Competition, Trends and Policy Issues
Edited by Peter Johnson
Chapter 2: Agriculture
Alan Matthews INTRODUCTION The agricultural industry uses the natural resources of the earth to produce crops and livestock as a source of both food and raw materials. The industry in Europe has been transformed in recent decades in response to changing consumer demands, the globalisation of markets and a steady stream of technological innovations. In the 1950s, around one-third of the labour force in the countries making up the European Union was engaged in agriculture and it contributed around 20 per cent to Europe’s GDP. By 1999, these proportions had fallen to 5 per cent and 2 per cent respectively, although generally agriculture remains more important in the Mediterranean region than in northern Europe (Table 2.1).1 Another feature of the data in Table 2.1 is that the shares of employment in agriculture are generally higher than the shares of agricultural GVA in percentage terms. The gap is particularly large in Finland (where agriculture accounts for 6 per cent of jobs and 1 per cent of GDP), Austria (6 per cent of jobs and 1 per cent of GDP) and Germany (3 per cent of jobs and 1 per cent of GDP). The ﬁgures are a ﬁrst indication that labour productivity and thus incomes in agriculture may tend to lag behind other sectors (a point we return to later in this chapter). The utilised agricultural area (UAA) in the EU-15 is 135 million ha, of which 43 per cent is accounted for by France and Spain. In terms of its...
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