Hyejin Lee (p)

Paula Pereda

Does agriculture benefit rural economies? In this paper, I show the surprisingly limited economic contribution of agriculture across EU regions, including rural regions. Even in remote rural regions, the direct economic contribution of agriculture is smaller than that of the service sector, as measured by the Gross Value Added and employment. Yet, agriculture could still matter if it has large positive multiplier effects on local economies. To investigate this indirect channel, I estimate agricultural multipliers for employment and for income in EU regions using shift-share instruments. For employment, estimates show little effect of agriculture on other sectors. For income, rather than a positive effect, I find that agriculture may crowd out manufacturing activity. This negative effect is robust to different income indicators and alternative compositions of the shift-share instrument. These findings suggest that attempts to stimulate rural economies in the EU by supporting agriculture may be misguided.

Fatima Zohra Sabrane (p), Donghwan An, Taeyoon Kim, Phumsith Mahasuweerachai

Hyejin Lee

Income diversification is one of the risk management tools farmers apply in order to cope with different risks they can come across to during the production process. This tool allows rural households to answer their basic needs within an unstable economic situation or even to generate extra income for further investment in the future. However, there are some fears that diversifying income would be at the expense of farm productivity since labor is reallocated from farm to off-farm sources. In this paper, we have analyzed the impact of income diversification on the farm labor and land productivity in central and northeastern region of Thailand using cross sectional data based on interviews with 684 farmers. On average, Thai farmers have low-medium diversification index with at least two income sources and 31% as the share of their off-farm income. These measures have different trends with respect to income distribution. Even though farm income remained the main source of income for all farmers, remittances constituted the main source of off-farm income among all households. As the household’s total income increases, income from own businesses increased simultaneously. Results show that while the labor productivity was significantly affected by the three measures of diversification (NIS, OFS and HDI), land productivity, on the other hand, was only affected negatively by the OFS. The HDI, OFS, age, household size, having livestock and subscribing to the village fund had a negative impact on the household’s labor productivity. However, the NIS, hired labor input, cost of machinery, secondary education, age squared, belonging to the large rice field group and being in central region affected the labor productivity positively. On the other hand, the OFS and the cost of cultivation squared had a significant negative effect on the land productivity, but the cost of cultivation, male farmers, large rice group and central region had a positive effect on the yield. We conclude that having off-farm income does indeed reduce farm productivity in rural central and isarn regions of Thailand. Some new measures to reach a compromise between diversification and productivity are yet to be investigated.

Stergiani Zountsa (p), Dimitrios V. Skiadas

Fatima Zohra Sabrane

The main question that the current paper will answer is if a small size city of the Greek region can become more attractive and sustainable through the implementation of integrated development plan that will promote the city’s regeneration. The city of Didimotixo is too far from the main centers and the local authorities there face numerous challenges in order to provide the basic public goods and services to the local population, as well as to create the necessary infrastructure, within the city limits. Based on the national data regarding the absorption of European funds, the city’s authorities focus mainly on basic infrastructure and, in cooperation with other relevant authorities, on highlighting the city’s cultural aspects. Thus, a necessity is verified, for the city change its course and revitalize its development opportunities in the maximum degree in order to gain a better perspective for its future. Cultural tourism could be the vehicle for its development and revitalization on the assumption that the city will invest in culture in a targeted and sustainable way.
With regard to designing an integrated strategy and its funding, the E.U. provided in cohesion policy 2014-2020, two new tools to support the territorial dimension in cohesion policy. These tools named the Integrated Territorial Investment (ITI) and the Community-Led Local Development (CLLD) are available also for the Greek peri-urban or rural areas. These tools can be useful in designing and implementing community-led local development strategies to meet their specific needs and can be implemented by using resources from one Fund or by combining resources from several funds. Thus, the experience of the previous period 2007-2013, the new available tools and the designing of an integrated development plan that will promote city’s cultural and historical inheritance in relation to well designed administrative reforms and investments, are factors that could affect the economic, social, environmental development of the area. One of the challenges is the engagement of the local stakeholders in designing an integrated development plan in which the city should shape its own needs and targets. This bottom up approach should be combined with a multilevel approach in order for the city to gain the necessary technical assistance for attracting relevant funds. Literature research combined with a questionnaire survey, about what the city itself believes and which is the proper development framework set, will form the basis for drawing conclusions and proposals about the selected case study.

Patricia Ruggiero, Paula Pereda (p), Alexander Pfaff

Stergiani Zountsa

A range of factors explains deforestation. Economic factors are a critical driver of deforestation through natural resource exploitation or promoting infrastructure expansion over forested land. In this paper, we investigate how dynamics related to land use and rural area occupation may change the effect of economic incentives for deforestation. To do that, we gather microdata on deforestation, land property, credit data and other for control variables. We construct a municipality-level panel by year and estimate the effects of rural credits on deforestation by different conditions of land use and organization, from more occupied areas to more unsettled ones and from more native areas to more rural established ones. Our preliminary results indicate that credit directed to cattle raising activity increases deforestation in municipalities with native dynamic condition; while credit directed to agriculture has no effect or even a negative effect on deforestation. In subsequent steps, we intend to explore different definitions of land governance.