Who Owns The Farmland - Redux

Ownership versus Use + Europe’s inevitable march to consolidation

I missed the news last week that heads of state and government from 43 countries and the EU adopted the Belém Declaration on Hunger, Poverty, and Human-Centered Climate Action.

It says all the right things about social protections, just transition, and support for small-scale food producers. I really, truly hope this declaration isn’t just lip service, that something meaningful is built on top on this.

Forgive me if I sound less than enthusiastic. It’s just that I saw a who’s who of governments that have used food to oppress their own people. Of the first 15 countries that endorsed the Declaration are Sudan (no. 4), North Korea (8), and my own nation Myanmar (13, how apt!).

So yeah, I’m keeping my hopes in check.

On a slightly different note, I’ll be in Kuala Lumpur, Malaysia, next week to attend the 2025 Global Investigative Journalism Conference, and speak on a panel about investigating world hunger. So if you’re also coming or happen to be there, do drop me a line. Food recommendations very much welcome.

A vineyard in Umbria. Photo by me.

Last week, after my newsletter went out, I received an email from Alan Matthews, widely perceived as the foremost authority on the European Union’s Common Agricultural Policy (CAP), which, according to the New York Times, is one of the world’s largest subsidy schemes.

Alan is Professor Emeritus in the Department of Economics at Trinity College, Dublin, and runs the CAPreform.eu blog, a go-to source for anyone looking for detailed expert analysis of all things CAP.

He shared some thoughts provoked by my newsletter, which I found to be fascinating. So as someone who respects his work, I couldn’t let this opportunity pass, and asked him to elaborate his comments over a Zoom call.

Below is the conversation which has been edited slightly for length and clarity.

THIN: Alan, you correctly pointed out that the title of the newsletter should be “Who Farms the Farmland” instead of “Who Owns the Farmland”. It might sound obvious but can you explain the key differences between the two and why they matter?

ALAN: Sure. Basically, it’s kind of hard to get statistics on ownership of land. Much more difficult than on the size or the structure of the actual holdings themselves. But I’d be reasonably certain in saying that the ownership of land is much more concentrated than the size. 

Basically, on a global level, you would have a lot of tenant farmers who are renting land from larger land owners.

In Central Eastern Europe, you actually have the opposite case, because of the historical evolution of land structures after the fall of communism. Romania is a really interesting case to look at because about a third of all the so-called holdings that we have in Europe are in Romania. They’re largely small, semi-subsistence plots.

But after the land restitution, when the land was given back to the families who would have had an ownership right at the end of the Second World War, most of these families are now living in towns, so they have simply rented their land to the larger holdings. So the larger holdings are renting the land from the small guys, which is a little bit the converse of what I suspect is the more traditional pattern in the rest of Europe.

Another very interesting study I saw, while I was looking to chat with you, is a very detailed study of Brandenburg, which was formerly in Eastern Germany. It’s one of the few studies I’ve seen that actually looks at land ownership. Basically, they went and got company data and the cadastral survey on who actually owns the land. There, interestingly, a lot of the larger landholders were actually public agencies. Again, that may be a reflection of the sort of history of Eastern Germany.

(THIN: The paper also found that in general, only one-third of the land is owned by farmers and agriculture owners, with public institutions, private investors and nature protection institutions being the largest owners.)

So the first thing is absolutely that there isn’t a consistent story here, and it does vary depending on the history of land in different countries. But I think on the whole, we’d be fairly safe in saying that land ownership is more concentrated than land use or land management.

As you know, we’re going to have a land observatory in the EU now, which hopefully will throw some light on this.

THIN: Does this difference between who owns farmland and who actually farms it affect incentives for sustainable land management in Europe?

ALAN: I think the answer to your question is a very definite yes. If you think of the European Union, roughly about half of the agricultural land is rented. So if you think about the incentives facing a farmer, who is on a lease….

Now, again, leases differ greatly, and the security of tenure differs greatly across countries depending on their history. But assume you might be a medium sized farmer, you have an elderly neighbour, and you’re leasing some land from him or her, and you might have it for five or seven years, but you’re not definite that you will have it in 15 or 20 years time.

If you want to produce healthy soil, that’s not something that you can do overnight. It requires consistent application. And why would you do that if it costs you to plant cover crops and to have longer rotations that might have some low yielding crops like legumes to improve the soil, but it’s not going to do your bottom line much good if at the end of the seven years, somebody else is going to take that land back from you? Why would you invest in it?

Another intervention that’s talked about a lot in Europe at the moment is carbon farming. That you would pay farmers to sequester carbon in the soil. In the certification program they’re going to have, they’re going to provide options and the minimum is a five-year contract. One can obviously question whether storing carbon for such a short period of time warrants significant financial support.

But my point is that again, why would you invest in carbon farming if at the end of the period, you risk that somebody else is going to get the benefit of all the work you put into improving the soil?

So the ownership and tenancy issue is really important when you’re thinking about incentives for more sustainable agriculture.

THIN: You describe farm consolidation in Europe as both inevitable and desirable, especially “because Europe faces an increasing labour shortage in the coming years, giving our unwillingness to allow further immigration”. Can you elaborate more on this point?

ALAN: First of all, let me make it clear that I expect to continue to see a very varied structure of holdings in agriculture. We can look at England and Wales, where the number of very small holdings is beginning to increase again. So along with the consolidation of farmland in a smaller number of farms at the higher end, the productive end, it relates to the fact that people want second homes in the country, they want to have some ground for a horse, or something like that. These may not be people living there permanently. It may be more of a summer house arrangement. But it can be a contributor to rural vitality.

Again, it illustrates the problems of just looking at farm structure statistics. It doesn’t really tell you a huge amount of what’s actually happening on those farms. In a recent blog post I looked at the structural statistics in Europe. We have this figure from Eurostat that there were 9.1 million holdings in 2020. But I argued that 6.4 million is a much more accurate figure.

Eurostat includes a whole lot of holdings that are less than one hectare in size. Obviously they can be an important source of food security for the families living there, but is that really part of what we think of as the agricultural sector? In terms of producing food on a commercial scale? Looking at the bare statistics is absolutely essential as a starting point, but it doesn’t really tell you a lot about what’s happening on those farms.

A lot of governments over the 20th century have tried to limit the pace of structural change. I’m generalising a little bit, but my sense is that nearly all of them have done away with ceilings on farm size and so on, because the economic realities have overtaken them on that. You could say that’s just part of the general trend towards more liberal economic policies that we’ve had since the 1980s.

So, there’s two types of cases. 

If you look at the 9.1 million holdings that allegedly we have in Europe, two-thirds of those - 66% - produce less than 8,000 Euros of agricultural output a year. The income is probably about half of that. So basically, two-thirds of holdings in Europe - the bulk of which are in Poland and Romania - are not viable. You certainly will not go back to work full time on a holding where your likely income is 4,000 Euros a year. So these holdings are going to consolidate.

There’s a more interesting question around the close-to-viable family farms. Let’s say a dairy farmer in Ireland who has 40 hectares and 80 cows. What about these farmers? My argument is that when I look at the figures, they simply don’t have enough cows or enough hectares to remunerate their labour in a way that is going to satisfy the next generation.

Of course, when those farms close, there is less economic activity in that rural area. There’s fewer people in the local community, although that’s not the only driver of the shift to cities. The public services, the private services, the local bank branches, the local shopkeepers, they’re also closing.

We have local elections in Denmark next week, and there is a relatively new party based on the idea that decisions are made by the elites in Copenhagen who don’t know anything about those living in provincial Denmark. The bus services are shutting down and the shops are shutting down. But the fact is that it is the local people themselves who are not using those local shops, they’re buying in the big supermarket in town on their way home. They have a car. They’re not using those bus services.

There was an interesting piece on the television news just two or three days ago. A big problem is medical care in rural areas, because doctors don’t want to move there. The Danish government is thinking now of making it compulsory for doctors to serve for a period in rural areas and the reporter was interviewing a class of medical students. None of them wanted to go and work in a rural area. And their explanation was very simple.

They said, “Look, I’ve been studying medicine for however long it takes these days. I have my friends here”. Maybe some of them are even married and have children. You know, you cannot force people to do things without considering the other choices they have.

So I just find a lot of this idea of wanting young people to go back into farming is not realistic. There is a lot of discussion now around the need for generational renewal, and this is urgently needed on farms with a reasonable prospect of generating a comparable income, but we should not see it as a mechanism to slow the movement out of farming.

Rural young people today are much better educated, and this is a great thing. They have opportunities. But education, particularly third level, means that you go to a big city and you have your life there. Some will (move back), of course, but they need to have a decent standard of living.

That’s why I think the consolidation trend is inevitable. The big policy question is, how do you persuade people to move back by creating livelihoods in rural areas, which is a much broader question than simply farming? It is old fashioned to frame the issue like that. How do we create meaningful jobs in rural areas? It’s very difficult because there are huge network externalities of having new jobs in an urban area.

How do we ensure a decent quality of life in terms of access to medical care and to schooling? I don’t have easy answers, but this is the relevant area to focus on rather than trying to prevent the consolidation of farms.

THIN: That’s really interesting. Because remember, at one point around 2020 and 2021, at the height of COVID lockdowns, there was this talk of migration back to rural areas because you can actually get fresh air and you can go out and walk etc. But I don’t think we’ve actually seen that happen, at least not in a sustained way.

ALAN: No. Obviously IT infrastructure is still pretty poor in a lot of rural areas where people might want to live. But it is also your health services and schooling. It’s not just about being able to telework.

THIN: You also said in your email that environmental impact depends more on farm practices than on farm size despite that large farms tend to be more focused on monoculture and engage in practices that are harmful to ecosystems. Could you perhaps use Denmark (or elsewhere) as an example in talking about the kinds of policies or incentives that have worked (or could work) best to ensure large farms adopt greener practices?

ALAN: One has to be a little bit careful using Denmark as an example, because it is a highly intensive agriculture with a lot of environmentally negative impacts, particularly on water quality not just with the fjords and nitrogen pollution, but also pesticides getting into the groundwater.

But perhaps because the number of farmers has reached such a low threshold, their social license to farm is much more questioned in Denmark than it would be in the other country I know best: Ireland. So Danish farmers have signed up to the so-called green tripartite agreement which was supported by most of the political parties in the Danish Parliament. The most striking element is the commitment to introduce an emissions tax on livestock methane and nitrous oxide emissions.

But there’s much more to it, because the green tripartite effectively envisages taking 15% of the agricultural area out of production by 2030. This is dramatic. They’ve been arguing about this in the Netherlands for years, and they haven’t been able to do it. And yet the main farmer organisation (in Denmark) has signed up to this. Of course, they have their conditions, that it should be as voluntary as possible. The state is putting a lot of funding into it in compensation. Whether it will be successful or not, is another question. But that is the agreement.

In my view, it’s how you manage your land, rather than the size of your farm, that determines your environmental impact, but you need the right incentives. Like introducing a tax on emissions, or strict nitrogen quotas. We know what needs to be done. Politically, it can be difficult, but it is all to do with the way the land is managed, and not the scale. That would be my view.

Denmark has, I think after Austria, probably the strongest organic sector among European countries. And many of these organic farms are big farms. So nothing to do with scale. 

THIN: How can Europe reconcile the efficiency gains of larger farms with the loss of farm diversity and rural livelihoods, especially in regions like Central and Eastern Europe where consolidation is accelerating? Or is this kind of thinking too binary and there’s a solution in the middle?

ALAN: Of course, there will be smaller farms in the future. Many will operate on a part-time basis. Many will be successful because they can tap into short supply chains, and they will have direct sales. But the evidence on this is that it’s quite a lot of work, like spending eight hours at a farmers market on a Saturday. That’s the cost of your time as much as anything else.

Clearly, you do benefit from removing some stages in the supply chain, but there are additional costs as well. So it’s not an obvious thing that you’re going to be better off. People are doing it, and there is what I would see as a niche demand. But I don’t see it as a model for a large scale food system.

I am very attracted to initiatives like the Global Network of Lighthouse Farms run by Professor Rogier Schulte at Wageningen University. The idea of this network is to showcase farms that are already exemplars of specific aspects of sustainable production. Network farms come in all shapes and sizes but what unites them is their commitment to transformative practices.

To summarise, farm consolidation is driven by the requirement that the return to farm labour must match the equivalent earnings a young person can earn in a non-farm job. It will inevitably lead to a reduction in the numbers at work in the sector. The real challenges lie in managing that structural change, to ensure a successful transition to more diversified rural areas, to avoid the emergence of a small number of mega-farms, and to focus on ensuring that remaining farms, whatever their size, manage their land in ways that protect resources of soil and water and provide the ecosystem services that society needs.

THIN: Is there anything else you’d like to add?

ALAN: One final point, if I may.

There’s an interesting conundrum when it comes to the ownership issue which is where our conversation began. There’s a big concern that land is being purchased by people who have nothing to do with farming, pension funds, etc. But family farming is its own worst enemy here, because through political pressure over the decades, it has succeeded in getting huge tax incentives for agricultural land. But it is these very tax incentives that encourage speculation in land.

The argument is that, yeah, we’re family farms, we don’t really see land as a source of wealth, we’re going to hand it on to the next generation, and if you tax us on the capital asset, then we won’t be able to do that.

You might remember that the Labour government in Britain some months ago tried to limit the Tax Concession on the inheritance of farms, and who was the main spokesperson for the farm protests in front of the House of Commons? The man who used to have a motor program on TV - Jeremy Clarkson, who openly admitted that he had bought a farm for tax avoidance reasons.

And he now appears as the spokesperson for the family farm, saying the Labour government is screwing family farming because they’re limiting, not removing, the Tax Concession. But that Tax Concession is attracting all these wealthy individuals like Clarkson, because they can buy land and pass it on to their heirs without any tax whatsoever. And of course, that drives the price up for ordinary farmers.

Further reading (thanks to Alan for the recommendations)

• Understanding the structure of EU agriculture

• Revealing agricultural land ownership concentration with cadastral and company network data

• The untold power of land: territory as the world’s most enduring asset (need FT subscription)

Thin’s Pickings

1. How did Zohran Mamdani win over New York’s small restaurants? - Vittles

   This interesting piece, published before Mamdani’s win, is about the prominence of small, immigrant-run restaurants in his mayoral campaign and what message that sent to the voters.

   It also touched on the particularly ugly racism that reared its head when one of the videos featured Mamdani eating biryani with his hands. The attacks hit close to home because I also come from a similar culture.
   

2. I Tracked Down The Company Ruining Restaurants - More Perfect Union

   An engaging way of shining a light on the impacts of corporate consolidation and a lack of anti-trust action on our diets and food choices.
   The video also touched on ultra-processed foods, the undermining of local foodways, and the exploitation of labour.
   

3. Food Systems at COP30
   DeSmog’s Rachel Sherrington and Gil Alessi have written a handy guide (with an interactive map) on some of the biggest agrifood emitters who will be attending - and lobbying - at COP30.
   Bloomberg also has an interesting piece on Brazil’s meat industry trying to sell “low-carbon beef” at the climate discussions.
   Some of the nerds among us will also enjoy this Food Systems at COP30 Bingo Card.
   

4. The truth about impartiality at the BBC - Goodall and Good Luck

   One of the best and most clear-eyed critiques of the Trump-BBC debacle from Lewis Goodall, a high-flying former staffer.

   “Instead of some proportion from much of the British media class, we are treated to the tragicomic absurdity of a former British prime minister willing to admonish the national broadcaster and demand the resignation of its Director General, all in the name of defending Donald Trump’s reputation for truth-telling. But it’s worse than that - it is a textbook example of how populists win. We have the ridiculous carnival of Donald Trump and Boris Johnson, of all people, admonishing the BBC for its lack of integrity. And they can get away with it, because no-one expects anything from them and yet we expect everything from the people and places who actually give a damn.”
   

5. Episode #428: Trajectories in Flux - Insight Myanmar
   This podcast episode looks back and forward on what is happening in Myanmar around five key topics: food security, journalism, economics, energy, education, and digital life.

   Yours truly did a double duty on food and media but you know where I stand on all these issues. It’s the other experts who bring illuminating insights. Fair warning: this was a *long* discussion lasting nearly three hours.

As always, please feel free to share this post and send tips and thoughts on bluesky @thinink.bsky.social, mastodon @ThinInk@journa.host, my LinkedIn page, twitter @thinink, or via e-mail thin@thin-ink.net.