Eur-Agri-SSP 4: Agriculture on unequal paths

The content of this page is drawn from Supplementary Material I of:

Mitter, H., Techen, A.-K., Sinabell, F., Helming, K., Schmid, E., Bodirsky, B.L., Holman, I., Kok, K., Lehtonen, H., Leip, A., Le Mouël, C., Mathijs, E., Mehdi, B., Mittenzwei, K., Mora, O., Øistad, K., Øygarden, L., Priess, J.A., Reidsma, P., Schaldach, R., Schönhart, M., 2020. Shared Socio-economic Pathways for European agriculture and food systems: The Eur-Agri-SSPs. Global Environmental Change 65, 102159.

1         Population and urbanization: Territorial fragmentation

The population size of Europe stagnates because of decreasing fertility and stable international immigration. Europe as a whole, as well as national societies, are characterized by increasing social disparities, social instabilities and social tensions resulting in territorial fragmentation with marked inequalities between and within rural and urban areas. The quality of infrastructure in remote rural areas is deteriorating and people moving to urban areas expect better access to social and technical infrastructure. Social segregation increases and opportunities, e.g., in terms of education, are unequal. The linkages between rural and urban residents are getting weaker, and the majority of consumers are increasingly disconnected from agricultural production and rural life. Inequalities in education and income also prevail in the agricultural sector, contributing to a diversity in the farming population in terms of age, education level, innovative capacity and migration background.

2         Economy: A business oriented elite dominates agricultural supply chains

On average, the European economy grows moderately with substantial differences between countries. International trade restrictions are eased such that a small group of innovative companies in a few countries, which successfully engage in lobbying activities, benefit from globally connected markets. With respect to the agricultural sector, a small number of global agri-business players are becoming increasingly important and dominate agricultural supply chains globally and in Europe. Competition between individual enterprises in a sector becomes less important but takes place mainly between supply chains. Only a limited number of multi-national companies offer agricultural inputs and technologies at increasing price levels. Local agro-food initiatives are rare and specialize in the supply of luxury food items customized for the wealthy elite.

Demand for European agro-food products is diverse with contrasting diets coexisting. While high income groups prefer local and exotic artisanal products (including plant-based meat substitutes), the majority of the population prefer mass-produced and simple food at low cost. Food waste in low-income households declines due to economic pressures, whereas food waste remains high in high-income households. Demand for non-food agricultural commodities remains constant. The wealthy upper class maintain non-permanent residences in scenic hotspots and demand regulation, maintenance and cultural services from the agricultural sector in these locations.

Relative to the general price level, prices for agricultural inputs are increasing because of rising market concentration in the sector and an increase in the level and volatility of the crude oil price. The pressure on natural resources increases. Environmental problems originate from careless use and missing environmental policies, which is in accordance with a general decrease in environmental awareness. Only in the immediate neighborhood of the upper class is environmental quality high and the use of natural resources regulated. Increased structural change towards large-scale industrial farming contributes to technology development and diffusion with positive effects on land and labor productivity. The skills required for agricultural work are diverse, e.g., high-skilled workers in order to foster technology penetration and entrepreneurial innovation, as well as unskilled workers for traditional manual work. Labor supply for agriculture remains stable. It benefits from diverse job profiles but suffers from the widening rural-urban divide. Engagement in agriculture is particularly attractive for those who benefit from infrastructure development and emerging technologies, i.e., a rather small group of wealthy landowners, whereas a significant share of agricultural workers is only moderately paid.

3         Policies and institutions: A business oriented elite dominates European institutions and sets the policy agenda

European institutions benefit from more effective organization and improved connections to organizations and institutions that act at a global level. Europe strongly influences global negotiations. However, European institutions mostly represent a powerful business-oriented elite that promote the vision of market integration, whereas the interests of a large proportion of society are mostly ignored. Accordingly, the European institutions lack support from the general public. This development is also reflected in the dwindling importance of cohesion and social equity on the European policy agenda.

European policies favor rapid technology development, international trade of a small number of globally connected companies, and appropriate solutions for environmental problems in areas of particular, mostly private, interest for a privileged group. Concentration of political power also enables foreign direct investments and land grabbing in less developed countries.

With respect to European agricultural policy, interest in agricultural sector regulation stagnates and the reduced amounts of public payments tend to favor large companies and industrialized farms, which have the capacity to organize themselves. Public payments for technology development and testing on pilot farms, as well as investment subsidies for emerging technologies, are becoming more important, whereas national payments for rural development, such as agri-environmental payments and support for less developed areas, are phased out. This means that mostly large-scale land owners benefit from direct payments whereas investment support and payments for technology diffusion are equally important for large companies and local agro-food initiatives. Via their strong position in European institutions, the political and business elite also pushes the approval of new technologies as well as agricultural production, trade and environmental standards. Similar to the focus of European policies, decisions aim to support economic growth and professional advancement of a small but powerful group of globally acting agricultural companies. Furthermore, the protection and enforcement of intellectual property rights is strengthened. Global environmental issues are only tackled if the global elite has an interest.

4         Technology: Rapid technology development focusing on production and energy efficiency

Initiatives by experienced players in the private sector are supported by public funding in order to stimulate rapid development of digital farm management systems, crop and livestock production technology, machinery and vehicle technology and marketing and advertising technology. The diffusion of energy efficient and renewable energy technologies benefits from rising crude oil prices and high uncertainties in the fossil fuel market resulting from a prevailing oligopolistic market structure. Technology diffusion in European agriculture is driven by continuing structural change and fostered by public payments resulting in productivity increases. It is, however, limited by growing inequalities between and across countries, which is not only apparent in the agricultural sector but also in society.

5         Environment and natural resources: Environmental awareness limited to the neighborhood of the wealthy upper class

Private and public investments help to maintain a clean environment in very selected areas, where environmental standards are increasing and agricultural land use is regulated. These areas experience decreasing pressure on biodiversity and ecological infrastructure and environmentalism becomes effective through formally protected areas such as nature or wildlife reserves. By contrast, natural resources are largely overused in other areas. Invasive pests, weeds and diseases pose increasing challenges to the agricultural sector because of globally connected markets, generally decreasing environmental standards combined with decreasing public payments for environmental services, and reduced cooperation for developing effective control strategies.