Myrna Van Leeuwen, Ida Terluin, Agricultural Economics Research Institute, The Hague, The Netherlands, Eveline Van Leeuwen, Free University Amsterdam
Department of Spatial Economics, Amsterdam, The Netherlands
Importance of agro-food industry for small and medium-sized towns in EU countries; an inter-regional SAM analysis (assigned to theme
Traditionally, small and medium sized rural towns were linked with agricultural trade. Due to the process of economic transformation, in which the industries and services sectors took over the predominant position of the agricultural sector, economic activities related to agriculture weakened in rural towns. Also, the importance of agriculture for rural towns will be affected by the latest CAP reforms, which put new focus on assisting rural areas with their economies and communities, and not just on farming. However, the agricultural industry is still an important sector in many of the small and medium sized towns’ hinterlands. It appeared from the Marketown project 1)that the agricultural industry has a tendency to purchase locally, so changes in policy that affect the agricultural sectors in the hinterlands of these towns will then have an impact on the towns themselves. In this scope, it may be wondered to which extent changing agricultural support in rural towns affect the economy in the town or the hinterland. For example, an arable farmer can employ local workers and local suppliers of seeds, but workers and seeds can also be derived from outside the local economy. In the first case, the local economy benefits directly from the farming through the related economic transactions, whereas in the second case the benefits leak out of the local economy. Whether the first or second case occurs, depends on the outcome of the interplay of economic forces. Hence, insight into the spatial distribution of the economic agricultural linkages in the local economy might be helpful to assess the degree to which extent the rural development initiatives spread out in the local economy. Such insights can be gained by means of Social Accounting Matrix (SAM) multipliers. As the Marketowns project was interested to study the economic linkages within and between sectors and households of the local economy, it was necessary to create inter-regional models that could trace flows of goods, services and labour between the towns, its hinterlands and the ‘rest of the world’. This resulted in the construction of inter-regional SAMs for 30 studied towns.
The objective of this paper is to examine the importance of the agro-food industry for the local economy and employment of 30 selected European towns by using inter-regional SAMs. These towns differ from each other concerning their size (small, medium-sized), type (agricultural, tourist, peri-urban) and origin (Netherlands, France, Portugal, Poland and UK). On the whole, it can be said that the higher the degree of integration of the agro-food sector in the local economy, the larger its role for the rural town and its hinterland. The study will provide insight into the consequences of expected demand effects from e.g. agricultural policy reforms for the local areas. Also, it examines whether there exist similar patterns for type of towns or size of towns between countries regarding the agro-food linkages with economic agencies in the own location. The results can help policy makers to understand the economic and social strength and weaknesses of the agro-food industry for their typical town. 1) MARKETOWNS is the acronym for the research project ‘The role of small and medium sized towns in rural development’, which was financed under the Fifth Framework Programme of the European Commission (QLRT-2000-01923).
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