Labour Productivity and Employment in Agriculture in the European Union

Purpose: The aim of the study is to estimate the level of agricultural employment at which labour input productivity is equal to non-agricultural productivity, i.e. in a situation of intersectoral labour productivity equilibrium. Design/methodology/approach: This paper considers agricultural labour inputs in the context of their productivity as measured by gross value added (GVA) per AWU. The level of agricultural employment at which GVA per AWU in agriculture will equal the GVA created by 1 AWU outside agriculture is sought. This is conventionally referred to in the article as 'optimal' employment. Excess employment above this level is called "unproductive" employment in the article. The calculated employment level does not take into account the actual demand for labour. It is therefore a reference point in the formulation of policies for the evolution of the sectoral structure of employment and not its objective sensu stricto. Findings: The existence of potential over-employment is a common phenomenon in the EU, but it places more of a burden on less developed and less prosperous countries. The situation varies between countries. The relatively largest scale of overemployment in agriculture concerns Romania, Bulgaria and Poland, so the pursuit of optimal employment will be most difficult in these countries. The technologically determined labour demand in EU agriculture is higher than the calculated "optimal" level and varies seasonally. It is therefore necessary to strive in parallel to reduce labour demand and shape the "flexibility" of agriculture-related workers so that they can earn income from outside agriculture at times when their work is not necessary on the farms, and make up for labour shortages at times when work on the farms is concentrated. Practical implications: modernisation and structural transformation processes in agriculture should continue to be supported. Support mechanisms should include, above all, the modernisation of production technologies, the implementation of innovations replacing human labour, including digitisation and artificial intelligence solutions, land concentration and complementary measures, i.e. the increase in the importance of services in production processes and the merging of farmers into production cooperatives and producer groups. Vocational education in rural areas should also be promoted, aimed at better matching the skills of the agricultural population with the needs of the non-agricultural labour market, and communication barriers should be countered so that reaching non-agricultural jobs does not mean having to move to the city or make long and costly commutes. Another area is the stimulation of non-agricultural or agriculture-related economic activities. Originality/value: The contribution of the article comes from setting a benchmark for the 'optimal' level of employment in EU agriculture and from estimating the distance between agricultural labour productivity in individual EU countries and non-agricultural sectors. The article also shows the differences that exist in this respect between the countries studied and points out the resulting practical implications.