Employment in rural areas: closing the jobs gap

As part of the European employment strategy (EES) launched in 1997, the Commission assesses employment prospects in rural areas, examines the impact of the Common Agricultural Policy (CAP) and rural development policies on jobs, and proposes ways to close the gap.

ACT

Communication from the Commission of 21 December 2006 entitled "Employment in rural areas: closing the jobs gap" [COM(2006) 857 final - Not published in the Official Journal].

SUMMARY

Europe's rural areas face a common challenge: the creation of high-quality, sustainable jobs. In this area, the gap between urban and rural areas continues to widen. Although rural areas make up 93% of the territory of the European Union (EU), income per capita in these areas is little more than half that in urban areas. For this reason it is becoming increasingly difficult to attract and retain skilled individuals.

Several challenges have been identified for the future of rural employment:

• the ageing of the farming population;
• the participation of young people and women in the rural economy;
• the enlargement of the EU;
• producer support under the new CAP (revised in 2003) based on a reinforced rural development policy which focuses on jobs, growth and sustainability.

The Commission therefore proposes to close the jobs gap in rural areas by improving the adaptability of workers and enterprises and ensuring better education and skills.

An evolving demographic situation

Two processes of demographic change are currently taking place in Europe. The first is the migration of the rural population towards urban areas or accessible rural areas. The second is a "counter-urbanisation" flow out of urban areas into accessible rural areas. These areas are thus experiencing strong growth, at the expense of predominantly rural areas, which are slowly being depleted of population and economic activity.

Rural areas in the southern Member States are most affected by population ageing.

Low employment rates and a tertiary sector which is lagging behind

The employment rate is rising more quickly in urban areas (64.7% in 2004) than in rural areas (60.1%). However, certain rural areas close to towns have high rates of employment growth.

The tertiary sector tends to be dominated by the public sector in rural areas, and private services tend to be less developed than in urban areas.

Lack of skills and opportunities

Skills levels are lower in rural areas: some 15% of the population in rural areas has third-level education, while in urban areas this figure is 20%. Skilled individuals also tend to migrate to urban areas because of better job opportunities.

In some rural areas, the lack of training infrastructure and child-care facilities prevent entry or upskilling in the labour market. These deficiencies directly affect women and young people. Facing high levels of unemployment, the majority of them decide to leave the rural areas, which in turn creates difficulties for generational renewal.

The impact of CAP reform and rural development policies

In order to successfully adjust production structures in the Member States, it is essential to improve competitiveness and environmental sustainability and to boost jobs and growth. The problem is that many farmers still do not have the necessary skills in terms of innovation, diversification, bioenergy production, provision of environmental services and development of local services. For this reason it is imperative to promote research and development, vocational training, advisory services and innovation.

Evaluations indicate that on-farm investment, training, forestry measures, and measures promoting the development of rural areas have been effective in creating employment. Rural development policies have played an important role in preventing depopulation and land abandonment and in creating and maintaining jobs.

Through successive reforms of the Common Agricultural Policy over the past twenty years, labour outflows from the agricultural sector have been broadly constant at around 2-3% per year. The main determinants of labour adjustment in the farm sector are technological change, returns on capital and the relative remuneration of agricultural labour compared to other sectors. It is to be expected that some 2 million workers from the EU-15, 1 to 2 million workers from the ten new Member States and 1 to 2 million workers from Bulgaria and Romania will leave the sector by 2014. At the same time, without the introduction of direct aids to producers, many rural areas would have faced major economic, social and environmental problems.

Closing the jobs gap

Those rural areas which are most remote, depopulated or dependent on agriculture face many challenges: low levels of income, high unemployment rates, unfavourable demographic situations, a lack of skills, human capital and opportunities for women and young people, and slower development of the tertiary sector. It is imperative that rural areas in the EU exploit their potential to meet demand both in Europe and globally. If they do not, they will fall further behind urban areas.

Rural areas offer many opportunities in terms of tourism, living and working conditions and natural resources. The high quality of Europe's agricultural produce also continues to be a major asset.

The Commission therefore recommends that:

• the process of CAP reform should be maintained and consolidated;
• Member States should encourage the cultivation of energy crops and the development of renewable energy enterprises;
• the integration of the new Member States and the restructuring of their agriculture should remain a priority over the coming years;
• the full range of Community instruments, and more specifically measures in the area of rural development, should be used to deliver the priorities of knowledge transfer, modernisation, innovation, quality in the food chain, job creation and growth.

The synergy between structural, employment and rural development policies must be maximised in order to ensure optimum job creation. For its part, the Commission will be responsible for assessing the effects of the policies on employment in rural areas, using statistical instruments.

Last updated: 08.05.2007