EU Farming Sector: An Overview

The EU farming sector is undergoing a significant transformation, characterized by a trend towards fewer but larger farms. While the total agricultural land in the EU remained relatively stable between 2005 and 2020, increasing by a mere 0.3%, the number of farms experienced a substantial decline, dropping by 4.6 million to reach 9.1 million in 2020. This trend has resulted in a concentration of land ownership, with farms larger than 100 hectares managing 52% of the EU's agricultural land. These large farms, representing only 4% of the total farm population, dwarf the small farms (below 5 hectares) which utilize only around 6% of the total land.

Regional Variations in Farm Size

However, this trend is not uniform across the EU. Countries like Czechia and Slovakia exhibit a high concentration of land under large farms, with 86% and 89% of their agricultural land respectively managed by farms exceeding 100 hectares. In contrast, Romania stands out with a significant share of agricultural land (23%) under the management of small farms, accounting for 89% of its farm population.

Specialization and Geographic Concentration

In terms of specialization, crop farming dominates the EU farm landscape, accounting for 58% of all farms. Livestock farming follows closely with 22% of the total, while mixed farms constitute 19%. When analyzing the geographical concentration of production for specific crops, certain crops demonstrate a high degree of concentration due to specific climatic conditions. For example, nearly 99% of the EU's olive oil production is concentrated in just four countries, while over 85% of its wine production is located in five countries.

The concentration is less pronounced for other product categories. For instance, four or five main EU producing countries account for 60% of milk and meat (excluding sheep and goat meat) production and 75% of grain production.

Family Farms and Demographics

The management of farms in the EU is largely dominated by family farms, accounting for over 93% of all farms. These family farms are generally smaller than non-family farms, averaging around 11 hectares compared to 102 hectares for non-family farms. Despite this, young farmers (under 35) remain a scarce demographic, representing only 6.5% of all farmers in 2020. Furthermore, farm management positions are primarily held by men, although the proportion of female farmers has been steadily increasing, rising from 26% in 2005 to 32% in 2020.

Productivity Growth and Future Uncertainties

Alongside the trend of increasing farm sizes, productivity has also shown improvement. This growth in productivity, driven by economies of scale, has also contributed to the resilience and investment capacity of farms. Historically, a significant portion of productivity growth in agriculture, measured through yields, was attributed to the convergence of yields between countries that joined the EU after 2004 and other EU member states. Between 2013 and 2023, the gap in barley yields narrowed most significantly, with the yields of countries that joined after 2004 reaching 92% of the yields of other EU countries. This trend was also observed for soft wheat and rapeseed, although less pronounced for sugar beet and maize. Similarly, the gap in milk yields also narrowed, reaching 70%.

As these structural changes are expected to slow down in the coming years, the overall productivity growth of EU agriculture may also experience a deceleration, exacerbated by growing uncertainties related to climate change.