Science - September 27, 2012

Upscaling leads to job creation

Some jobs are lost in agriculture but others are created. 'This insight is important for European policy.'

Mechanization in agriculture does not have to spell job losses.
Every year the number of jobs in Dutch agriculture goes down by 2 percent as a result of mechanization and upscaling. This statistic is well-known. What we did not know is that this 2 percent is the net total. Because it turns out that a full 8 percent of the jobs disappear every year but new jobs are created amounting to 6 percent. Wageningen economist Liesbeth Dries calculated this on the basis of data from between 1990 and 2005.
The picture is similar in other European countries. In Germany 10 percent of agricultural jobs are lost every year but new jobs are created amounting to 8 percent. And in southern European countries the agricultural job market is even more dynamic. In Greece, 15 percent of the jobs disappear but 11 percent are added; in Italy 20 percent of the jobs disappear but 13 percent are added. In Spain there was even a net increase in the number of jobs: a loss of 14 percent of the jobs was compensated by 17 percent new jobs, reports Dries in the journal Food Policy.
The broad trend is clear: modernization of agriculture, with extra input of capital and technology, does not necessarily take its toll in jobs, concludes Dries. She sees, for example, an increase in hired labour: employees who work for a farmer or horticulturalist. 'Upscaling is both a creator and a destroyer of jobs.'

Where is the evidence of that?
'In the period 1990-2005 there were two major revisions of European agricultural policy, in which market protection was wound down and farmers were made to compete more on the world market. The negative consequences of that liberalization are always spelled out in detail, but after both rounds of reform the number of new agricultural jobs increased more relative to the rate at which existing jobs were lost. There was more paid labour in agriculture because companies started to invest in growth.'

The European Commission was involved in this research too. Why does the EU want to know this?
'The EU is afraid of rural depopulation and therefore wants more insight into the development of job opportunities in agriculture. The annual drop in job opportunities is nothing new. What this research shows is that behind that general trend there is a dynamic process of creation and destruction of jobs. That insight is important for European policy because you need a different policy for job creation than you need for coping with job losses.'

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