Farm household interactions with local economies: a comparison of two EU case study areas

Despite the emphasis given in the EU’s Common Agricultural Policy to the local economic benefits of a maintaining a strong agricultural sector, relatively little research has focussed on the interactions between farm households and their local economies. The paper presents findings from an analysis of the direct economic transactions of farm households drawn from two EU case study areas, one a transition economy with an underdeveloped agricultural sector (Podlaskie, Poland), the other a mature economy with a highly developed agricultural sector (North East Scotland, UK). The results confirm that the contribution of farm households to their immediate surrounding locality is highly context-specific and depends upon both demand and supply-side factors. With the exception of off-farm work, farm households within North East Scotland study have more distant and spatially-concentrated agricultural transactions due to the consolidation of upstream and downstream agri-businesses in the region. In contrast, transactions in Podlaskie take place far closer to the farm holding and are more spatially dispersed. The rural development and policy implications of the findings are discussed.