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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 AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentPresentation OutlineInformal food networks in Greece The incidence of subsistence (SFs) and semi-subsistence farms (SSFs) in GreeceFarm-level data from a local field survey

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

1. Informal food networks in Greece

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

Type of Network (An initial mapping)Broader AthensThe rest of Greece1 Organized Direct Sales39762 Food Networks Without intermediaries641013 Urban vegetable gardens63844 Social Groceries661025Agricultural Cooperatives [new type co-ops]346 Recycling Re-use of Food 94Source: www.enallaktikos.gr, April 2014In response to the crisis, since 2011:Within the serious crisis we are going through, during the last five years [basically since 2011], one of the most important responses on behalf of citizens, local authorities etc. is the emergence of a series of alternative food networks.32. How many Subsistence & Semi-Subsistence farms in Greece?

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development Farm Structure, 2010Source: Eurostat, Farm Structure Survey, 2010Size Class (Ha)FarmsNumber%06.1800,9%1-1,9367.16050,8%2,1-4,9183.82025,4%5,0-9,987.77012,1%10,0-19,945.5806,3%20,0-29,914.6702,0%30,0-49,910.8501,5%50,0-99,95.4800,8%100,0+1.5000,2%Total723.010100,0%77% of farms, under 5 HaAverage Farm Size: 4,8 HaEconomic 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 holderGreece has more than 700 thousand farms, most of them small-scale4

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentYear123456Farm 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-consumptionNon-Farm HouseholdsTotalSome agricultural production for self-consumption2009154.3313,8%299.1967,3%88.2282,1%230.7095,6%1.150.22728,0%2.191.46053,3%4.114.151100%2012166.9474,0%236.9465,7%60.0981,4%251.6046,0%1.178.00128,3%2.269.64054,5%4.163.236100%2009-2012+12.616-62.250-28.13020.895+27.77478.18049.085 A detailed typology of All Greek Households:Source: Household Budget Surveys, Elaborated DataPoverty Rates (% in each category)

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentSource: Household Budget Surveys, Elaborated DataAgricultural Self-Consumption: mitigates poverty rates

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentSource: Household Budget Surveys, Elaborated Data2012, Poverty Rates3. A Field Survey in Municipality of Ancient Epidaurus

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

Detailed farm-level data in 2006 historical data (1950s-2006) A follow-up survey in 2011We have conducted a field survey in 2006, at both the farm level and the farm household level.A similar survey was conducted in 2011.8

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentPopulation: 1733 inhabitantsAverage farm size: 2,4 ha Total number of farms/farm households: 410Our representative sample: 70 farms

The local agro-system and rural economy

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentDimensions1950s-1960s1970s-2000sTechnical 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- consumptionSocial no co-operation among farmers no co-operation among farmersEconomic 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 famersin Athens and elsewhere, through informal family networks through commercial networks

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentHow many SFs and SSFs in this area?All farms have a market participation rate >= 50% [None SF or SSF]Four farms (5,7%) have an economic size < 1 ESUSixty-five farms (93%) with Utilized Agr. Area =< 5 ha, therefore we use the 3rd criterion to distinguish semi-subsistence farms

Lets focus on these 65 semi-subsistence farms:

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentThese Farms/Farm Households follow various Livelihood Strategies:Changes in UAA over time (ha) [1950's - 2006]Number of FarmsHired Labour/ Total LabourDirect Marketing of farm products (hours per farm per year)DiversificationOff-farm employment of household members (hours per household per year)Enlargement1056%4711 farm converted to organic in 20003084Contraction1242%5672 farms converted to organic (2000, 2002) 1 with hotel (in 1975) 1 with tavern (in 2000)3029No change4356%833 with Rooms to Rent (1990, 1996, 2001) 2 with Taverns (1995, 1999) 2 with Hotels (1982, 1992) 1 with Restaurant (1975)4438

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentA specific structure of the cost of production

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentEuros/KgProduction per Farm (Kg)Oranges,Average Total Cost (/Kg)

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentEuros/KgProduction per Farm (Kg)Mandarines,Average Total Cost (/Kg)

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentTherefore, beyond a minimum level of production:Costs remain essentially constant

Strong indications for constant returns to scaleNo substantial differences in efficiency of farms19Farm Economic Sustainability

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development In the short-run: all farms are economically sustainable:(*) those who with their revenue cover their variable costs 21

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Developmentlong-term economically sustainable farms*In the long run:UAA up to 2,3 ha: two-thirds of farms are economically sustainableUAA>2,3 ha: all farms are economically sustainable

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

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentOnly 8 out of 65 farms (12%) employ >1 Annual Work UnitsMost of semi-subsistence farms are small, also in terms of human labour needs24

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentSee also: EU-RD Report 2013, pp. 119-121HouseholdsStandard of LivingEquivalent Household Income, in comparison to:Average Equivalent Household Income of Peloponnesus RegionPoverty LinePercentage of Households in each category

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural DevelopmentAverage Equivalent Household Income of Peloponnesus Region1,5%15,4%83,1%Poverty LineTotal Household Equivalent Income compared to poverty 27Some persistent problemsA 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 productsChange in land use, from fertile cultivated land, to land for construction

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

. most of them viable livelihood strategies28Resilience 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 withconversion to organic farming, orfarm successionIncrease of direct sales to Athens open-air markets (29% of farms in 2006, 38% in 2011)Unabated demand for tourist services

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

. most of them viable livelihood strategies29Resilience 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

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

. most of them viable livelihood strategies30ConclusionsIncreased stability of Farms/Farm Households and potential to recover after external shocks, due to:A farm economy well integrated with the broader regional and local economyDiverse viable livelihood strategies pursued from Farm HouseholdsA concrete cost structure for farm products, indicating constant returns to scale

AGRICULTURAL UNVERSITY OF ATHENSDepartment of Agr. Economics & Rural Development

. most of them viable livelihood strategies31