages. It is important to differentiate between situations such as spontaneous abandonment and planned withdrawal. Increasingly in Europe, farmland is withdrawn from agriculture under schemes such as set-aside (nevertheless commonly known as abandono de tierra or 'land abandonment' in Spain). Apparently abandoned land often is not truly abandoned, but merely temporarily out of use and awaiting a new owner or tenant. Even totally abandoned farmland in France and the Mediterranean countries often has a legal owner, probably living in a town or city, who may one day choose to put it to some use, such as building a holiday home.

Bandarra (1994) points out that it is often very difficult to identify abandoned land. Particularly in marginal regions, such as parts of Alentejo in southern Portugal, arable land may be left fallow for many years, with only intermittent grazing during this time. Over very large areas of Iberia, farmland is largely unfenced. Consequently, land which has been abandoned by its owner may continue to be grazed by sheep and goats for many years, thus preventing natural succession to woodland.

In general terms we can define abandonment as taking place when the neglect of the main productive elements is allowed to decline beyond a point at which recuperation is practical, or economically viable. The neglect of retaining walls on terraces in semi-arid regions to the point where landslips become established is a clear example. In the case of permanent pastures, for most types of semi-natural sward it would be possible to define a species composition which is indicative of appropriate grazing pressure and more or less optimum productivity and nutritional value. In the event of insufficient grazing pressure, sward quality will tend to decline as litter accumulates and coarser and less palatable species become dominant. Ultimately, undergrazing can be expected to result in a decline in grazing value and hence abandonment, as well as in a significant loss of species diversity. Neglect and declining management may be illustrated equally by localized overgrazing, for example, by unshepherded flocks. Furthermore, the results tend to be the same, in other words, declining grazing value and ultimately abandonment.

AREAS WITHIN WHICH AGRICULTURAL LAND IS MARGINAL

So far, the available knowledge remains limited regarding the major driving forces of the occurrence of marginalisation and subsequent abandonment of agricultural land in Europe. It is mainly based on diverse small-scale case studies. A review is made here of potential statistical indicators from European databases which might represent some of the major driving forces behind the occurrence of marginalisation in the European Union. A broad set of indicators was selected, divisible into five general groups:

- indicators of biophysical conditions for agriculture, with environmental factors such as soil quality, climatic conditions, water supply, relief, altitude. Such biophysical conditions are major determinants of land utilisation;

- indicators of agricultural land utilization including the trends in land utilisation as well as the price of land used agriculturally;

- indicators of farm income to reflect income generated from farm activities, as well as the share of direct subsidies in family farm income;

- indicators of farm structure to reflect the intensity of agricultural production, as well as agricultural structures and social factors of agricultural holdings;

- indicators of rural and regional development in order to compare viability of agriculture with the rest of the economy.

The indicators were used as a means of investigating the potential occurrence of marginalisation and abandonment of agricultural land in the twelve EU countries for which data is available. A limited number of key indicators was selected in order to simplify the analysis. They were to reflect important aspects of biophysical conditions, land use, farm income and structure:

Biophysical conditions

- Share of Less Favoured Areas (LFA) in Utilized Agricultural Area (UAA) (%)

Land use

- Decrease in UAA (%)

Farm income

- Family Farm Income per Family Work Unit (FFI/FWU) (ECU)

Farm structure

- Standard Gross Margin per hectare (SGM/ha) (ECU)

- UAA per holding (ha)

- Share of farm holders of age 55 years and older (%)

Information was obtained from the Farm Structure Survey (FSS) of Eurostat, the Farm Accountancy Data Network (FADN) of the Commission of the European Communities (CEC) and the regional databank (REGIO) of Eurostat. FSS is periodically conducted to collect data on the structure of farms. FSS data refer among other things to land utilisation, livestock population, the agricultural labour force and the number of full-time and part-time farmers. FADN contains farm level data on farm structure, total output, intermediate consumption and a profit and loss account. Finally, Eurostat's data REGIO covers the principal aspects of the economic and social life of the EU, such as demography, economic accounts and employment at a regional level.

On the basis of the indicators selected, a distinction was made between five different groups of regions within the European Union. It is aimed at contributing to an investigation of the potential occurrence of marginalisation and abandonment of agricultural land in Europe.

The five groups were derived from the indicators by using a cluster analysis which was carried out to find a certain structure in a broad set of observations with various phenomena. The five regions identified can be characterized as follows:

- regions with highly productive agriculture, covering almost 40% of UAA in the EU 12 and about 20% of agricultural holdings. They cover most of the northwestern part of the EU, excluding Ireland and parts of the UK;

- regions of medium farming productivity, covering about 10% of total UAA and accounting for about 10% of all farm holdings. This group covers large areas of Germany and parts of France;

- regions dominated by extensive farming. They cover about 30% of the UAA but only around 15% of agricultural holdings and include most of Spain, large areas in southern France, parts of the UK, Ireland and Italy;

- regions where small-scale farming dominates. These regions account for more than half of all holdings in the EU 12 and only about 15% of the UAA. They cover most of Portugal, Italy and Spain;

- a small residual group where agriculture is more extensive than the average in the EU. A substantial area of land lies outside the Less Favoured Areas.

A graphical presentation of the five groups of regions distinguished is presented in Figure 1.

map of marginal farming regions in Europe

Figure 1 Classification of regions according to the cluster analysis (click for larger map)

The cluster analysis provides two types of regions that are considered to be susceptible for marginalisation. One type which is mainly characterised by extensive agriculture (Extensive Farming Regions), the other one which mainly includes small-scale farming (Small-scale Farming Regions).

Some characteristics of these regions are provided in the following (see also Table 1 comparing quantitative figures of the five regions identified).

Table 1 Average of the indicators for the five clusters of regions

Indicator Highly productive regions Medium productive regions Extensive farming regions Small- scale farming Other extensive regions
Key indicators used to cluster regions
Share of LFA in UAA (%) 16 83 85 65 38
Decrease in UAA (%) 4 5 ­2 ­1 11
FFI/FWU (ECU) 16,200 10,300 8,700 6,500 9,500
SGM/ha (ECU) 1,730 980 430 1,660 530
UAA per holding (ha) 33 19 37 5 33
Share of farm holders of age 55 years and older (%) 46 42 51 60 43
Other indicators
Price of land per hectare (classes) Medium Medium Low Medium Medium
Share of direct subsidies in FFI/FWU (%) 11 17 28 12 18
Change in SGM/ha (%) 90 69 29 77 116
Share of farm holders with work time below 50% of AWU (%) 36 47 49 65 18
GDP/inh. (ECU) 15,100 12,800 10,400 9,500 9,400
Share of farm holders with other gainful activities (%) 25 36 31 29 24

Source: FADN, Eurostat; Adaptation LEI-DLO

Extensive Farming Regions

This group of regions can be characterized by Extensive Farming Regions, with low intensity of farming on a per hectare basis since the SGM/ha is less than half of the average of EU 12. The share of LFA in UAA is very high (85%). The share of direct subsidies in FFI/FWU is high (28%), more than double that of the average of EU 12. The increase over time in SGM/ha has been small.

The extensive nature of farming is also reflected by the observation that this group of regions cover about a third of total UAA in EU 12 and approximately 16% of all agricultural holdings. This cluster includes many relatively big farms, since farm size is more than double that of the average in EU 12. The extensive nature of agriculture is also reflected by low density of livestock population. Stocking density of grazing livestock is very low (0.6 LU per hectare of forage crops).

Small-scale Farming Regions

This cluster is characterised by Small-scale Farming Regions, with relatively small farms (an average of 5 hectare) and rather intensive farming practice. They only cover 17% of UAA in EU 12. The SGM/ha is relatively high (1,650 ECU), but FFI/FWU is low (6,500 ECU), and still substantially below GDP/inh. in that group of regions (9,500 ECU). The intensity of farming is only slightly below that in the Highly Productive Regions, although farm size is far below that in all other groups of regions. This group of regions include more than half of all agricultural holdings in EU 12, and about 40% of them belong to the farming types of permanent crops (including vineyards) The share of farm holders of 55 years and older is about 60%, which is above that in the other regions. The age distribution of farm holders is rather uneven, since about a third of all farm holders are at the age of more than 65 years. Also, only 6% of all farm holders in this cluster are younger than 35.

The assessment presented in this section is based on conditions before the reform of the Common Agricultural Policy (CAP) in 1992. Some background information on the importance of agricultural policy to viability of regions which are susceptible to marginalisation is provided in the next section.

THE ROLE OF AGRICULTURAL POLICY

The future of regions which are considered to be susceptible to marginalisation must be considered alongside developments in agricultural policy since the 1992 reform of CAP, which recognised the need for ' ... contributing to an environmentally sustainable form of agricultural production and food quality and formalizing the dual role of farmers, as food producers and guardians of the countryside (CEC, 1992: 36).

In the period before the 1992 CAP reform direct subsidies were more significant in regions with extensive farming systems than in the other group of regions in the then twelve EU countries. Direct subsidies in regions with extensive farming systems have been very important compared to the group of other regions. These subsidies include grants and subsidies which have been granted from public funds and have resulted in a specific receipt. In 1990/91 about 20% of all direct subsidies in the EUR 12 were directed towards the regions with extensive farming systems, although their share in final production was only 9% (Table 2). Direct subsidies in this group of regions on average are about a third of family farm income, corresponding to almost 3,000 ECU per holding, which was about double that of the average for all farms in EUR 12 at the time. The share of direct subsidies in FFI exceeds 50% in several regions, including Corse (France), Valle d'Aosta (Italy), Alentejo-Algarve (Portugal), Wales, Scotland and Northern Ireland (United Kingdom). Direct subsidies for drystock farms exceed 10,000 ECU in several regions of France (Midi-Pyrénées, Auvergne and Corse) and of the United Kingdom (Wales and Scotland).

The share of direct subsidies in Family Farm Income was only 8% within the group Small-scale Farming Regions (Table 2). They amounted to an average of 640 ECU per farm. Among the Small­scale Farming Regions identified this share is highest in Norte-Centro and Lisboa-Vale do Tejo (Portugal). The share of direct subsidies in FFI is only 15% on drystock farms in the Small-scale Farming Regions, compared with 70% in Extensive Farming Regions. The average for all drystock farms in the EU 12 is almost 40%.

Table 2 Direct CAP agricultural subsidies by group of regions (1990/91)

Extensive farming regions Small-scale farming regions Other regions  Total
Average farm
Total direct subsidies (mln ECU) 1,380 1,335 3,830 6,545
Direct subsidies per farm (ECU) 2,991 641 2,009 1,471
Share direct subsidies in Family Farm Income (%) 34 8 12 13
Non­LFA
Total direct subsidies (mln ECU) 170 506 1,944 2,620
Direct subsidies per farm (ECU) 1,434 490 1,712 1,146
Share direct subsidies in Family Farm Income (%) 16 5 8 8
LFA
Total direct subsidies (mln ECU) 1,210 829 1,886 3,925
Direct subsidies per farm (ECU) 3,529 791 2,447 1,815
Share direct subsidies in Family Farm Income (%) 40 12 22 22
of which Mountain Areas:
Total direct subsidies (mln ECU) 346 519 366 1,231
Direct subsidies per farm (ECU) 5,364 759 1,902 1,308
Share direct subsidies in Family Farm Income (%) 43 12 17 17
of which Other LFA:
Total direct subsidies (mln ECU) 864 310 1,520 2,694
Direct subsidies per farm (ECU) 3,103 850 2,627 2,206
Share direct subsidies in Family Farm Income (%) 39 13 24 25

Source: FADN-CCE-DG VI/A-3; adaptation LEI-DLO.

- Less Favoured Area Scheme

The LFA scheme is oriented to allow for continuation of farming in less-favoured areas by ensuring a minimum level of population or by conserving the countryside. The LFA Directive (75/268) was the first common instrument of regional agricultural structure policy. Less Favoured Areas are areas where agriculture is hampered by permanent natural handicaps. The main objective of the LFA Directive is the continuation of farming in those regions and thereby maintaining a minimum level of population or conservation of the countryside. Three types of LFAs can be distinguished, i.e. (i) mountain areas, (ii) areas in danger of depopulation and where the conservation of the countryside is necessary, and (iii) areas affected by specific handicaps in which farming must be continued in order to conserve the countryside. Member States are authorised to give farmers direct payments in order to support farm income.

The European Agricultural Guidance and Guarantee Fund (EAGGF) expenditure on LFA compensatory payments have increased substantially during the past couple of years. Most of it take the form of headage payments per Livestock Unit (LU). However, this increase in support has been distributed very unevenly within the EU. While payments in France, Ireland and Luxembourg more than doubled, they fell in Portugal, Spain and Greece. Naturally, there are variations between years but it is clear that the system of LFA compensation payments is making only a modest contribution to the viability of holdings in several Member States including Italy where the small size of many farms has excluded them from the support sytem in the past. The LFA Scheme is only applied to part of the area in case large areas are under Objective 5a (Brouwer and Van Berkum, 1996). Objective 5a is applied in large areas of Italy. Support to farmers is also channeled through other instruments, including Objective 1 and 5b. Although the number of holdings receiving payments is relatively high in Greece and Spain, both the level of support per LU and the average allowance per holding is low (CEC, 1995a).

The allowances which were paid to EU 12 Member States in 1994 amount to 1.38 billion ECU in total, which also includes the national contributions. The amount paid per holding ranges between less than 500 ECU (Spain and Portugal) and more than 4,000 ECU (Luxembourg). The allowance per LU is lowest (36 ECU) in Spain and highest (113 ECU) in Luxembourg (Table 3).

Table 3 The application of the LFA Directive in 1994 (EU 12)

Country Compensatory allowances granted for LFA Share of holdings with compensation (% of total) (ECU/LU)
Number of holdings Amount paid per holding

(ECU)

Allowance per LU
Belgium 6,873 1,329 86 8
Denmark 3) 3) 3) 0
Germany 231,275 2,163 93 35
Greece 1) 190,262 521 61 22
Spain 183,561 447 36 12
France 1) 139,435 2,127 70 15
Ireland 105,619 1,575 88 62
Italy 2) 39,056 689 57 1
Luxembourg 2,515 4,437 113 63
Netherlands 3,901 884 104 3
Portugal 89,510 410 54 15
United Kingdom 60,912 2,419 47 25
EU 12 1,052,919 1,310 67 13


1) Provisional data for the year 1994; 2) Not complete; 3) Not available.

Source: CEC, DG VI-F-II.1.

About one quarter of all the farms located in LFA in the EU receive compensation under the LFA Scheme. Participation rates in the southern Member States are below those in the northern Member States, primarily because about half of all LFA holdings in these countries are smaller than the minimum size for eligibility which is 3 ha (2 ha in the Italian Mezzogiorno, the French overseas departments, Greece and Spain, 1 ha in Portugal and 0.5 ha in Madeira) (Terluin et al., 1993). This is especially the case in Italy where 29% of the farms are less than 1 ha in size.

- Price support given under CAP

The distribution of the Guarantee Section expenditure has been assessed in relation to the groups of regions identified in the previous section. Total indirect subsidies to Extensive Farming Regions amounted to 2,670 million ECU. In comparison it amounted to 4,650 million ECU in Small-scale Farming Regions. Extensive Farming Regions have a 11% share of indirect subsidies, which is slightly above their share in total final production of the EU12. However, this group of regions represents some 26% of total UAA in the EU12.

Table 4 provides an assessment of the 'standard' ewe premiums after the CAP reform, based on a categorization of farms with ewes in 1990/91, including both Extensive Farming Regions and Small­scale Farming Regions. About 26 million ewes are in regions with extensive agricultural systems, mainly in large areas of Spain (Castilla-Leon, Aragon, and Castilla-La Mancha) and the United Kingdom (Wales and Scotland). About 10 million ewes are in regions with small­scale agriculture, mainly in parts of Greece (Ipiros Peloponnisos Nissi Ioniou and Sterea Ellas Nissi Egaeou Kriti) and Italy (Lazio). A very high proportion of all farms are eligible for full compensation because the number of ewes does not exceed the limits set into EU regulation. The 'standard' ewe premium in the group of regions with extensive farming systems is on average 7,400 ECU per farm. It exceeds 10,000 ECU per farm in the region of Castilla-La Mancha (Spain), as well as in parts of the United Kingdom (Wales and Scotland).

Table 4 'Standard' ewe premiums after 1992 on farms with ewes according to the new CAP regime by group of regions (1990/91)

Extensive farming regions Small-scale farming regions Other farming regions Total regions
Number of represented farms (x 1,000) 114 227 194 536
Number of ewes per farm 223 44 121 110
Normative ewe premiums per farm (CAP reform) (ECU) 7,404 1,495 3,926 3,638
Regional number of ewes (x1,000) 25,578 10,095 23,491 59,164
Regional normative ewe premiums (CAP reform) (m ECU) 848 340 762 1,949

Sources: FADN-CCE-DG VI/A-3; adaptation LEI-DLO.

The development of the market support regime for meat from sheep and goats is of particular importance in many more marginal areas where livestock grazing predominates. Prior to 1992, the number of breeding ewes was expanding rapidly in some regions including Ireland and parts of the UK and Spain. However, production was less profitable in some traditional regions and the number of breeding ewes and goats was stable or falling in parts of France and Greece. Since 1992 and the introduction of a ceiling on the number of ewes per farm eligible for the annual premium, numbers have stabilized. The European Commission expects the total number of sheep and goats to remain around its present level of approximately 98 million head and the pattern of trade between EU countries is likely to remain broadly as it is now (CEC, 1995b). The right to rear sheep and goats and claim an annual premium has itself acquired a value, and is saleable, as are milk quota in several Member States. This will provide some more marginal farms with a new asset and affect management decisions in the short and long term. Some producers may be reluctant to dispose of a potentially valuable asset and may continue to farm for longer than they otherwise would have done. Others may lease quota rights and try to keep open the option of a return to production. In general, the rate of structural change can be expected to be slower than otherwise would have occurred, although many farmers may still have an incentive to concentrate stock on better land and reduce the level of grazing on outlying areas and semi-natural vegetation where management is a priority from an environmental perspective.

CONCLUDING REMARKS

1. Marginalisation on European farms takes a variety of forms and occurs at a range of different scales, from the individual patch of land no longer worth cultivating to sizeable regions. While most forms of marginalisation occur progressively over a period of time, not all result in a permanent change in land use and some are purely temporary, occurring for example on farms during a transition from one owner to another. Not only is the process of marginalisation itself dynamic, but the concept has taken on different meanings in both the academic literature and the wider political world since it came into use about a decade ago.

2. Within the typology of regions developed in this paper those which are most susceptible to marginalisation can be expected to be found in the 'extensive farming' and 'small-scale farming' group. In both group off-farm activities make an important contribution to family incom.

3. Agricultural policy plays an important role in maintaining the viability of farming in regions which are susceptible for change. Direct subsidies may even exceed Family Farm Income in some Extensive Farming Regions in the European Union. This applies mainly to drystock farms in Wales, Scotland and Northern Ireland (United Kingdom), as well as in Alentejo-Algarve (France) and Corse (France).

These regions have a limited share of the EU 12's total output. Changes in support measures may therefore have a limited impact on total production in the European Union. Their share in UAA however is substantially higher.

4. Compensatory payments per Livestock Unit under the LFA Scheme are lowest in Spain (36 ECU) and highest in Luxembourg (113 ECU). The relative dependence on subsidies of LFA farms is rather high. Direct subsidies are highest on drystock farms within LFA.

REFERENCES

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Terluin I.J., Godeschalk, F.E., Von Meyer, H. and Strijker, D. (1993). The Agricultural Income Situation in Less Favoured Areas of the EC. European Commission, Luxembourg.

Whitby M.C. (Ed.) (1992). Land use change: the causes and consequences, Institute of Terrestrial Ecology symposium no. 27. HMSO, London.


1) Agricultural Economics Research Institute (LEI-DLO), P.O. Box 29703 , 2502 LS The Hague, the Netherlands

2) Institute for European Environmental Policy (IEEP), Dean Bradley House, 52 Horseferry Road, London SW1P 2AG, United Kingdom


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