Exploring the labour productivity of agricultural systems across European regions: A multilevel approach

Agricultural productivity varies greatly among agricultural systems and among regions in Europe. A multilevel logistic regression model was applied to investigate the labour productivity of the six main agricultural systems across European NUTS2 regions. K-means and two-step clustering methods were used to classify European regions based on the agricultural systems' standard output per annual work unit. We analysed the effect of environmental (soil erosion, rainfed yield potential), structural (farm education, age, pluriactivity, diversification, rented agricultural land), technical (yield ratio) and contextual (gross domestic product per capita, population density) factors on labor productivity. Significant differences were revealed between northern-central regions and the continental peripheries (Mediterranean, Eastern). Soil erosion negatively affects agricultural labour productivity; for each one ton/ha increase in the modelled annual soil erosion rate the odds of regions to attain high labour productivity decreased by 28%. The importance of technical efficiency in crop production was also identified. Observed low wheat yields, relative to modelled potential yields, in the southern, eastern and northern European regions indicate a large unexploited gap. The positive effect of the regional gross domestic product per capita and the low population density confirmed the importance of contextual factors on labour productivity. A second analysis of a composite indicator of the labour productivity of the European agricultural systems, which accounted for the productivity of each system without considering its size, revealed the positive effect of farm education and the negative effect of pluriactivity on agricultural labour productivity. The analyses indicate the importance of compensatory allowances for areas facing natural constraints, while investing in farm training schemes and advisory services could increase the adoption of new technologies and improve the performance of farmers in both economic and environmental terms. Finally, the significance of contextual factors indicates the importance of a better harmonisation of rural development policy with regional policy.