Thematic Group on Economic Vulnerability of Farming

This Thematic Group shared analysis, insights, experiences, and innovative ideas on the drivers of economic vulnerability, how challenges are being addressed, and how policy mechanisms under the CAP are used for addressing economic vulnerabilities in farming.

The agricultural sector is a cornerstone of the European Union, contributing significantly to rural livelihoods, cultural heritage, and food security. With approximately 10 million farms spread across diverse geographical areas, the EU's agricultural landscape is characterised by a wide variety of farming systems, ranging from large-scale agribusinesses to small family farms. Farming activities provide employment for millions of people, and are fundamental to the vitality of rural and island communities across the European Union.

Farming faces significant economic challenges, with issues such as price volatility, rising input costs, and increasing competition from global markets, all contributing to a complex environment for European farmers.  Additionally, the increased frequency and intensity of extreme weather events are already negatively impacting agricultural production.  These challenges are particularly acute for smaller farms and farmers in economically disadvantaged or geographically challenging regions. Such businesses are often constrained by limited economies of scale, reduced access to finance and technology, and a higher dependency on subsidies, making them particularly vulnerable to economic and environmental or climate related shocks.

The Common Agricultural Policy (CAP) provides several mechanisms for risk prevention and risk management with a focus on supporting farmers to build up resilience by mitigating the impacts of crises and being able to better respond to these challenges, including through direct payments, productive and non-productive investments, and risk management tools. Despite this support, the economic viability of many farming enterprises remains uncertain, especially those operating in regions with lower productivity potential or under more challenging conditions.

This Thematic Group (TG) was an opportunity for you to be part of a committed group of experts and relevant stakeholders that explored various issues associated with the economic vulnerability of farming, including risk management, and society and the environment.  TG members considered how challenges can be overcome by farm businesses, e.g. through new ways of working, the application of risk management tools, and the use of income support tools.  Finally, the group also considered how the CAP currently addresses, or could better address, economic vulnerabilities.

The objectives of this TG were to: