Is Agriculture a Key Sector in the European Economies?

Abstract

The geography of the European Union (EU) is predominantly rural. The Common Agricultural Policy (CAP) has existed for more than 40 years as one of the most important pan-European policies. Its budget represents a large proportion of the overall EU budget and expenditure. However, few studies show the specific economic role that agriculture plays in the European economies. The main objective of this paper is to measure, through input–output methodology, the role of the agricultural sector in 10 countries of the EU and to ascertain whether this one sector can be considered a key sector. The data show that the only countries where agriculture can be considered a key sector are Belgium, Denmark, Finland, the Netherlands and Sweden. In these countries, agriculture is stimulated by overall industry growth and has a greater impact on the national economy than other sectors. In the remaining countries, agriculture may be stimulated more than other sectors by an increase in the national economy's production, but agricultural output is no more affected than other sectors.