Agricultural planning for regional balance

The reduction of employment in agriculture and forestry has led to regional economic imbalances, especially in Northern Sweden. The problems are typically: low rate of employment, distortion of the age structure of the population, contraction of the population basis for local services and the demand for governmental subsidies. In a multidisciplinary research project we have analysed different ways of integrating agricultural and regional policy. A systems dynamics model was used to simulate agricultural structure development in one municipality. Some important regional consequences were also computed. The results show that the reduction of employment and population on farms is likely to continue, but the rate of contraction could be slowed down by means of coordinated policy measures. Cost-benefit-type analyses indicate small differences in socio-economic terms between different agricultural structure alternatives, at least in a medium range perspective. A small scale farm structure may require more subsidies, than a rationalisation alternative. Finally, we describe a planning method for calculating where (in what sub-district of a region), when (during the period 1975-2000) and to which sector of the economy (agriculture, forestry, industry, service, etc.) financial support would lead to the achievement of certain criteria of regional balance at the lowest cost. The methods and results described are relevant to planning in sparsely populated areas in northern climatic zones, but may be of general interest when discussing the role of agriculture in economic development.