Examination of Agricultural Income Inequality in the European Union

The significant roles of agriculture in the economic development of a country are determinative. It has already made a substantial contribution to the economic prosperity of advanced countries. Its role in the economic development of less developed countries is of vital importance. The share of the population working in agriculture is declining as countries develop. While less than 5% of the population does in rich countries work in agriculture, more than two-thirds of the people in poor countries. It is predominantly the huge productivity increase that makes this reduction in labor possible. The aim of the study is to provide a comprehensive picture of the situation of agriculture in the European Union from 2010 to 2019, with a particular focus on agricultural income and labor force developments. The number of employed in agriculture has decreased globally (by almost -14%) and in the European Union (by nearly -19%). The added value of agriculture has grown at a similar rate worldwide (by almost +22%) and in the European Union (by almost +23%). Indicators of agricultural income showed indicator A an increase of 25.56%, indicator B 39.11% and index C 20.39% in 2017 compared to 2010. In 2019 the gross value added in agriculture was the most significant in Germany, Spain, France, and Italy. Together, the four countries accounted for 42% gross value added in agriculture of EU-28. Indicator A, B and C of agricultural income showed in 2019 the most significant positive change in Bulgaria, in Denmark and Romania. Employment in agriculture was the highest in Poland and Romania in 2019. Several reasons can explain the differences in the development of agricultural performance in each European Union country. These reasons can be grouped. On the one hand, the location varies from country to country. Due to their different locations, their climatic, natural and ecological conditions are different. Another important difference is the size of the states. On the other hand, the structure and organization of society are different. Thirdly, the economic situation and status of each country are different.

Keywords: Agriculture, Labor, Income, Inequality, European Union.


Introduction
In recent decades, the population on Earth, at the same time, their needs have started to grow exponentially. Agriculture must keep pace with this growth to ensure the right quantity and quality of food and raw material production. Both natural endowments and social order influence productivity. The aim of the study is to provide a comprehensive picture of the situation of agriculture in the European Union from 2010 to 2019, with a particular focus on agricultural income and labor force developments. Agriculture plays a crucial role in the economy of developing countries, and provides the main source of food, income and employment to their rural populations. According to FAO (2000), it has been established that the share of the agricultural population in the total populace is 67% that agriculture accounts for 39.4% of the GDP and that 43% of all exports consist of agricultural goods. It has become increasingly evident in the last few years that the conception of both economist and policymakers regarding the role of agriculture in economic development has undergone an important evolution. Roughly one quarter of the Earths terrestrial surface is now under cultivation with more land converted to crop production in the 30 years after 1950 than in the previous 150 years. In many regions, including Europe, North America, Australia and recently Brazil, China and India-humanity has also become skillful at raising yields through using inputs like fertilizers, pesticides and organic manures. Yet in many poorer countries with low productivity rates and growing populations, agriculture continues to expand into marginal and fragile lands. In much of sub-Saharan Africa and large parts of Asia − according to estimates compiled by the Millennium Ecosystem Assessment (MEA) − almost no highly productive land is left. However, improvements in agriculture and land use are fundamental to achieving food security, poverty alleviation and overall sustainable development. Agriculture in the United States is becoming increasingly trade oriented and trade sensitive. Agricultural trade issues are seen to be much more complex now compared to earlier days. Since the mid-1980s, the value of the dollar has been falling on world currency exchanges and few people (including economists) agree on whether this is good, bad, or no big deal. Congress recently ratified two important trade agreements, the North American Free Trade Agreement (NAFTA) and the Uruguay Round agreement negotiated under the auspices of the General Agreement on Tariffs and Trade (GATT). However, arguments continue over who will win and who will lose under these new trading rules. Fifty years ago, the United States was the largest agricultural exporter, doing about $3 billion in sales per year. Six of its top ten customers were in Western Europe; two more − Japan and Canada also were developed countries; India, a food aid recipient, and pre-Castro Cuba were the only developing countries that were major markets (Khanna and Solanki, 2014).

Literature Review
Role of Agriculture in Economic Development. The significant roles of agriculture in the economic development of a country are as follows: ➢ In the process of economic development of a country, the agricultural sector plays a strategic role. ➢ It has already made a significant contribution to the economic prosperity of advanced countries. ➢ Its position in the economic development of less developed countries is of vital importance.
The role of agriculture in the development of the economy is shown in Figure 1. So, agricultural development is a must for the economic development of a country. As well the developed countries emphasize agricultural development. Agricultural progress is essential: ➢ to provide food for growing non-agricultural labor force; ➢ to raw materials for industrial production; ➢ to save and tax revenue to support the development of the rest of the economy; ➢ to earn foreign exchange; ➢ to provide a growing market for domestic manufactures (Praburaj, 2018).
The share of the population working in agriculture is declining as countries develop. Namely, while less than 5% of the population does in rich countries work in agriculture, more two-thirds of the people in poor countries. It is predominantly the huge productivity increase that makes this reduction in labor possible. Since 1950 we see an overall decline in agricultural employment to comparably low levels of work today (https://ourworldindata.org/employment-in-agriculture). Poverty and agriculture. The growth rates of world agricultural production and crop yields have slowed in recent years. It has raised fears that the world may not be able to grow enough food to ensure that future populations are adequately fed. However, this slowdown has occurred not because of shortages of land or water. The demand for agricultural products has also slowed. It is mainly because world population growth rates have been declining since the late 1960s. Reasonably high levels of food consumption per person are now being reached in many countries, beyond which further rises will be limited. But it is also the case that a stubbornly high share of the world's population remains in absolute poverty. So lacks the necessary income to translate its needs into sufficient demand. The growth in the agricultural sector plays a crucial role in improving the profits of poor people by providing farm jobs and stimulating off-farm employment (FAO, 2002).
Few theoretical propositions are more controversial in the literature on income inequality than the ideas of Simon Kuznets (1955). Income inequality increases during the early stages of industrialization, according to Kuznets, as a small segment of the labor force is employed in the industrial sector. As workers continue to migrate to the higher-wage parts of the national economy, however, these lofty levels of inequality eventually decrease. Perhaps most controversially, based on these observations, Kuznets would famously assert, albeit, with some personal skepticism and doubt, that income inequality would decline into the foreseeable future with further economic development and industrialization.  Figure 2 shows a stylized illustration of the cycle of inequality hypothesis with three trends of relevance for the distribution of national income. The left-hand side depicts the agricultural-industrial transition from the mid-1800s to the mid-1900s that occurred in rich countries.
Observable here is the classical Inverted-U pattern of rising inequality. During the nascent stages of industrial development, the broken line, and the eventual decline of difference with the maturation of this process. It is the definite trend that Kuznets saw in the data during the mid-1900s. It is important to note that this timing is a generalization that only applies to Western countries. Other wealthy nation-states experienced these transitions at a much later point in time. The top of Figure 1 shows the general shift from a good-to a serviceproducing economy. This shift to a service-producing economy is what, in turn, stimulated a renewed upsurge of income inequality in postindustrial societies. The mid-to late-20th century is defined by the migration of labor out of industry toward the labor-intensive service and knowledge sector. But equally drastic during this time is the outflow of workers from agriculture (Kwon, 2014).

Figure 2. Employment transitions and the cycle of income inequality
Source: Kwon (2014) Agriculture in the World. Figure 3 shows

Methodology and Research Methods
The aim of the study is to provide a comprehensive picture of the situation of agriculture in the European Union from 2010 to 2019, with a particular focus on agricultural income and labor force developments. Table 1 summarizes in the study examined databases and indicators, as well as analysis instruments and methods. Data from Eurostat, the Food and Agriculture Organization and the World Bank were used. The study examined three indicators, which are: agricultural value added, agricultural income, and employment in agriculture. Analysis instruments were the Excel program and GRETL software. Time series and cluster analyzes were used.  Results Table 2 shows the number of farms and the utilized agricultural area (hectare) in the European Union. According to the latest data (2016), the number of farms in the European Union is close to 10 500 000. The utilized agricultural area is more than 173 000 000 hectares.  Figure 6 shows the average economic size of the farm holding sin European Union in 2016 (EU-28=100, based on the average farm's standard output to the EU-28 average, by NUTS 2 regions). There were 64 regions across the EU where the average standard output per farm was at least five times as high as the EU-28 average (at least EUR 174 000). It is shown by the darkest shade in Figure 6. These regions were in Germany, the Benelux Member States, the United Kingdom, France, and Czechia. In the Netherlands (eight), in Germany (six) and Denmark (one) were the average farm size was at least ten times as high as the EU-28 average. In Zuid-Holland, the region had the highest level of standard output per farm (EUR 680 700). It was nearly 20 times the EU-28 average (Eurostat, 2019).     Table 3 summarizes the main examined indicators in the study in EU-28 member states. The values of the examined indicators were divided into four clusters. The largest possible value of the clusters was marked with an increasingly darker color. The gross value-added in agriculture was the most significant in Germany, in Spain, France, and Italy. Together, the four countries accounted for 42% gross value added in agriculture of EU-28. Indicators A, B and C of agricultural income showed the most significant positive change in Bulgaria, Denmark, and Romania. Employment in agriculture was the highest in Poland and in Romania in 2019.

Conclusions and Discussions
The number of employed in agriculture has decreased globally (by almost -14%) and in the European Union (of nearly -19%). The added value of agriculture has grown at a similar rate worldwide (by almost +22%) and in the European Union (by almost +23%). Indicators of agricultural income showed in 2017 compared to 2010: On the one hand, the location varies from country to country. Due to their different situations, their climatic, natural and ecological conditions are different. Another critical difference is the size of the states. On the other hand, the structure and organization of society are different. Thirdly, the economic situation and status of each country are different.
Funding. There is no funding for this research.