Rural Diversification and Job Creation in the EU

With the falling agricultural labor needs, economic diversification by farm and rural businesses — sometimes involving pluriactivity by farm household members — offers promise of alternative job creation to maintain populations and incomes in rural areas. In 2013 (the latest available data year), only 5.2% of all EU farms were diversified in terms of having income from a farm-based “other gainful activity” (OGA), such as agri-tourism, food processing or forestry, but those holdings generated 18.9% of all EU agricultural output. Farm diversification levels were low in, e.g. Italy, Poland, Bulgaria and Romania (all with many small farms), but high (over 30% by farm number) in Denmark, Austria, Germany, Finland and Sweden. In 2008, more than 20% of farms with more than 100 hectares (ha) had developed a diversification activity, against 10% of farms with less than 10 ha. OGAs were more common on livestock farms than on cropping farms, and more common in regions around cities, or with visitor attractions. Policy efforts to encourage diversification have been frequent, but not always backed with significant public expenditure compared to direct farm income support, even though the latter does little to stimulate new enterprises.