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Economic prospect for semi-subsistence farm households in EU new Member States
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Economic prospect for semi-subsistence farm households in EU new Member States

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This report presents a study of the economic situation of semi-subsistence farm households (SFHs) in new Member States and of their prospects for development under the stimulus of various EU agricultural policy measures. The project was carried out by the Institute for Prospective Technological Studies (JRC-IPTS), and focuses on agricultural holdings of very small economic size that market only part of their farm output. The results are based on a survey of SFHs in Poland, Romania and Bulgaria conducted in 2007. The detailed survey questionnaire, administered by local experts, covered the full economic and socio-demographic situation of each farm household, its preferences and attitudes regarding various relevant non-economic issues, and its expectations about the future. A final sample of 489 SFHs, distributed across the three countries, forms the basis for the empirical analysis. The main objectives of the study are to describe SFHs according to their socio-economic characteristics, and to assess the impact of various EU rural development measures on their socio-economic sustainability. It assumes that SFHs act rationally within their constraints but that, in addition, their decisions are conditioned by socio-psychological aspects. A two-step cluster analysis identified four typical SFH profiles, namely rural non-farm oriented households, rural pensioners and deprived households, large-scale semi-subsistence farm households, and rural households with undeveloped potential. These household types are statistically and behaviourally distinct from each other, and are shown to respond differently to policy stimuli. The policy measures analysed, singly or in combination, using multiobjective linear programming are the single area payment scheme (SAPS), farm investment support, support for diversification into non-agricultural activities, early retirement support, and transitional semi-subsistence support. It is found that none of these policy measures improves the economic prospects of all types of SFH. Moreover, the ranking of policy measures according to their impact varies between SFH type, and to a lesser extent, across countries. In broad terms, it emerges that policies such as pension and social security schemes are likely to be more appropriate for improving the situation of the first two categories of SFH (rural, non-farm oriented households and rural pensioners), whereas the last two categories (larger, commercially-oriented households and households with undeveloped potential), can benefit from sectoral policies aimed at investment in farming and in off-farm diversification, respectively. The main policy implications are that a one-size-fits-all approach is inappropriate and that a judicious and flexible combination of sectoral and social policies is required. Horizontal policies to stimulate, for example, the provision of microcredit, the development of various types of human capital and cooperative activities would also have a role to play.
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ISSN 1018-5593
ISBN 978-92-79-16030-1
DOI 10.2791/43896
Katalognummer LF-NA-24418-EN-C
Papir
ISSN 1018-5593 ISBN 978-92-79-16030-1 DOI 10.2791/43896 Katalognummer LF-NA-24418-EN-C
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