Farming in Western Europe

In his essay on resource relationships in the countries of Western Europe (i.e., non-Communist Europe) P. Lamartine Yates comments on some of the problems engendered by the more efficient agricultural practices that have increased production so remarkably in the last fifteen years. Mr. Yates is regional representative for Europe (Geneva) for the Food and Agriculture Organization of the United Nations.

At the core of the farm problem in Western Europe there is an economic and social tangle: governments are pledged to take care of the income of what they call a reasonably efficient farmer. They have used their extension services to make sure that almost all farmers are reasonably efficient; they have used price guarantees and price supports to provide the necessary level of income; yet, already to some extent now and certainly still more in the years ahead, they will be facing a double dilemma. As gross natural product increases so also does the public concept of what is an acceptable level of income and, if incomes are rising in other sectors, farm incomes must rise pari passu. Unless agricultural prices are to rise continuously, which governments are naturally reluctant to permit, then farmers can increase their incomes only by reducing their inputs (for which the scope is strictly limited unless, and until, farms become larger) or by increasing their output. In practice they all strive to increase output and are so remarkably successful that they are beginning to embarrass their governments with unmarketable surpluses. But unless the number of farmers, and probably also sooner or later the amount of farmland, can be reduced, the output will continue to grow larger and larger as farmers chase the objective of higher incomes.

The way out of the tangle and the way to achieve a more rational utilization of resources must be sought in two directions simultaneously, the first having as its objective the slimming down of the agricultural sector to a size commensurate with present-day requirements, and the second being the working out of policies designed to safeguard the income and welfare of the redundant farm labor force.

Various techniques are already being employed, for example: programs to affect the consolidation of fragmented farms; revision of inheritance laws; programs to facilitate the amalgamation of farms, for instance by offering credit to farmers who wish to buy additional land or by the government acquiring land from retiring smallholders and making it available for the enlargement of neighboring farms. In Sweden, for example, programs along these lines have been initiated, the objective being to create farms of about 50 acres as being a minimum viable unit.

The creation of physically larger units will not in itself be sufficient to make the family farm an economic proposition ... even with better education, the typical family farmer can hardly be expected to have a thorough knowledge of the latest techniques in each of the various departments of his business ... Not only through co-operatives in their traditional form but also through new forms of marketing arrangements, farmers attempt to improve efficiency by shortening the line of distribution between themselves and the consumer. An example is the so-called "vertical integration," notably in the broiler industry, where an industrial firm will provide the farmer with the capital to build poultry houses and will sell him feeding stuffs and give him technical advice while guaranteeing to buy the end product at fixed prices. In Germany, government subsidies are given for the establishment of centralized machinery stations which supply farm equipment on loan to co-operating farmers. In the Netherlands, in some districts farm workers are hired by a group of farmers acting jointly, which permits a fuller utilization of the hired men. In Denmark and Sweden, co-operative milk parlors exist in which a group of small farmers combine to keep their cows all together at one place where they are fed and milked more efficiently than they could be on the individual farms.

The other direction in which governments can help is by granting assistance to farmers who wish either to give up farming or to transfer to another occupation. In several countries the early retirement of elderly farmers is encouraged by special schemes of old-age pensions ... In the Federal Republic of Germany such a pension scheme has been introduced and has greatly increased the number of farms changing hands.

Governments can facilitate a more rapid movement of labor out of agriculture ... by increasing the training facilities in nonagricultural occupations for which otherwise farm workers are poorly qualified; also by providing information in rural areas of job opportunities in urban areas.

Finally, it has to be recognized that ... there will remain for a number of years a great number of farm families which cannot benefit from such programs. It is these which justifiably qualify for measures of income support designed to maintain their living standard until either they can obtain a satisfactory farm or they can be transferred to another form of employment. In Denmark and Sweden the governments operate systems of cash payments to small-scale farmers which are entirely divorced from the volume of their output. In several countries governments give grants to farmers in remote regions in order to discourage depopulation as, for example, in the mountain regions of Switzerland. In some quarters there is discussion of an acreage subsidy which would be substantial for the first few acres and diminish rapidly as the size of farm increases.

All these attempts have in common the principle of divorcing income support from price support so that prices can be used for their traditional purpose of adjusting supply to the requirements of the market.