Factors contributing to the resilience of subsistence and semi-subsistence farms: evidence from Greece Pavlos Karanikolas Assistant Professor AUA, Dept. of Agr. Economics & Rural Development May 4-8, 2014, Montpellier, France ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department 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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

1. Informal food networks in Greece ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Type of Network (An initial mapping)Broader Athens The rest of Greece 1Organized Direct Sales3976 2Food Networks Without intermediaries Urban vegetable gardens6384 4Social Groceries Agricultural Cooperatives [new type co-ops] 34 6Recycling – Re-use of Food94 Source: April 2014 In response to the crisis, since 2011:

2. How many Subsistence & Semi-Subsistence farms in Greece? ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Farm Structure, 2010 Source: Eurostat, Farm Structure Survey, 2010 Size Class (Ha) Farms Number% ,9% 1-1, ,8% 2,1-4, ,4% 5,0-9, ,1% 10,0-19, ,3% 20,0-29, ,0% 30,0-49, ,5% 50,0-99, ,8% 100, ,2% Total ,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

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Year Farm Households Non-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 ,8% ,3% ,1% ,6% ,0% ,3% % ,0% ,7% ,4% ,0% ,3% ,5% % A detailed typology of All Greek Households: Source: Household Budget Surveys, Elaborated Data

Poverty Rates (% in each category) ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Source: Household Budget Surveys, Elaborated Data

Agricultural Self-Consumption: mitigates poverty rates ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Source: Household Budget Surveys, Elaborated Data 2012, Poverty Rates

3. A Field Survey in Municipality of Ancient Epidaurus ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Detailed farm-level data in 2006 historical data (1950’s- 2006) A follow-up survey in 2011

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development 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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Dimensio ns 1950’s-1960’s1970’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 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

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development 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 3 rd criterion to distinguish semi-subsistence farms

Let’s focus on these 65 ‘semi-subsistence’ farms: ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development These Farms/Farm Households follow various Livelihood Strategies: Changes in UAA over time (ha) [1950's ] Number of Farms Hired Labour/ Total Labour Direct Marketing of farm products (hours per farm per year) DiversificationOff-farm employment of household members (hours per household per year) Enlargement1056%471 1 farm converted to organic in Contraction1242%567 2 farms converted to organic (2000, 2002) 1 with hotel (in 1975) 1 with tavern (in 2000) 3029 No change4356%83 3 with Rooms to Rent (1990, 1996, 2001) 2 with Taverns (1995, 1999) 2 with Hotels (1982, 1992) 1 with Restaurant (1975) 4438

……………… ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

A specific structure of the cost of production

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Euros /Kg Production per Farm (Kg) Oranges, Average Total Cost (€/Kg)

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Euros /Kg Production per Farm (Kg) Mandarines, Average Total Cost (€/Kg)

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development 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

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development In the short-run: all farms are economically sustainable: (*) those who with their revenue cover their variable costs

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development 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

On-Farm Labour

ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development Only 8 out of 65 farms (12%) employ >1 Annual Work Units

……………… ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development See also: EU-RD Report 2013, pp

Household’s Standard 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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development 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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

Resilience to the current crisis (I): : 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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

Resilience to the current crisis (II): farm expansion: before the advent of the crisis (in ). Now, the farmers have not any other potential for new farm investments ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development

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 ΓΕΩΠΟΝΙΚΟ ΠΑΝΕΠΙΣΤΗΜΙΟ ΑΘΗΝΩΝ AGRICULTURAL UNΙVERSITY OF ATHENS Department of Agr. Economics & Rural Development