Farm incomes in the EU’s 15 oldest member states face a 3.5 per cent fall by 2020 according to the European Commission. A European Commission report, Prospects for agricultural markets and income 2011-2020, which makes estimates about the future of food production in the bloc, suggests that incomes will move towards a centre point as workers in newly joined states enjoy rises.

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The study reports that agricultural income across the EU 27 is currently roughly 25 per cent higher than it was in 2000. Further overall growth between 2011 and 2020 is expected to lead to a 9 per rise in incomes compared to the 2007-11 average. The depreciation in income in the EU 15 stands against a forecast rise of 35 per cent for the newest EU states, resulting in a convergence on the EU average.

The Commission says in its report that, “The assumed decline in agricultural labour remains an important factor behind the income prospects,” stating that this will add to farm business costs. The study claims a steady increase in subsidy payments for the 12 newest entrants will be the main reason behind the increased income.

The figures and analysis may prove worrying for the industry; in Australia the agriculture industry finds it difficult to recruit skilled staff, as the sector requires a similar skill set to the more lucrative mining sector.  A similar pattern may develop in the EU, as young people in the EU 15 continue to move into urban areas, feeling that wages in agriculture are exploitative, and the demographic of the farming industry continues to age.

The forecast also predicts drops in sheep, cow and goat farming, but 3.6 per cent rises in pig and poultry farming y 2020, leaving the EU as a net exporter of pig and poultry. Milk production is expected to grow by 7 per cent and cereal production is expected to fare well, with a 0.5 per cent increase in yields each year keeping prices firm.

Eurostat figures for 2011 show that overall income prices for agricultural workers in the EU rose 6.7 per cent, following a 13 per cent increase in 2010, thanks largely to increased production and better grain prices. However, agricultural income fell in eight states, including France, The Netherlands, Belgium and Spain.

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