Factors contributing to the resilience of subsistence and semi-subsistence farms: evidence from Greece Pavlos Karanikolas Assistant Professor AUA, Dept

Factors contributing to the resilience of subsistence and semi-subsistence farms:

evidence from Greece

Pavlos KaranikolasAssistant ProfessorAUA, Dept. of Agr. Economics & Rural Development

May 4-8, 2014, Montpellier, France

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝAGRICULTURAL UNΙVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

Presentation Outline

1. Informal food networks in Greece

2. The incidence of subsistence (SFs) and semi-subsistence farms (SSFs) in Greece

3. Farm-level data from a local field survey


1. Informal food networks in Greece


Type of Network (An initial mapping) Broader Athens

The rest of Greece

1 Organized Direct Sales 39 76

2 Food Networks Without intermediaries 64 101

3 Urban vegetable gardens 63 84

4 Social Groceries 66 102

5 Agricultural Cooperatives [new type co-ops]

34

6 Recycling – Re-use of Food 9 4

Source: www.enallaktikos.gr, April 2014

In response to the crisis, since 2011:

2. How many Subsistence & Semi-Subsistence farms in Greece?


Farm Structure, 2010

Source: Eurostat, Farm Structure Survey, 2010

Size Class (Ha)

Farms

Number %

0 6.180 0,9%1-1,9 367.160 50,8%

2,1-4,9 183.820 25,4%

5,0-9,9 87.770 12,1%10,0-19,9 45.580 6,3%20,0-29,9 14.670 2,0%30,0-49,9 10.850 1,5%50,0-99,9 5.480 0,8%100,0+ 1.500 0,2%

Total 723.010 100,0%

77% of farms, under 5 Ha

Average Farm Size: 4,8 Ha

Economic Size: 33% of farms with Standard Output less than 2000 €

In 16,4% of farms:More than half of production is self-consumed by the holder


Year 1 2 3 4 5 6Farm

HouseholdsNon-Farm

Households with some income +

subsidies from agriculture

Non-Farm Households with some subsidies

from agriculture

Retired Farm

Households

Non-Farm Households

with agr. production

for self-consumption

Non-Farm Households

Total

Some agricultural production for self-consumption

2009154.331

3,8%

299.196

7,3%

88.228

2,1%

230.709

5,6%

1.150.227

28,0%

2.191.460

53,3%

4.114.151

100%

2012166.947

4,0%

236.946

5,7%

60.098

1,4%

251.604

6,0%

1.178.001

28,3%

2.269.640

54,5%

4.163.236

100%

2009-2012+12.616 -62.250 -28.130 20.895 +27.774 78.180 49.085

A detailed typology of All Greek Households:

Source: Household Budget Surveys, Elaborated Data

Poverty Rates (% in each category)



Farm Households Non-Farm House-holds with some

income + subsidies from agriculture


from agriculture

Retired Farm Households

Non-Farm Households with agr. production

for self-consump-tion

Non-Farm Households

Total0%

10%

20%

30%

40%

50%

60%

70%

80%

18% 20%

28%

70%

16% 16%20%

30%

19%

34%

55%

19% 18%21%

2009 2012

Agricultural Self-Consumption: mitigates poverty rates



Farm Households Non-Farm House-holds with some

income + subsidies from agriculture


from agriculture

Retired Farm Households

Non-Farm House-holds with agr.

production for self-consumption

Non-Farm Households

Total0%

10%

20%

30%

40%

50%

60%

30%

19%

34%

55%

19% 18%21%

24%

11%

17%

42%

11%15%

Without agricultural self-consumptionWith agricultural self-consumption

2012, Poverty Rates

3. A Field Survey in Municipality of Ancient Epidaurus


• Detailed farm-level data in 2006

• historical data (1950’s-2006)

• A follow-up survey in 2011


• Population: 1733 inhabitants

• Average farm size: 2,4 ha

• Total number of farms/farm households: 410

• Our representative sample:

70 farms

The local agro-system and rural economy


Dimensions

1950’s-1960’s 1970’s-2000’s

Technical

• Inadequate Infrastructures • Traditional farming techniques and methods of production

• Improved infrastructures• Farm modernization • The productive system has changed: Tree Cultivations for: Olive Oil [dry & irrigated], Oranges, Mandarins Small vegetable gardens for self- consumption

Social • no co-operation among farmers

• no co-operation among farmers

Economic

• Farms producing mainly olive oil, vegetables and some animal products for self-consumption• small quantities of oranges for sale • fishing

• After the initiation of the Annual Cultural Festival at the Ancient Theatre, the area became a popular tourist destination• the driving force for the local economy is services for tourists • the local farm products are sold:

in Athens, directly from the famers in Athens and elsewhere, through informal family

networks through commercial networks


How many SFs and SSFs in this area?

1. All farms have a market participation rate >= 50% [None SF or SSF]

2. Four farms (5,7%) have an economic size < 1 ESU

3. Sixty-five farms (93%) with Utilized Agr. Area =< 5 ha,

therefore we use the 3rd criterion to distinguish

semi-subsistence farms

Let’s focus on these 65 ‘semi-subsistence’ farms:


These Farms/Farm Households follow various Livelihood Strategies:

Changes in UAA over time (ha) [1950's -

2006]

Number of Farms

Hired Labour/ Total Labour

Direct Marketing of farm products

(hours per farm per year)

Diversification Off-farm employment of household members

(hours per household per year)

Enlargement 10 56% 471 1 farm converted to organic in 2000 3084

Contraction 12 42% 5672 farms converted to organic (2000, 2002) 1 with hotel (in 1975) 1 with tavern (in 2000)

3029

No change 43 56% 833 with Rooms to Rent (1990, 1996, 2001) 2 with Taverns (1995, 1999) 2 with Hotels (1982, 1992) 1 with Restaurant (1975)

4438

………………


A specific structure of the cost of production


0 1000 2000 3000 4000 5000 6000 7000 8000 90000

2

4

6

8

10

12

14

16

18

Olive Oil, Dry Cultivation,Average Total Cost (€/Kg)

Eu-ros/Kg

Production per Farm (Kg)


0 1000 2000 3000 4000 5000 6000 7000 8000 9000 100000

1

2

3

4

5

6

7

8

9

10

Olive Oil, Irrigated Cultivation,Average Total Cost (€/Kg)

Euros/Kg



Euros/Kg


0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,0000.0

0.2

0.4

0.6

0.8

1.0

1.2

Oranges,Average Total Cost (€/Kg)


Euros/Kg


0 5,000 10,000 15,000 20,000 25,0000.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Mandarines,Average Total Cost (€/Kg)


0 1000 2000 3000 4000 5000 6000 7000 8000 90000

2

4

6

8

10

12

14

16

18

Olive Oil, Dry Cultivation,Average Total Cost (€/Kg)

Euros/Kg


Therefore, beyond a minimum level of production:

1. Costs remain essentially constant

2. Strong indications for constant returns to scale

3. No substantial differences in efficiency of farms

Farm Economic Sustainability


In the short-run: all farms are economically sustainable:

(*) those who with their revenue cover their variable costs

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.50%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Variable Cost/Revenue

Utilized Agricultural Area (Ha)

short-term economically sustainable farms*


long-term economically sustainable farms*

In the long run:• UAA up to 2,3 ha: two-thirds of farms are economically sustainable• UAA>2,3 ha: all farms are economically sustainable

(*) those who with their revenue cover their total [variable+fixed] costs

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.50%

100%

200%

300%

400%

500%

600%

700%

800%

Total Cost/Revenue

Utilized Agricultural Area (Ha)

On-Farm Labour


0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.800%

100%

200%

300%

400%

500%

600%

700%

800%

Total Cost/Revenue

On-Farm Employment (Annual Work Units)

Only 8 out of 65 farms (12%) employ >1 Annual Work Units

………………


See also: EU-RD Report 2013, pp. 119-121

Household’sStandard of Living

Equivalent Household Income, in comparison to:

1. Average Equivalent Household Income of Peloponnesus Region

2. Poverty Line

Percentage of Households in each category


Average Equivalent Household Income of Peloponnesus Region

1,5%

15,4%

83,1%

Poverty Line

Some persistent problems

• A very low degree of co-operation among farmers

• An agro-tourist festival in the area, since 1998, which has never been used from the locals for the promotion of their products

• Change in land use, from fertile cultivated land, to land for construction


Resilience to the current crisis (I):

2006-2011: Although product prices have fallen, farms remain economically sustainable and households retain medium and high income,

mainly due to: • Further farm expansion and improved management (e.g.

increased yields per ha), combined with– conversion to organic farming, or– farm succession

• Increase of direct sales to Athens’ open-air markets (29% of farms in 2006, 38% in 2011)

• Unabated demand for tourist services


Resilience to the current crisis (II):

farm expansion: before the advent of the crisis (in 2006-2009).Now, the farmers have not any other potential for new farm investments


Conclusions

Increased stability of Farms/Farm Households and potential to recover after external shocks, due to:

1. A farm economy well integrated with the broader regional and local economy

2. Diverse viable livelihood strategies pursued from Farm Households

3. A concrete cost structure for farm products, indicating constant returns to scale


Documents

Factors contributing to the resilience of subsistence and semi-subsistence farms: evidence from Greece Pavlos Karanikolas Assistant Professor AUA, Dept