Promoting rural economic diversification where small scale agriculture predominates

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While the majority of OECD countries have shed labour in agriculture through productivity gains, some countries continue to have a higher labour share in agriculture and low productivity. Such is the case in Poland where the agricultural sector is also the most labour intensive in the European Union. Agriculture as a share of total employment stands at 11% while its total value added to the economy stands at only 2.4% (2015). This is in part due to limited land consolidation and the dominance of small farms, as well as hidden unemployment in agriculture. While agriculture is a key economic activity for rural dwellers, it is not highly remunerative and farm households face high poverty rates. In 2016, approximately one in four farmers lived in relative poverty, and 11% of farmers lived in extreme poverty.

Tackling this issue is of high priority. But it presents a complex policy challenge related to such factors as the structure of social supports, connections, local labour markets and more fundamentally, ways of life—with many having a preference for small farm living. The Rural Policy Review of Poland (released March 2018) examines these issues and recommends a number of policy options to support economic diversification.  One of the many strengths that Poland has to draw on in meeting this challenge is its settlement structure, which includes a large number of small and medium sized cities. In almost all rural regions of Poland, at least half of the regional population can reach a regional centre with a population larger than 50 000 inhabitants in less than 45 minutes.  As such, rural urban linkages are one part of the broader solution.

For more information on this work please contact Tamara Krawchenko, Policy Analyst, on tamara.krawchenko@oecd.org

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