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The Agri-Food Sector and the Greek Economy

Greece has been a member of the European Union (EU) since 1981. According to Eurostat (2016), the Greek agricultural sector contributes 3.4 % to the Gross Value Added (GVA) 13 % to total employment, while

Table 8.1 Greek versus EU-28 Agriculture's fundamentals

Key data

Indicator

Greece

EU-28

Rural population

% of total

44.1%

22.6%

Average size of agricultural holdings

Ha

6.8

16.1

Agriculture

% of total employment

12.9%

5.1%

Agriculture, hunting and fishing

% of total GVA

3.4%

1.3%

Crop output

% of total output

71.6%

55.6%

Animal output

% of total output

28.4%

44.4%

Total intermediate consumption

% of total output

56.0%

65.7%

Agricultural

products trade—Exports

% of total exports

17.8%

11.0%

Agricultural

products trade—Balance

million €

-1,154.1

4,278.2

Source: European Commission Directorate-General for Agriculture and Rural Development (2015)

the contribution of the entire agri-food sector (i.e., the agricultural sector and the “food, beverages and tobacco industry”) to the Greek economy is increasing to 7.2 % to the total GVA and 15 % of total employment. A few key figures of the Greek agricultural sector are shown in Table 8.1.

The trade balance of agri-food products in Greece is negative, although recently this trade deficit has been reduced following an improvement in the agri-food sector’s export performance. It should be noted that agrifood products are the third largest category of goods exported, with a value of €5.2 billion, accounting for 19 % of total Greek exports (Lekkos and Leventakis 2015). It should be noted that most of the agricultural trade of the country is carried out with other member states of the EU. About 80.2 % of imports and 65.6 % of exports of agri-food products in Greece are traded with EU countries (Eurostat 2016). The major products with strong quality advantage are olive oil, olives, raisins, fruits, vegetables, tobacco, tomato paste, yogurt, rice, and so on.

The strengths of the Greek agri-food sector include, among others, favorable climatic and soil conditions, a strong food-processing sector, a strong position in the Mediterranean diet products market and some mass-produced and traditional agricultural products, resilience of the agri-food sector in employment during the economic crisis, agri-food value chain importance in the economy, significant production of agricultural products and foodstuffs with protected names of quality (PDO, PGI, etc.), rich biodiversity in species, ecosystems and landscapes, agricultural activity inextricably linked with the local traditions, creating a favorable environment for the development of rural tourism.

The weaknesses of the Greek agri-food sector include, among others, small farm size and land fragmentation, regional inequalities and intrasectoral disparities, low degree of integration of innovation in the sector, imperfect system of short food supply chains, imperfectly developed system of organization of farmers, inability of producers to claim a strong role in the supply chain of agricultural products, low value added by primary production, small interface between the agri-food sector compared to other sectors, inadequate training particularly in the agricultural labor force, large percentage of farm-holders aged over 55, high production cost of agricultural products, low agricultural income compared with the European average, low labor productivity in the agricultural sector and large agricultural trade deficit particularly in certain livestock products.

The favorable demand trends for Mediterranean products offer a strong growth prospect for the Greek agri-food sector, and consequently for the improvement of agricultural income in Greece (EUAgricultural Outlook 2015) provided that some of the weaknesses identified are addressed and efficiency of the agri-food value chain is increased. Moreover, considering that the market for high-quality products is expected to expand, a significant challenge for the Greek agri-food sector is to adjust its productive model progressively toward this direction. The Greek food-processing sector, thanks to the availability of high-quality raw material and specialized expertise, presents an enormous potential for increasing agri-food production value added and exports.

 
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