Agricultural Development in the European Union: Drivers, Challenges and Perspectives

The agricultural and food sector of the EU has shown great resilience and adaptability over the last decades to a changing technological, economic and social environment. This adjustment took place within a supportive policy setting which contributed to alter the pace of this long-term process. Whereas the agri-food sector still represents today an important component of the EU economy, it has also shown critical importance for the environment and landscape in contributing over the centuries to creating and maintaining a variety of valuable semi-natural habitats and in continuing today to shape the majority of EU’s landscapes. Although a growing number of rural areas are likely to become increasingly driven by factors outside agriculture, many rural areas (in particular, those which are depopulated or dependent on farming) are expected to face particular challenges as regards economic and social sustainability. The outlook for EU agricultural markets over the next years appears fairly favourable, most notably for the arable crops and dairy sectors. However, these projections are particularly sensitive to critical assumptions regarding the economic environment, policy developments (notably for trade and biofuels) and remain subject to some uncertainties (e.g., potential impact of climate change). These positive market perspectives together with future demographic trends, macro-economic patterns and environmental conditions will have important implications for the medium-term prospects of EU rural areas.