Aspects of multi-functional linkages in rural areas
Michael Gregory
European Network for Rural Development
Objective of this presentation
© ENRD Contact Point
To describe the strength of economic linkages between agriculture and
the rest of the rural economy in selected NUTS 3 regions throughout the
EU
…and illustrate that the provision of
‘public goods’ can be a significant part
of the ‘multifunctionality’ mix of farms
and rural enterprises.
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Basis of the analysis presented
• The EN RD Thematic Working Group No.2 studying ‘Linkages between
agriculture and the wider rural economy’
• Quantitative and qualitative analysis was conducted in 18 NUTS 3 rural
areas throughout the EU and followed-up by further study in selected
regions and a wide-ranging exercise to identify and assess specific
project interventions.
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Choice of NUTS3 Regions:
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Clustering of regions:
• Non-dynamic areas: ▲
• Agriculturally-dependent dynamic areas: ▲
• Diversified dynamic areas: ▲
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Low backward linkages:
Major imported Inputs
Seed
Fertilizer
Plant
Protection
Major Products
Backward Linkage
1.273
Indirect effects
0.242
Most Important
Backward Relation
Wheat
Trade
(0.064)
Backward Dispersion
0.667
Machinery
Backward
Interconnectedness
2.583
Irrigation
Output Elasticity
0.092
Income Elasticity
0.111
Cotton
Milk
Meat
Pine Wood
Locally Produced Inputs
Fish
Farming
Feedstuff
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High forward linkages:
Direct links
Indirect links
Total forward: 2.589
Flour Mills
Indirect effects
1.533
Forward Food
Industry
0.272
Ginners
Forward Trade
0.201
Milk and Dairy
Forward Hotels &
Catering
0.118
Bakeries Pasta
Trade
Textiles Trade
Milk Cheese
Tourism Trade
Meat and Meat Food Industry
Products
Tourism Trade
Forward Dispersion 1.247
Wood
Wood Industry
Construction
Furniture Trade
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Initial Input/Output Analysis results:
Comparative analysis between clusters reveals:
•
•
•
•
•
Backward linkages are generally quite low in all 3 clusters
Forward linkages are generally strong in all 3 clusters
Trade, Hotels & Catering appear to have high backward &
forward links with the rest of the economy, in all 3 clusters
Diversification appears to be higher in Diversified Dynamic
areas than other clusters
Accessibility + competitive agri-food chain critical factors
underpinning agricultural links with the rural economy
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Diversification trends:
• Tends to occur/have greater chances in areas
where there are ‘real’ alternatives
• Where diversification policies have been
aggressively promoted they have tended to
result in shorter term, less sustainable outcomes
• Where agriculture is a significant sector, it tends
to offer the best opportunities for specialisation
and investment
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Project level characteristics - general
• Evidence in all the selected regions of a wide range of
EAFRD
supported
projects
which
demonstrate
multifunctionality (both on and off farm income
generation)
• Local people / entrepreneurial spirit are key main drivers
in building linkages
• High impact of local institutional arrangements
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Project level characteristics – investments which
additionally generate ‘public goods’
In the EAFRD supported projects identified, analysed and found to be
generating positive outcomes:
• Over 20% generate additional environmental and/or social public
goods
• These public goods benefits are often identified a priori – but may
be more substantial than expected.
• Additional non-planned environmental and/or social benefits may
also be generated.
• These extra benefits would not have been materialized without
policy intervention.
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Possible RD policy implications to consider
include:
•
Investments (supported by RD funds) propensity to create
successful - economically positive - linkages would be higher with a
more cross-cutting and integrated programming approach
•
For the current programming period – possibility for improved
selection criteria and technical and marketing support at the project
level
•
For the future – [more] explicit recognition of the multiplier effect
of agriculture - ‘embedding’ linkages between agriculture and
other sectors of the economy in the programming framework –
more focussed territorial targeting
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For more information please visit EN RD website:
• TWG1: http://enrd.ec.europa.eu/thematicinitiatives/twg1/en/twg1_home_en.cfm
• TWG2: http://enrd.ec.europa.eu/thematicinitiatives/twg2/en/twg2_home_en.cfm
• TWG3: http://enrd.ec.europa.eu/thematicinitiatives/twg3/en/twg3_home_en.cfm
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Selected case study examples –
illustrating the provision ‘public
goods’ (both environmental and
social) as part of the multifunctionality
mix
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Adding value to agricultural and forestry products
“La ferme du Hourcot”, Ornezan, Gers (FR)
Establishment of cheese factory
within a farm producing cereals,
milk and cheese.
Main goal : to produce highquality cheese and take control
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of the whole production chain,
including direct sales to local
consumers.
Environmental sustainability is a major focus of the operation of the farm and is
significantly “valued in the market” (photovoltaic panels, homeopathy products used
to treat animals, no-tillage farming techniques)
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“La ferme du Hourcot”, Ornezan, Gers (FR)
Public Goods provided
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Rural vitality: new jobs (plus farm succession)
Air quality,
animal welfare,
soil functionality,
biodiversity.
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Adding value to agricultural and forestry products
“Dairy plant Ema Mejeri”, Kalmar Ian (SE)
• Establishment of a local dairy plant and production and distribution of
milk and dairy products to a local market
• Main goal was to offer owners (two farmers implementing the project)
an alternative market, through the control of the whole production
chain and the sales of high quality dairy products to local consumers.
• Environmental sustainability is promoted through a reduction of
transportation effort
• Rural vitality: very significant impacts; creation of 20 new jobs;
additional farmers provide milk to the firm (spillover); higher local
incomes; rural economic diversification; mobilization of local actors.
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Diversification into non-agricultural activities
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“Maison de l’ail”, Saint Clar, Gers (FR)
• Establishment of a garlic
museum; tourist facility
attracting customers (direct
sales).
• Main goal was to create event
and tourism activities out of their
farm product and increase their
income.
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“Maison de l’ail”, Saint Clar, Gers (FR)
Public Goods provided
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© ENRD Contact Point
© ENRD Contact Point
Rural vitality: maintenance of jobs;
higher income; rural identity (spillover to
other local farms and sectors - synergy)
Environmental sustainability:
farmland is kept as a natural
prairie; very low use of pesticides.
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Support for business creation and development
© Erdäpfelregion Lainsitztal
“Sales promotion and awareness of
potatoes”, Waldviertel (AT)
• Establishment of a network which
aims at the strengthening of
cooperation between potato
producers, restaurants and
accommodation firms.
• Main goals were to: develop highquality organic products and utilize
modern marketing strategies in order
to link the local area image with these
products.
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“Sales promotion and awareness of potatoes”, Waldviertel (AT)
•
Environmental sustainability: the
project involves organic farms.
•
Rural vitality: creation of new jobs in
several sectors (agriculture, food
processing, catering, etc.); higher
incomes; rural identity (spillover to
local sectors).
© Erdäpfelregion Lainsitztal
Public Goods provided
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Diversification (Leader approach)
“Mantania Tower Traditional Hotel”, Trikala (GR)
Establishment of a medium-sized rural accommodation
unit in an area characterized by its high natural and
aesthetic value.
The aim was to establish an
accommodation which respects local
architecture and offers a wide range of
services specific to the area (restaurant
serving traditional local food; small shop
selling local products; organization of
“truffle days” and mushroom collection).
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“Mantania Tower Traditional Hotel”, Trikala (GR)
Public Goods provided
Environmental sustainability: compliance with
local traditional architecture; commodification of
natural and aesthetic value of the area.
Rural vitality: creation of a significant number of new jobs;
higher incomes; rural identity (spillover to local sectors).
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