• Analysis
  • September 21, 2018
  • 8 minutes
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Rural areas have very few farmers. Why does policy focus on them?

Some regions' economic profile is in many ways similar to that of larger cities

For most people in developed countries, the word “rural” carries a sense of rustic charm: expansive fields of crops, herds of livestock and daily challenges entirely different from those of the big city. That image causes no problems if rural communities are just a holiday destination — but it’s no guide for policymaking.

Across the US and Europe, the share of the rural population working in agriculture is surprisingly but consistently small. Its contribution to the incomes and economic vitality of rural areas is even less. But agriculture still plays an outsize role in some policy.

Data on these communities instead reveals that their economic profile is in many ways similar to that of larger cities. The kind of support they need from government, too, is not so different — a fact governments are gradually starting to recognise.

Agriculture is on the decline

Rapid industrialisation, particularly after World War II, has meant that agriculture plays a relatively small role in most developed economies.

America’s farms contributed just 1% of its GDP in 2015, according to the US Department of Agriculture, and data from the World Bank shows a similar pattern elsewhere: agriculture and fishing make up less than 1% of GDP in the UK and Germany.

Those figures partly reflect the significant urbanisation of most rich countries, concentrating people and economic activity in cities.

But that isn’t the whole story: farming also plays a quite limited role even in rural areas far from major urban clusters.

Across Europe, agriculture makes up a tiny share of rural employment apart from in poorer countries of eastern Europe, particularly Bulgaria and Romania. In wealthier parts of the EU, the relative insignificance of farming is stark.

Source: European Commission

The 2011 UK census found that just 3.4% of rural residents in England and Wales worked in agriculture, forestry or fishing.

In the United States agriculture plays a slightly bigger role, but statistics from the Bureau of Economic Analysis show that it’s still clearly overshadowed by other industries.

In the 1870 counties with a predominantly rural population, farming accounts for just 6.6% of total employment. Even in the 702 counties classified as entirely rural by the Census Bureau, the figure is only 12.2%.

Farm workers are outnumbered by people working in retail, food or accommodation in all but the most rural counties, where numbers are roughly equal. Government employment far outstrips farming all over the country.

Rural policy isn’t agricultural

There are plenty of reasons, from food security to environmental sustainability, for policymakers to concern themselves with agriculture. But for the goal of supporting resilient rural communities, these figures suggest that farming shouldn’t be the main area of focus.

The composition of the rural workforce is broadly similar to that in cities, with a small manufacturing workforce complemented by a large number of people working in services. But that economy hasn’t worked as well for rural communities: in the US, wage and employment growth are consistently slower and household income is 25% lower in rural areas than cities.

Economic development in rural areas is held back by many of the same challenges that cities are trying to address, such as education and training, housing, public transport and digital connectivity.

Poor public transport links make it difficult to access services, including education: in the EU in 2015, 12.2% of rural 18-to-24-year olds had left high school without graduating, compared to 9.8% in cities. The share of young people not in employment, education or training was 17.9%, well above the urban rate of 14.2%.

The digital divide between rural and urban areas also remains acute. Across the EU, 62% of the population in rural areas uses the internet daily, compared to 75% in cities. That’s driven partly by an older population, but also by much more limited access. The UK telecoms regulator, Ofcom, found last year that the share of households without adequate broadband services is eight times higher in rural areas than cities.

A 2010 OECD report highlighted the need for rural policymakers to look beyond the farm, noting that “while agricultural policies are important for those who obtain their livelihood from the agricultural sector, the contribution of these policies to the economies of rural communities is tending to diminish.”

The non-agricultural aspects of rural development are sometimes forgotten. Most agencies of the UK’s Department for the Environment, Food and Rural Affairs, are focused on primary industry. And in the US, the Office of Rural Development is only a sub-agency of the agriculture department.

But in some places, rural areas are starting to benefit from policy inspired by the place-based smart cities approaches that have become globally popular.

Finland and other European countries, backed by the EU’s Network for Rural Development, are implementing “smart countryside” and “smart village” initiatives to improve digitisation and social connectedness in rural areas.

And the US government is increasingly trying to make rural broadband a priority, most recently through the announcement last month of $97 million to improve rural connectivity.

It’s a step towards a more modern approach to rural development. But change is gradual. Despite its high-tech character, the initiative’s funding comes from a familiar old source —  the Department of Agriculture. — Fergus Peace

(Picture credit: Flickr/United Soybean Board)

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