Where Have All the Farmers Gone? EU Accession and Structural Change in Bulgaria.

Abstract

The accession to the European Union (EU) led to dramatic changes in agricultural employment in the new member states and several studies indicate that the introduction of stringent requirements related to food quality was the main reason for the dramatic decline in the number of farmers. This is expected to have important welfare implications for the rural population as especially small, poor farmers, who are not able to make the necessary investments, would be excluded from the value chain. This paper uses a unique dataset based on a panel survey of 295 farm households in the North and South Central Region of Bulgaria. There are four main results. First, we find evidence of a large outflow of agricultural labour from dairy farming activities and 55% of the farm households, which we interviewed in 2009 and that were supplying to a dairy processor in 2003, stopped supplying in 2009. Second, the survey results show that when asked about the main reasons for quitting, households mention the ageing of the household and health problems, but not an increase in quality regulation. Third, we find that an increase in off farm employment alternatives have contributed positively to the decrease in dairy deliveries. Fourth, we find no evidence of negative welfare implications for those farm households who stopped their commercial dairy activities.