Indicators for the economic dimension of sustainable agriculture in the European Union
Regional Statistics, Vol. 7. No.1. 2017: 179 – 196; DOI: 10.15196/RS07110
Over the past decade, the concept of sustaina-ble development became inevitable on as-sessing economic, social, and environmental processes. Although the concept of sustainable agriculture also includes environmental and so-cial aspects, the economic facet is still im-portant for decision makers and researchers because of the increasing needs of the world- wide growing population. Moreover, the eco-nomic dimension of agriculture is also im-portant because agriculture viability and com-patibility are key determinants of its future. Consequently, we compiled an indicator system on the agricultural sustainability based on statis-tical data, which describes four dimensions of agriculture sustainability (food supply, envi-ronment, economy, and society). The indicator system consists of 44 indicators and can serve as a basis for developing composite indicators. Based on the indicator system and the compo-site indicators of the performance of EU coun-tries, this study analyses economic dimension of EU agriculture (12 indicators). The results allow spatial comparisons and monitoring de- velopment over time. The performance o Hungary in terms of the economic dimension of sustainable agriculture is then analysed in comparison with its regional competitors.
Keywords: sustainability, agriculture, composite indicators
Gábor Valkó
Hungarian Central Statistical Office Budapest, Hungary
E-mail: Gabor.Valko@ksh.hu
Mária Fekete-Farkas
Szent István University
Gödöllő, Hungary
E-mail: Farkasne.Fekete.Maria@gtk.szie.hu
Ildikó Kovács
Budapest Business School, University of Applied Sciences
Budapest, Hungary
E-mail: Kovacs.Ildiko@uni-bge.hu
Introduction
The concept of sustainable development was defined by the Brundtland report (Our Common Future), in 1987. Complementary to the Lisbon agenda, the EU adopted an equally ambitious Strategy for Sustainable Development (SDS) at the Gothen-burg Summit, in 2001, which was to underpin all EU policies and actions. However, a number of unsustainable trends have worsened since 2001
Agriculture is a special branch of the economy. Agricultural production is a na-ture-related activity, and has significant impact on the state of the environment, while also being an integral part of rural life. On one hand, it has remarkable influ-ence on rural areas and, on the other hand, it is dependent on them in many aspects. Agricultural production is multi-purpose as there are economic, environmental, and social roles of agriculture (OECD 2001, Boody et al. 2005, Rossing et al. 2007, Feher – Beke Lisanyi 2013, Królczyk et al. 2014, Huang et al. 2015). The main task of agriculture is food and fibre production, which describes both its productive or economic functions. Over the past decades, new tasks related to the economic func-tion came to the fore, including controversial biofuel production (Fekete – Farkas et al. 2011, Popp et al. 2014). The profitability and viability of agricultural activities is vital. To achieve this, the production efficiency and competitiveness of the entire sector are essential.
Earth ’ s growing population requires a large amount of surplus production of food. As such, the increase of utilized agricultural areas and/or of production effi-ciency are inevitable if consumption patterns remain unchanged. Therefore, the ef-ficiency and economic dimension of agriculture sustainability are emphasised com-pared to the sustainability of other economic sectors. Although consumption is gen-erally harmful to the environment (Kovács 2016), production and consumption of food are inevitable for life.
Indicator system of sustainable agriculture
A reliable indicator system describing sustainability becomes a pronounced re-quirement of decision-makers. Moreover, there is also an intensified expectation from the public to gain information on social and economic processes in terms of sustainability. Numerous organizations and scientific institutions have developed indicators and indicator systems that measure the performance of agriculture in terms of sustainability (e.g. MAFF 2000, INEA 2002, Valkó – Fekete – Farkas 2014). However, they are not fully adapted to Hungarian and European Union agriculture, most covering national context and not allowing spatial comparisons. These sets of indicators including numerous indicators do not provide a comprehensive picture. Consequently, there is a need for an indicator system that provides easily under-standable information even on complicated, multi-dimensional issues such as sus-tainability. Besides, agriculture-related indicators are underrepresented in the indica-tor systems for sustainable development created by the United Nations and Euro-stat.
There is a need for an indicator system that describes agricultural production of EU member states in terms of sustainability and is also capable of evaluating certain sustainability areas, thus presenting results, based on composite indicators, that are easy to communicate. This type of indicator system has not yet been developed for the EU. The indicator system presented in this study is based on statistical data and can serve as a basis for producing composite indicators describing sustainability domains. It can also compare the sustainability performance of individual countries and monitor development over time; however; it obscures regional differences with-in a country. The indicator system has been validated by Hungarian and internation-al experts with expertise in the sustainability of agriculture by filling in questionnaire aiming at the determination of the weights used for the development of composite indicators.
The theoretical framework of the indicators of sustainable agriculture in this study was built on a definition of sustainable agriculture from synthesising literature sources. The sources for the creation of the definition include: EU 2012, Farkasné Fekete et al. 2004, Kirchmann – Thorvaldsson 2000, National Research Council 2010, OECD 2001, RISE 2016, SARE 1997, Smith – McDonald 1998, Takácsné György et al. 2008, USDA 1999, Valkó – Farkasné Fekete 2014, Van Cauwenbergh et al. 2007.
The four points of the synthesised definition identified the domains of the indi-cator system, which are as follows:
– production of good quality, safe, and healthy foods; satisfaction of needs – food supply;
– conservation of natural resources, protection of the environment, creation of animal welfare – environment;
– efficiency, competitiveness, economic viability, ensuring profitability – economy;
– improving the quality of life in rural areas, social justice, and development of attractive rural landscape – society.
Discussion – Study limitations
The quality of the composite indices is influenced by the theoretical coverage of specific areas by relevant indicators supported by adequate quality basic data. For this reason, it is essential to improve the accessibility and quality of basic data for the scientifically sound examination of sustainable agriculture. An additional prob-lem in many areas is long data production time, which also needs improvement. Creating indicators at a lower territorial level is currently not possible in many areas because raw data are not available, a deficiency that could be eliminated by applying proper data collection methodologies or estimation procedures that could enable the dissemination of data at a lower territorial level
The most important difficulty related to composite indicators is the lack of their widespread acceptance. Their values can be significantly affected by the theoretical framework, scope in the indicator system, and methodology of the weight system essential for their calculation. In many cases, subjective decisions are needed for the development of an indicator system. However, the communication value and role of composite indicators in decision support are indisputable. It is necessary for a com-posite index that its methodology has appropriate political support, is laid for broad consensus, and is widely accepted.
The system of indicators and the related composite indicators in this research can support European and national agricultural policy decisions, as well as shape the Common Agricultural Policy and its components. They have a good communicating power, since the composites are easy to interpret for the general public. A distinct advantage of the indicator system is that it is suitable for the systemic tracking of changes in agricultural production, both at national and EU levels.
Conclusion
Based on a literature review, we compiled the definition of sustainability of agricul-ture, which served as a basis for the development of an indicator system for agricul-ture sustainability, based on macro data. The data for the indicators have been com-piled for the EU member countries for 2000 – 2012. Based on the indicator system, composite indicators were then developed for the domains of sustainable agricul-ture. In this study, the domain ‘Economy’ is analysed using such composite indica- tors. Spatial and temporal comparisons make it possible to overview the processes in terms of the economic dimension of sustainable agriculture in EU member coun-tries. According to the results, the composite index for ‘Economy’ had the highest values in the Netherlands and Belgium, while the lowest in Ireland, the Czech Re-public, and Slovakia in 2010. The index value increased in the EU by 11% from 2000 to 2010. Romania, Poland, and Finland had the highest growth rate, while Ire-land and Italy had the largest decrease in the EU. Hungary registered a growth rate (8%) below the EU average.
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