Forty-four years after Greece joined what was then the European Economic Community, it looks as if the €180 billion in farm subsidies fell into a giant sinkhole, failing to strengthen the primary sector or benefit the farmers, consumers and industry.
Agriculture’s gross added value fell during the first 15 years after 1981 and, after a period of ups and downs, it ended up in 2023 at 1996 levels. The number of people employed in farming dropped by a million in those 45 years and the land devoted to farming and animal husbandry declined by 19%.
The one bright spot is that the trade balance of farm products, including meat, has turned positive since 2020, after 35 years of deficits.
Data show that, despite the drop in added value at an annual 2.44% clip in the period 1981-1995, the average income per employed farmer rose 1.27% annually. This was the period of generous support and, relatively, lax enforcement: Direct income support and price support accounted for 68% of cereal production and 171% of the production of cotton. Reforms in price support and the lowering of tariffs on products from outside the EU found the agricultural sector ill-prepared to cope.
The cliched, and jaundiced, view is that farmers wasted the subsidies with lavish spending on nighclubs, known in Greek as “bouzoukia,” that proliferated in that period. Like all cliches, there is a grain of truth, but it is not the whole truth. It is also true that much of the aid to farmers was spent on brand-new tractors.
But the main problem is that the inflow of money was not combined with the planning and strategy needed to reform the sector: Also, private investment in farming kept declining. The state did not provide incentives to reverse the steady exodus from the countryside to big cities but neither did it do much to effect the consolidation of farms into larger, potentially more productive units: Fully three quarters of farms are smaller than 20 hectares, when the average farm in the EU is close to 70 hectares.