This is key to boosting rural areas and making them more attractive,
along with robust CAP measures targeted at young farmers.
Cooperation and partnership between the European Union, national governments and civil society will be crucial for fostering the generational renewal of the farming population. It is essentially a matter of rethinking the whole strategy so that younger people are attracted to the farming profession, thus revitalising the rural world, concluded the European Economic and Social Committee (EESC) in its report.
EU agriculture is currently facing two serious problems: the decline in the farming population and the failure to foster generational renewal. According to Eurostat, in less than a decade the overall number of farmers in the EU has dropped by a quarter (from 14.5 million in 2005 to 10.7 million in 2013) and the number of young farmers by a third (from 3.3 million in 2005 to 2.3 million in 2013).
These numbers show that the measures taken by the European Union and the Member States have not been enough to generate the sustainability and long-term competitiveness of Europe's agriculture and the rural environment.
In order to frame proposals that would respond to the many challenges involved, the EESC conducted an ex-post qualitative analysis of the relevance, effectiveness and value added of measures in the 2014-2020 Common Agriculture Policy (CAP) that sought to promote generational renewal.
Piroska Kállay, rapporteur for the information report, stressed:
Generational renewal is a problem that goes far beyond a reduction in the average age of EU farmers. It is essentially a matter of rethinking the whole strategy so that younger people are attracted to the farming profession, thus revitalising the rural world.
John Bryan, co-rapporteur:
There is a need for greater coherence between CAP measures and national legal frameworks and taxation policies to facilitate the transfer of holdings and foster generational renewal.
According to the data collected, the biggest concerns related to generational renewal – and which are common to every EU country – are: farm income, bureaucracy, unfair competition (inability to compete with products from outside the EU), financing, access to land and access to methods of practical knowledge transfer, lack of basic services, including broadband, and social isolation:
Low farm income
In a recent opinion (July 2019) on the farming profession and the profitability challenge, the EESC called for more support to help Europe's farmers get a fair share of market profit. At national level, it urged that consideration be given to a reverse market negotiation approach, establishing value chains that aim to give farmers a monthly income of twice the minimum wage, thus making farming more attractive for future generations.
The installation aid for young famers is insufficient for an agricultural business start-up (and manifestly insufficient for new entrants that come from outside the sector)
The current CAP measures supporting young farmers and new entrants through the national reserve and the Young Farmers scheme are essential in any future reform of the CAP.
The EESC is also in favour of raising the ceiling for start-up aid for young farmers. However, before this start-up aid is granted, there needs to be in-depth advice on drawing up a realistic business plan and on planning activities.
Insufficient duration of the young farmers' top-up payment in CAP Pillar I, and of the structural investment aid in CAP Pillar II (both currently 5 years)
The EESC believes the length of the young farmers' payments under CAP Pillar I and II should be increased from 5 years to 7 years.
Farm transfers and inheritance laws (inadequate national legal frameworks associated with intergenerational transfers)
Member States should establish a specific framework for farm transfers and minimise the costs and taxation associated with the intergenerational transfer of farms.
Absence of early retirement support (included in the 2007-2013 CAP, but absent from the current 2014-2021 cycle)
The EESC recommends the option of a pre-retirement scheme in Member States as part of CAP Pillar II.
Difficult access to development opportunities to improve competitiveness (low-cost financing for post-installation aids)
As a CAP Pillar II measure, the provision of low-cost loans and finance for young farmers, involving minimum bureaucracy, should be a priority, as the various CAP measures need to be better integrated and implemented in a more coordinated way to support young farmers in the different stages of developing their holdings.
Access to training to develop entrepreneurial skills and to coordinated communication and guidance programmes
Education and communication tools should strengthen the identity of the countryside and of rural life. It is of the utmost importance to implement internship, apprenticeship and entrepreneurship development programmes, improve access to practical knowledge transfer methods and put in place career guidance, advice, presentation of best practices and exchange of experience.
For this reason, it is fundamental to address all these issues in the 2021-2027 CAP budget in order to meet the funding requirements for meaningful support for generational renewal. To this end, the EESC proposes that a minimum of 2% of the CAP budget (Pillars I and II) should be allocated to supporting young farmers.
Successful implementation of generational renewal is one of the most important economic challenges of our times, but also an opportunity. As Commissioner Hogan stated, it is about
empowering a new generation of highly qualified young farmers to bring the full benefits of technology to support sustainable farming practices in Europe.
The EESC report is based on consultations with civil society organisations (CSOs) and national authorities whose aim was to get an understanding of how they experienced and observed the impact of the CAP on generational renewal. Data was collected through fact-finding missions, a questionnaire and additional material gathered during those missions. The findings are presented and analysed in the technical appendix to the information report.
The CAP (Common Agricultural Policy) consists of two funds, also referred to as “pillars”: “Pillar I” refers to the EAGF (European Agricultural Guarantee Fund), providing direct payments to farmers, while “Pillar II” refers to the EAFRD (European Agricultural Fund for Rural Development), financing rural development programmes.
Young farmer (definition)
Under Pillar I: a person who is under 40 years old at the moment of submitting the application and is setting up for the first time in an agricultural holding as head of the holding, or has already set up such a holding in the last five years prior to application, as defined in Article 50(2) of Regulation (EU) 1307/2013.
Under Pillar 2: a person who is under 40 years old at the moment of submitting the application and is setting up for the first time in an agricultural holding as head of the holding and possesses adequate occupational skills and competence, as defined in Article 2(n) of Regulation (EU) No 1305/2013.