Agriculture in Greece falters despite economic upswing and increased investment – FreshPlaza

Report on the State of Greek Agriculture and its Alignment with Sustainable Development Goals

Executive Summary

An analysis of the Greek agricultural sector reveals a persistent downward trend in production value and labor productivity over the past three decades, despite a post-crisis revitalization in the broader economy. This trajectory presents significant challenges to achieving several Sustainable Development Goals (SDGs), including SDG 2 (Zero Hunger), SDG 8 (Decent Work and Economic Growth), and SDG 9 (Industry, Innovation, and Infrastructure). Key impediments include structural inefficiencies, underinvestment, rising input costs, and socio-economic pressures contributing to rural decline. While specific sub-sectors like fruit production show positive growth, the overall foundations of Greek agriculture remain fragile, necessitating targeted policy interventions to foster sustainable and resilient development.

Sector Performance and Economic Context

Production and Economic Trends

Despite a recovery from the 2020-2021 pandemic-related crisis, the Greek economy has not returned to its pre-2008 peak. This stagnation is mirrored in the agricultural sector, which faces challenges that undermine progress towards SDG 8 (Decent Work and Economic Growth) and SDG 2 (Zero Hunger).

• Total agricultural output has demonstrated a negative trend over the last 30 years, with an average annual decline of 0.3%.
• The value of agricultural production remains below 2008 levels.
• Cultivated farmland has decreased by 22.1% over the past five years.

Within this context, the fresh produce sector shows a divergent path:

1. Fruit Production: The value of fresh fruit production has grown significantly since 2010, reaching €3.615 billion in 2022 (27.9% of total agricultural production value).
2. Vegetable Production: In contrast, the production value of vegetables has declined, settling at €1.837 billion in 2022 (14.2%).
3. Exports: The value of fruit and vegetable exports has steadily increased, accounting for 36.5% of total agricultural exports in 2023.

Labor Productivity and Decent Work (SDG 8)

A primary concern is the decline in labor productivity, which directly impacts the viability of rural livelihoods and the goal of achieving decent work for all. Since 2020, the sector has experienced:

• A sharp fall in gross value added per person employed, reaching a fifteen-year low of €13,465 in 2023.
• An average annual decline rate in labor productivity of 0.42%.
• An increase in agricultural employment to 461,400 people (11% of total employment), indicating that more labor is generating less value.

Impediments to Sustainable Agricultural Development

Underinvestment in Innovation and Infrastructure (SDG 9)

The sector’s lagging performance is heavily linked to insufficient investment, hindering progress on SDG 9 (Industry, Innovation, and Infrastructure). The period from 2010 to 2021 was characterized by a depletion of capital stock, with cumulative losses exceeding €94 billion across the economy. This has resulted in:

• Limited investment in modern technologies and low R&D activity.
• A significant lag in adopting innovations associated with the Fourth Industrial Revolution.
• A sharp drop in agricultural investment after 2008, with a slow and incomplete recovery.

Structural Inefficiencies and Land Use

A fundamental structural barrier to achieving economies of scale and promoting responsible production under SDG 12 (Responsible Consumption and Production) is the nature of land holdings.

• The average utilized area of Greek farms was only 5.3 hectares in 2020, with a downward trend.
• High fragmentation leads to inefficient capital allocation, with overinvestment in basic, often second-hand, equipment and underinvestment in modern and supplementary technologies.
• This structure prevents the optimal utilization of capital and undermines productivity growth.

Rising Input Costs and Energy Transition Pressures (SDG 7 & SDG 12)

The financial sustainability of farms is increasingly threatened by rising input costs, complicating efforts towards SDG 7 (Affordable and Clean Energy) and SDG 12. The share of intermediate consumption in the total value of agricultural output rose from approximately one-third in 2003 to over half by 2022. This is driven by:

1. Increased global costs for fertilizers and pesticides.
2. Higher domestic energy prices following an EU-driven transition away from cheap lignite to more expensive renewables and imported natural gas.
3. The shift from cheaper Russian gas to more expensive U.S. imports, further elevating energy costs for producers.

Socio-Economic Challenges and Rural Decline (SDG 1, SDG 10, SDG 11)

Broader economic pressures have eroded the social fabric of rural areas, working against SDG 1 (No Poverty), SDG 10 (Reduced Inequalities), and SDG 11 (Sustainable Cities and Communities).

• Cuts in social spending have led to the understaffing and closure of essential rural facilities like health units and schools.
• Underfunding persists for critical agricultural infrastructure, including irrigation and rural roads.
• These factors, combined with the harsh nature of farm work, contribute to rural depopulation, an aging farmer population, and labor shortages.

Policy Framework and Equity Concerns (SDG 10)

Dependency on Subsidies

The income of Greek farmers is heavily dependent on EU subsidies through the Common Agricultural Policy (CAP). However, the current framework raises concerns related to SDG 10 (Reduced Inequalities). Farmer organizations argue that the CAP’s model, which allocates funds based on land ownership rather than production, favors large landowners over small, active producers. This system risks pushing small farmers toward financial exhaustion, exacerbating inequality within the sector. Furthermore, accumulated payment delays from the state place additional constraints on small producers.

Conclusion

The Greek agricultural sector is at a critical juncture. While the growth in fruit production offers a positive signal, the overarching trends of declining productivity, structural inefficiencies, and socio-economic pressures threaten its long-term sustainability. Without strategic interventions to modernize infrastructure, promote equitable policies, improve productivity, and revitalize rural communities, the sector’s ability to contribute to the Sustainable Development Goals will remain severely compromised. The foundations for growth are fragile and require a comprehensive policy overhaul aligned with the principles of sustainable development.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 2: Zero Hunger
   • The article extensively discusses the state of Greek agriculture, including production value, cultivated farmland, and labor productivity, which are all central to ensuring food security and promoting sustainable agriculture.
2. SDG 8: Decent Work and Economic Growth
   • The article’s focus on Greece’s overall economic performance, GDP levels, declining labor productivity in agriculture, agricultural employment, and the value of agricultural production directly relates to this goal’s aim of promoting sustained, inclusive, and sustainable economic growth and productive employment.
3. SDG 9: Industry, Innovation and Infrastructure
   • The text highlights insufficient investment in capital, lagging adoption of modern technologies, low R&D activity, and underfunded agricultural infrastructure (like irrigation facilities and rural roads), which are key components of SDG 9.
4. SDG 7: Affordable and Clean Energy
   • The article discusses Greece’s energy transition away from lignite towards renewables and natural gas. It also addresses the economic consequences, specifically the rising energy prices and their impact on agricultural production costs, connecting to the goal of ensuring access to affordable and clean energy.
5. SDG 1: No Poverty
   • The financial vulnerability of farmers is a key theme. The article mentions that farmers’ income is heavily dependent on EU subsidies and that small farmers are being pushed toward “financial exhaustion and withdrawal,” which relates to poverty reduction.
6. SDG 11: Sustainable Cities and Communities
   • The article addresses the decline of rural areas through “rural depopulation,” the aging of the farmer population, and the closure or understaffing of critical public facilities like health units and schools. This connects to the goal of making human settlements inclusive, safe, resilient, and sustainable, including the vitality of rural communities.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers.
  • The article directly addresses this by highlighting the decline in labor productivity in Greek agriculture, with the gross value added per person reaching a “fifteen-year low of €13,465 in 2023.” It also discusses the small size of farms (“average utilized area… barely exceeded 5,3 hectares”) and the financial pressures on small producers.
• Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation.
  • This target is relevant as the article points to a “weakening of its labor productivity” in agriculture, an “average annual decline of around 0,3%” in total agricultural output, and a significant lag in the adoption of modern technologies (“Fourth Industrial Revolution”).
• Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
  • The article mentions that “agricultural infrastructure (irrigation facilities, rural roads) also remain underfunded,” directly pointing to a deficit in the kind of infrastructure this target aims to develop.
• Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
  • The article describes Greece’s energy transition, noting that “Most power now comes from renewables and imported natural gas,” and that domestically sourced lignite was “reduced to just 10% of total energy generation.” While the transition aligns with this target, the article focuses on the negative economic impact of higher energy costs on agriculture.
• Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.
  • The article implies a risk of increasing poverty among farmers, stating that the current system pushes “small farmers toward financial exhaustion and withdrawal” and that their income is “heavily dependent on EU subsidies.”
• Target 11.a: Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning.
  • The article’s discussion of “rural depopulation,” the aging of farmers, and the “understaffing or closure of critical public facilities in rural areas (health units, schools, public administration offices)” points to a weakening of rural areas, which this target seeks to address.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 2.3: Volume of production per labour unit (Labor Productivity).
  • The article provides a specific value: “gross value added per person employed has fallen sharply… reaching a fifteen-year low of €13,465 in 2023.” It also gives a rate of decline: “an average annual decline rate of 0,42%.”
• Indicator for Target 8.2: Annual growth rate of real GDP per employed person.
  • While not framed exactly this way, the article provides data points that measure this concept, such as the country’s GDP remaining “far below 2008 levels” and the specific decline in agricultural labor productivity. The “average annual decline of around 0,3%” in total agricultural output also serves as a relevant measure.
• Indicator for Target 9.1: The article implies a qualitative indicator for infrastructure quality.
  • The statement that “agricultural infrastructure (irrigation facilities, rural roads) also remain underfunded” serves as a qualitative indicator of the state of rural infrastructure. The mention of “a twelve-year process of capital stock depletion in the Greek economy” also points to a decline in the overall capital and infrastructure base.
• Indicator for Target 7.2: Renewable energy share in the total final energy consumption.
  • The article provides a specific figure for the decline of a non-renewable source: “cheap lignite… reduced to just 10% of total energy generation.” It also states that “Most power now comes from renewables and imported natural gas,” implying a significant increase in their share.
• Indicator for Target 1.2: Proportion of population living below the national poverty line.
  • The article implies this through descriptive analysis rather than a specific number. The heavy “dependen[ce] on EU subsidies” for income and the trend of small farmers facing “financial exhaustion and withdrawal” are strong indicators of economic vulnerability and poverty risk in this demographic.

4. Table of SDGs, Targets, and Indicators

Source: freshplaza.com