Agricultural policies and support

The role of agriculture and farm household diversification in the rural economy

 

The role of farm households in the rural economy of OECD countries is complex and multi-faceted. While on average the share of agriculture in rural employment and GDP is low and decreasing, agriculture is a large land user and plays an important role in many of the environmental and other land use issues that arise in rural areas.

Farm households provide agricultural and related products and services, participate in local labour markets, use local services and purchase and consume local products. A significant share of the income of farm households comes from non-agricultural sources which means that for many farm households a vibrant, diversified rural economy is crucial to survival on the farm. Rural and farm policy, to be effective, has to reflect these realities.

 

These are the findings and recommendations of a recent OECD report, The Role of Agriculture and Farm Household Diversification in the Rural Economy: Evidence and Initial Policy Implications, which draws on several sources of information including OECD and EU regional databases; thirteen country reviews (see below); and responses to a questionnaire on diversification.

 

The role of agriculture and farm household diversification in the rural economy of: