In 2016, for every farm manager under 40 there were three farm managers over the age of 65 in the EU. The ageing of Europe’s farmers is one of the greatest challenges that rural areas are facing. The CAP’s impact on generational renewal is mostly positive, but remains limited notably in regions lacking basic infrastructure and services. The CAP on its own is not sufficient to address main entry barriers into farming, such as access to land and access to capital. The measures included in the CAP are supporting the economic sustainability of young farmers, but the full potential of such measures is not exploited. These are some key findings of the ‘Evaluation on the impact of the CAP on generational renewal, local development, and jobs in rural areas’ published today by the European Commission.
The evaluation is supported by an external study and examines the effectiveness, efficiency, relevance, coherence and EU added value of the policy measures of the two pillars of the CAP implemented between 2014 and 2020. The measures assessed in the evaluation are those most relevant to generational renewal: (i) direct payment support to young farmers; (ii) investment support; and (iii) business start-up aid (‘CAP generational renewal measures’).
The evaluation finds that the support provided by the ‘CAP generational renewal measures’ have a positive impact in the increase of the number of young farmers, although to a limited extent. This positive impact also depends on other factors. For instance, socio-cultural and wider economic incentives play a major role in deciding to get into farming or living in rural areas.
CAP generational renewal measures improve the performance of farm businesses, their resilience, and the secure transfer of farms from the older to the younger generation. However, these measures tend to increase the socio-economic sustainability of farm businesses after young farmers have set-up their business, rather than contributing to farm-succession. In addition, CAP generational renewal measures are not well adapted to outside of the-family farm transfers.
The support provided by the generational renewal measures helps new farmers with the general costs following the set-up of their farm and of the early-years investment support. However, on its own it is insufficient, to address main entry barriers into farming such as access to land and capital issues.
Although the training level of young farm managers under 35 has increased over time, access to knowledge and advice is still insufficient. In 2016, only 43% of young farm managers had more than practical experience, compared to 32% on average for all EU farmers. The analysis shows the benefits of providing more formal training and advice as a condition for accessing capital grants, start-up aid and/or young-farmer direct payment supplement.
Rural development support, in addition to other EU policies such as the regional and cohesion funds that promotes rural economic diversification, better services and infrastructure (including broadband), is vital to improving the broader economic climate, particularly in rural areas.
The delivery and impact of CAP generational renewal measures could be improved, if Member States develop integrated approaches, using in a coherent way multiple CAP and non-CAP instruments and broader legislative and fiscal provisions. The future CAP Strategic Plans will provide an adequate framework to go into this direction.
Background
The CAP provides a set of regulatory and financial instruments for the agricultural sector, some of which directly address generational renewal and development of rural areas. The creation of an obligatory supplement for young farmers within the direct payments provisions from 2015 confirmed a commitment to fostering generational renewal in agriculture.
Besides direct payment support, rural development programmes provide additional measures to help young farmers getting installed. This support can include advice or grants, loans and guarantees to help the development of rural businesses. The 2013 CAP reform introduced business start-up aid for young farmers, a 20% higher level of support for investments in physical assets and specific advice to farmers setting up for the first time.