12/06/2003 - The economic and social upheavals caused by technology-driven changes to the agro-food industy and by the exodus of labour from the countryside have created enormous challenges for European policy makers seeking to develop vibrant rural environments. Providing alternative employment opportunities in rural areas requires the careful balancing of a range of macro-economic, social, regional, and sectoral policies. All these issues were debated at a seminar on agriculture and rural development in the Baltic countries organised by the OECD and the Estonian Ministry of Agriculture in
Opened by Tiit Tammsaar, Estonian Minister of Agriculture and Ken Ash, the OECD’s Deputy Director for Food, Agriculture and Fisheries, the Seminar on Agriculture and Rural Incomes, Labour Mobility and Rural Development Policies in Estonia Latvia and Lithuania brought together government officials, industry representatives, and a range of international policy experts.
The main findings to come out of the three-day seminar were as follows:
Background: Issues at the seminar
Seminar participants discussed trends in farm incomes and the growing contribution of earnings from non-farming activities. They noted that measuring farm household incomes is becoming increasingly difficult as farms have become more heterogeneous, while comparable data remains scarce and differences in the composition of households significant. These difficulties make cross- country comparisons problematic.
In the Baltic region, farm household income fell sharply during the transition period. However, in recent years average farm household income has risen in
The continuing outflow of labour from agriculture is causing high rural unemployment. With stronger economic growth and investment in the Baltic region, employment opportunities are likely to increase primarily in urban areas with positive spillover effects on rural areas. But, several factors may continue to inhibit labour mobility across the region.
Because of their generally low level of education many of those leaving agriculture have limited employment opportunities in the general labour market. In all three countries rural unemployment rates are above 50% in certain areas. Of particular concern is the rapid rise in joblessness among young people. There is, however, an increasing focus on developing a more coherent policy approach to include agriculture, rural development, education and training in order to more fully integrate the rural unemployed (unskilled, young and long term unemployed) into the labour market.
An array of short-term measures is being implemented in the Baltic countries to overcome the social effects of high unemployment and poverty. In the longer term, the solution to these problems depends on resolving the underlying causes such as the lack of infrastructure, the absence of market institutions, the need for access to information, and concerns regarding the distribution of incomes in rural areas. A combination of dynamic local initiative and top-down approaches are important elements in designing rural strategies that reduce income and welfare disparities both between the countryside and the city and within rural areas.
Traditional rural development measures in the European Union have tended to centre on agriculture and to concentrate on income redistribution and project support. However, the situation is different in the Baltic countries where the standard of living is lower and the range of activities in rural areas is less diverse. Moreover, there are also wide differences between
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