Labour costs in agriculture: comparative studySara Baiocco, Matthias Busse, Elina Cirule, Mattia Di Salvo & Karolien Lenaerts

FINAL REPORT - 15 May 2019

Ref: VS/2017/0371

Prepared on behalf of GEOPA-COPA

Table of contents1 Introduction 1

2 Methodology 2

2.1 Sample coverage 2

2.2 Survey design and strategy 3

2.3 Cleaning and data validation 4

3 The role of agriculture in the EU 6

3.1 Economic importance of the sector for the EU 6

3.2 Employment in the agricultural sector 7

3.3 Societal and environmental importance of the agricultural sector 9

3.4 Structure of the agricultural sector 10

3.4.1 Sector breakdown 13

4 Labour organisation 14

4.1 Types of employment 14

4.2 Change in demand and supply for labour 16

4.2.1 Migration and depopulation 17

4.2.2 Technological changes and alternative productions 17

4.2.3 Demand for new skills 18

5 Cross-country labour costs comparison 20

5.1 How labour costs are determined 20

5.2 Minimum and average gross wage 20

5.3 Indirect costs 24

5.3.1 Additional compensation 24

5.3.2 Social security contribution 28

5.4 Labour costs components: imaginary workers 30

6 Labour organisation 33

6.1 Types of contracts 37

6.1.1 Contracts for seasonal workers 38

6.2 The relevance of collective agreements 39

6.3 Training 40

6.4 Trends affecting demand and supply of labour 41

6.4.1 Intra- and extra-EU labour mobility 41

6.4.2 Digitalisation and automation 42

7 Conclusions 44

7.1 Minimum and average wage 44

7.2 Indirect costs 44

7.3 Labour organisation 45

7.4 Major trends 46

References 49

Appendix 51

Questionnaire 1 51

Questionnaire 2 56

List of FiguresFigure 1 Methodological framework 2Figure 2: Share in gross value added, EU28 6Figure 3: EU comparison of economic importance (agricultural gross value added share in national value

added) 7Figure 4: Agriculture employment share (FTE) 2016, all and only salaried workers 8Figure 5: Total labour force input in million AWUs 8Figure 6: Share in total farms in the EU, 2016 10Figure 7: Breakdown of farms by size (measure by hectares), 2013 11Figure 8: AWUs by farm size (hectares) 12Figure 9: Share in EU agricultural gross value added, 2017 12Figure 10 Distribution of AWUs ( labour force directly employed) by type of farming, 2016 13Figure 11: Types of labour in agricultural holdings 14Figure 12: Share of different types of labour in agricultural holdings in the EU28 (AWU) 14Figure 13: Share of different types of labour in agricultural holdings in the EU28, by country (AWU) 15Figure 14: Share of full-time and not full-time workers in agricultural holdings (AWU) 16Figure 15: Evolution of the area fully converted or in conversion to organic farming in EU28, 2012-2017 (Ha)18Figure 16: Participation rate in education and training in agriculture, forestry and fishery vs all sectors in

EU28 (%) 19Figure 17 Determination of minimum wage 20Figure 18 Determination of social security contribution costs 20Figure 19: Minimum and average gross wages per hour for all workers 21Figure 20: Comparison of minimum and average gross wages by type of worker 22Figure 21: Percentage of countries that have wage differentiation according to the performance of the

worker 24Figure 22: Expenditure on overtime bonuses and work done during weekend and public holidays, all workers

26Figure 23 Minimum number of days of annual leave and days of public holiday – all workers 27Figure 24 Expenditure on annual leave and public holidays, average wage per hour not worked – all workers

27Figure 25: Average expenditure on social security contributions for all workers 29Figure 26: Share in total social security contributions by type of contribution 30Figure 27: Labour cost of the four imaginary workers 31Figure 28: Share of employment in agricultural sector in total employment 33Figure 29: Types of employment as a proportion of the total employment in agriculture 34Figure 30 Average working hours and overtime hours by week, permanent and seasonal workers 35Figure 31 Maximum number of working hours (ordinary and overtime) per week – all workers 36Figure 32 Minimum number of rest days per week – all workers 36Figure 33 Share of foreigners in agriculture overall labour force 41

List of TablesTable 1 Sample coverage 3Table 2 Percentage difference between sectoral wages and wage for the full agricultural sector – Minimum

wage 23Table 3 Percentage difference between sectoral wages and wage for the full agricultural sector – Average

wage 23Table 4 Wages in kind – permanent workers 25Table 5: Additional leave covered by employers – all workers 28Table 6 Profiles of the four imaginary workers 30Table 7 Incidence of indirect costs on overall labour cost – the case of the four imaginary workers 32Table 8 Most common types of contract across sectors – the case of Finland 37Table 9 Training providers in the agricultural sector 40

List of BoxesBox 1 Annual Working Units as measure of the workforce in agriculture 7Box 2 Sectoral wages –Differences with wages for the full agricultural sector 22Box 3 Type of employment as proportion of total employment – sectoral examples 34

List of AcronymsAES Adult Education SurveyAWU Annual Work UnitCAP Common Agricultural PolicyCEE Central-Eastern EuropeDG Directorate-GeneralEFFAT European Federation of Agriculture UnionsEU European UnionFSS Farm Structure SurveyFTE Full-Time EquivalentGEOPA-COPA Employers’ Group of Professional Agricultural OrganisationsLFS Labour Force SurveyNWE Northern-Western EuropeSE Southern Europe

Foreword: Statement of Geopa-Copa Geopa-Copa, the Employers’ Group of Professional Agricultural Organisations in the European Union considers that apart from the research independently carried out by the Centre of European Studies, political recommendations must be put forward towards a more fruitful social dialogue.

Preliminarily, Geopa-Copa emphasizes the invariable importance of the sector when it comes to occupational levels in rural areas and in social protection of workers.

Geopa-Copa believes that greater justice in the food supply chain towards balanced powers between agricultural producers and retail food and food processing industry, would help to increase the primary sector revenues and further development of employment.

1. Minimum wages

As the report shows minimum wages are decided at national level by legislation or by collective agreements. This kind of variation between member states indicates differences in labour market systems and allows take into account national circumstances, traditions and reinforce the role of social partners.

In the future Geopa-Copa sees it necessary that wage setting, including minimum wages, continue to be determined at national level.

2. Productivity and wages

Geopa-Copa project was focused on labour costs which includes wages and other employment costs. Wage levels in a sector are highly depending on productivity and profitability in that sector. Agriculture as a part of food chain is under permanent pressure from international competition and demands set by trade and food industry. This kind of unfavourable situation for a long period of time has pressed agricultural prices which results in low profitability and productivity at enterprise level. Low productivity and profitability have a straight connection to employers’ capacity to pay wages.

Geopa-Copa sees that increasing productivity and promoting its position in primary production in the food chain leads to better possibilities to increase employment in agricultural sector and to stand up to global competition.

3. Foster the role of social partners

The extent and historic influence of collective bargaining in agricultural sector varies in the different EU member states. Sectoral social partners at national level are the best positioned to recognize sectoral features and conditions (e.g. seasonal work) which have influence on conditions of employment relationships. Through collective bargaining and collective agreements employers and employees can agree on flexible solutions concerning (e.g. working time arrangements which benefits both employers and employees in agricultural enterprises).

Geopa-Copa promotes and supports social dialogue and collective bargaining at national level in all member states.

4. Social security costs

As the report shows social security costs create an essential part of employment costs. Social security costs mainly include salaries paid for non-working time and other contributions which cover costs of employee’s pension, sickness and injury. The social security systems vary considerably between member states and include both private and public organizations and stakeholders.

Geopa-Copa emphasizes the importance of the national structures in the determination of social security contributions.

Geopa-Copa calls for social contributions to be maintained at a sustainable level for agricultural employers.

Geopa-Copa believes that the simplification of the administrative burden is strategic for the agriculture sector and its employment.

5. Skills

Increasing skills’ upgrading is the best way to improve productivity, to promote generation renewable and the mobility of workers.

Geopa-Copa calls for further synergies between EU funds to support training centres for skills upgrading in the agriculture sector towards more and better jobs, growth and competitiveness of the sector.

Cohesion Policy cannot be sacrificed to the detriment of other EU policies. Geopa-Copa does not accept a reduction of the European Social Fund due to its importance for increasing skills, qualification and productivity in the agriculture sector.

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1 IntroductionThe agricultural sector differs significantly from the other sectors of the economy: agro-food production is in fact, by its very nature, highly seasonal. In addition to that, adverse weather conditions, either prior or during the harvesting season, can impinge significantly on the level and quality of production. These factors affect employers’ demand for workers – and thus the labour structure of the sector – making agricultural production heavily dependent on labour market flexibility. The extensive employment of seasonal workers in the EU on one side, and the labour force composed for three-quarters by holders and family members on the other side, are the exemplifications of the work flexibility necessary for the success of the sector. Due to these intrinsic characteristics, data collection on labour costs in agriculture is very challenging. Cross-country differences in types of production, worker (e.g. permanent, temporary) and sector (e.g. fruit, horticulture) generate further complexity in collection of data and their harmonisation at EU level.

Within this context, this project funded by the European Commission aims at shedding some light on labour costs in agriculture, investigating its components (e.g. gross salary, in-work time, remuneration of overtime, social security contributions) across the geographical, type of worker and sectoral dimensions. This study is the natural follow-up to the project “Employment in European Agriculture: Labour Costs, Flexibility and Contractual Aspects” carried out in 2013/14.1 Drawing upon evidence collected through a questionnaire with employers, the previous study provided a first overview of the differences in labour cost across countries; yet, due to scope and time limitation, the analysis could not go into details, particularly of the single components of overall labour costs.

To enhance the level of detail of the analysis, this study draws upon two separate questionnaires targeting both quantitative and qualitative aspects of labour costs and organisation differentiating, whenever possible, across all three dimensions of interest (i.e. countries, type of worker and sector). In-depth desk research, follow-ups for clarification of information provided in the questionnaires and interviews with relevant stakeholders complement the methodological approach, enhancing the quality of results. The evidence provided in this study is not claimed to be representative of the entire European agricultural sector; yet, they cover major countries in terms of total Annual Work Units (AWUs) in agriculture and represent a valuable starting point to build up a database through follow-up surveys.

The remainder of the study proceeds as follows. Section 2 describes in more detail the methodology applied. Based on publicly available information, Section 3 reports the analysis of the agricultural sector and its role for European society. Section 4 expands the sector analysis focusing on the labour organisation of the sector in terms of types of employment and factors affecting demand and supply for labour. Sections 5 and 6 report the analysis of information collected throughout the two questionnaires submitted to relevant national organisations of employers. The direct and indirect cost components of labour in agriculture are reported in Section 5, while Section 6 addresses more qualitative aspects related to labour organisation, such as the most common types of contracts, training of employees and employers and new trends affecting the demand and supply for labour. Section 7 closes the report with conclusions based on the results of the study.

1 IW (2014).

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2 MethodologyThe methodological framework of the project builds on three pillars (Figure 1): two surveys submitted to national organisations of employers; public data on the overall sector, and specifically on cost of labour; and existing literature on differences in cost components across different dimensions. The combination of these three distinct types of input allowed for cross-validation of information gathered along the project. In fact, despite the two surveys being the main input of this study, whenever needed, answers were triangulated with publically available data (e.g. Eurostat) or further validated by means of existing literature and official documents (e.g. regarding most common contracts, or training). In addition, ongoing exchanges with respondents of the two questionnaires served to address doubts on interpretation of single answers on the one hand, and, on the other, to harmonise the information collected and thus check consistency across similar countries.

Figure 1 Methodological framework

2.1 Sample coverage

The identification of a heterogeneous sample, yet segmented in homogenous groups, helped harmonise results and identify major differences between geographic areas. By means of the broad network of national employer associations within GEOPA-COPA, this study was able to rely on a sample covering 19 European member states and accounting for approximately 75% of AWUs produced by salaried workers and 66% by non-salaried workers in the EU in 2017 (Table 1). Of these 19 countries, all responded to at least one of the two questionnaires of the study. The countries covered also give a well-balanced representation of the three main European geographic areas, with seven belonging to Northern-Western Europe (NWE), eight to Central-Eastern Europe (CEE) and four to Southern Europe (SE). Countries within these three distinct sub-groups share similar characteristics in macroeconomic terms (e.g. income per capita) as well as for the composition of the agricultural sector (e.g. farm size, market segments), and this allowed the research team to better identify possible outliers and cross-validate answers with those of respondents with similar characteristics. This process of triangulation of information collected was especially important for questions addressing complex labour cost items, the answers to which exhibited a significant variation.

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Table 1 Sample coverage

Country Country Label

Geographic Area *

% AWUs in EU28, 2017(Salaried)

% AWUs in EU28, 2017

(Non-Salaried)

1st

questionnaire

2nd

questionnaire

19 74.6% 66.1% 18 18Austria AT NWE 0.7% 1.4% Belgium BE NWE 0.5% 0.7% Bulgaria BG CEE 3.2% 2.3% Croatia HR CEE 0.6% 2.3% Cyprus CY SE 0.3% 0.2%

Czech Rep. CZ CEE 3.0% 0.4% Denmark DK NWE 1.1% 0.4% Finland FI NWE 0.7% 0.8% France FR NWE 11.3% 6.6%

Hungary HU CEE 5.5% 4.1% Ireland IE NWE 0.5% 2.1%

Italy IT SE 14.5% 10.9% Latvia LV CEE 0.7% 0.8%

Lithuania LT CEE 1.6% 1.5% Poland PL CEE 6.9% 21.5%

Portugal PT SE 2.9% 2.4% Slovenia SI CEE 0.2% 1.0%

Spain ES SE 19.3% 6.2% Sweden SE NWE 0.9% 0.5%

Note: *Northern-Western Europe (NWE): Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Sweden, the UK; Southern Europe (SE): Cyprus, Greece, Italy, Malta, Portugal, Spain; Central-Eastern Europe (CEE): Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia.

2.2 Survey design and strategy

In order to expand on evidence collected with the previous study,2 this analysis draws upon information from two separate questionnaires: the first one focuses on the structure of labour costs components, while the second one on labour organisation and major trends affecting demand and supply of labour.3

Hence, whereas the first questionnaire provides mostly quantitative information, the second one utilises more open-ended questions to collect country-specific insights that might help in understanding differences in labour costs among respondents.

The design of the two questionnaires and implementation of the two surveys were a product of several meetings with the steering committee and continuous exchanges between the research team and contact points within GEOPA-COPA. Overall, throughout the project, the steering committee met seven times and organised three seminars, of which the last one was key, as it discussed the conclusions and

2 IW (2014).3 See the Appendix for both questionnaires.

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recommendations with relevant stakeholders. Each of the two questionnaires, in fact, had been first discussed, drafted and approved in the context of a steering committee meeting; afterwards, preliminary results were presented during a seminar with experts and other members of GEOPA-COPA in order to collect comments and impressions. Information collected during the seminar was then taken into consideration to adjust the design of the questionnaire during the following steering committee meeting. Feedback collected during one seminar, for instance, helped tailor the question related to labour cost components of four ‘imaginary’ workers with specific personal and professional characteristics. More detailed instructions were added to the question in order to harmonise responses across countries, specifying what to exclude in the computation of labour costs (e.g. social security contribution) as well as how to consider overtime and rest days.

This ongoing process led to detailed questions, especially for quantitative elements of the analysis, for which the information requested was always highlighted, units of measurement stated, and explanatory notes provided when necessary. In order to collect as many insights as possible from each respondent, answer grids were designed to include all combinations between the two dimensions investigated in the study: type of worker (e.g. permanent, seasonal) and sub-sector (e.g. fruit, horticulture). In this way, respondents could reply to the best of their knowledge and fill in, whenever possible, specific estimates in addition to the general one valid for the overall agricultural sector and a generic worker. Nonetheless, while for specific questions enough information was available to present meaningful comparisons for the type of worker dimension, information on the sub-sector dimension tended to be limited for the majority of questions.

Finally, to further encourage participation, both questionnaires were translated into the six working languages of GEOPA-COPA. This also limited misinterpretation of questions, specifically regarding technical terms, and thus enhanced the quality of the answers provided.

2.3 Cleaning and data validation

Besides validating the clarity and accuracy of survey questions, the workshops held throughout the project provided an occasion to present and test preliminary results based on the first responses collected. Relevant experts and stakeholders of the agricultural sector had several opportunities to comment on results, and their interpretation, as well as to suggest solutions on how to deal with country-specific aspects during consolidation of results. This process was further supported by the seven meetings between the research team and the steering committee, which allowed for an ongoing validation of results as well as acknowledgement of data limitations throughout the study.

Quantitative answers were harmonised by applying constant conversion keys to produce meaningful comparisons. This was especially the case regarding standardisation of units of measurement and conversion from national currencies to euros when necessary. In most cases, for instance, figures provided on labour cost components had to be scaled down to per hour terms, also taking into account possible differences in working hours across the sector and type of worker dimensions. For conversion into euros, the average of the exchange rates for the year 2016 were applied.

As regards the time dimension, respondents were asked to provide information for the last year available, so as to come up with as an up-to-date analysis as possible given the availability of data. Each question required specifying the year of reference, which coincided with 2016 in most cases, as well as the data source. These two additional pieces of information helped the research team to further validate answers, for example by comparing, whenever possible, the estimates provided with the previous years’ values accessible through the data source indicated by the respondent.

Last but not least, requests for clarification helped take into account countries’ differences in the harmonisation process as well as to validate estimates and address mistakes of misinterpretation of questions. More specifically, the research team asked for clarifications in two cases: if a first reading of answers cast doubt on the magnitude of estimates provided for which no unit of measurement was specified, and if outliers emerged after triangulation with other responses, especially with those of

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respondents with similar characteristics (e.g. geographic area). Requests for clarification were sent out in a written form and followed-up with a phone call when needed, or meetings in person when possible.

Even though different tools for validation and harmonisation of answers were applied, it is important to underline existing caveats. First, since answers were submitted for nineteen countries,4 this analysis does not have the ambition of providing a full picture of the entire labour cost structure of the European agricultural sector while covering all existing differences among member states. In addition to the partial country coverage, the lack of information for the specific combinations between the sub-sector and type of worker dimension (e.g. permanent worker in the horticulture sector, seasonal worker in the fruit sector) did not make it possible to drill down into the specificities of the labour cost structure, particularly concerning the sub-sector dimension. Nevertheless, despite these caveats, the use of two questionnaires targeting detailed quantitative aspects on the one hand, and, on the other, including open-ended questions to gain specific qualitative insights, provided a solid basis for the analysis.

4 See Table 1, in Section 2.1.

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3 The role of agriculture in the EUThe agricultural sector remains an essential sector for the European Union. Despite the decline in its economic weight over the past decade, agriculture continues to have a crucial impact on society both in political and social terms. Being classified as a primary sector, agriculture importantly produces inputs for other sectors, thus affecting the productivity of upstream segments along the food chain and other production that relies on raw agricultural production. Therefore, while only data related to agriculture are taken into account below, it is worth bearing in mind the impact of agricultural production on theemployment and value added of other sectors that ultimately depend on inputs from agriculture.

3.1 Economic importance of the sector for the EU

The European Union has followed the well-established pattern of advanced economies in so far as it witnessed a gradual shift away from agricultural towards more industrial production and ultimately service provision. Today, the share of the agricultural sector in gross value added, a measure of economic weight, lies at 1.3%. It had been shrinking up until 2006, while, since then, the share has remained fairly stable (see Figure 2).

Figure 2: Share in gross value added, EU28

Source: Authors’ elaboration based on Eurostat data.Note: Prior to 2006 EU27 (excluding Croatia).

The declining trend holds for all EU member states but the extent and speed are very diverse (see Figure 3). For example, in Bulgaria and Romania, the share plummeted from over 10% at the turn of the century to around 4% today. The other member states already exhibited a comparatively low share of gross value added in 2000 and thus witnessed a less marked decline. Nevertheless, in several member states the economic weight remains above 2%. This is particularly the case in CEE and SE member states.

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Figure 3: EU comparison of economic importance (agricultural gross value added share in national value added)

Source: Authors’ elaboration based on Eurostat data.Note: *Data for Croatia is only available as of 2005.

However, gross value added statistics underrate the actual significance of the sector for the economy and society overall as its influence is more far-reaching, foremost on the labour market, because of the many other industries (e.g. food processing, pharmaceuticals, certain manufacturing segments, tourism, etc.) that rely on agriculture for their production.

3.2 Employment in the agricultural sector

While agriculture’s share in value added is today modest, its stake in the labour market is not. The Farm Structure Survey (FSS) of 2013 estimated that 22 million persons regularly work on a farm. In other words, the livelihoods of almost 5% of the EU population depend to some extent on the agricultural sector.

The agricultural sector is marked by its periodic peaks of labour demand during harvesting season. Consequently, the labour input is much smaller if seen in Full-Time Equivalent (FTE) terms, i.e. if a person works only half a year that person is only counted as ½ FTE worker. In agriculture, this metric is calculated as Annual Work Units (AWUs). If not stated differently by national provisions, the minimum number of annual working hours that constitute a full work year is 1800 (or 225 working days).5

Box 1 Annual Working Units as measure of the workforce in agriculture

Annual Working Units (AWUs) is the measure used by Eurostat to capture the volume of work carried out in terms of full-time labour force equivalent. In the agricultural sector, AWUs are used because many people help out on farms without being employed on a full-time basis. Indeed, for many of the people employed in agriculture, farm work only represents a minor activity. This explains why the EU’s agricultural labour force in absolute number of people is much higher than that expressed in AWUs.

Once converted into AWUs, the 22 million workers become 9.5 million full-time equivalent workers. Compared to total FTE workers in the entire EU economy, the agricultural sector still takes a share of 4.4% (Figure 4). There are however large differences across countries. In Romania, 20% of FTE

5 Eurostat Glossary: AWUs, available at: http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Annual_work_unit_%28AWU%29

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employment takes place in agriculture, followed by a group of CEE and SE member states plus Ireland with a share of around 10%. Notably, even the lowest share, which is found in the UK, is still above 1%. Yet, when considering only salaried workers, the picture changes somewhat. The two big producers in terms of both share in total EU farms as well as value added, Italy and Spain (see Section 3.4), climb the ranking with 1.7% and 2.5% respectively, above the EU average of 1.2%. On the other hand, the top two countries when all workers are considered, Romania and Greece, fall back significantly in the ranking with 2.1% and 1.4% of overall FTE employment due to salaried workers in the agricultural sector.

Figure 4: Agriculture employment share (FTE) 2016, all and only salaried workers

Source: Authors’ calculation based on Eurostat and OECD.Note: Total number of FTE workers in Bulgaria, Croatia, Cyprus, Malta and Romania are own estimates.

While the share in employment is still substantial, the trend points downwards. In the EU, the total number of AWUs has continuously declined over past two decades, from 15 million in 2000 to 9.5 million in 2017 (see Figure 5). This drop is not only driven by the demand of agricultural products and consequently labour, but also by emerging labour shortages in rural areas and a substitution of labour with capital and technology (see Section 4.2).

Figure 5: Total labour force input in million AWUs

Source: Authors’ elaboration based on Eurostat data.

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However, it would be wrong to conclude that the agricultural sector is becoming less important as a source of employment as a whole. Indeed, Figure 5 clearly shows that the decline in employment is almost exclusively due to non-salaried workers, in other words farm owners and family workers. On the other hand, AWUs produced by salaried workers remained rather constant since 2000. One explanation (picked up in Section 3.4) is that smaller agricultural producers, which are often family workers, are going out of business or are being absorbed by large producers employing comparatively more machinery than labour, raising workers’ productivity.

In view of this study, one can conclude that agriculture is still a significant employer in the European economy and even constitutes one of the largest single sectors providing jobs in some countries. Moreover, the importance of the sector is relatively stable with regard to salaried workers, which are the primary focus of this study.

3.3 Societal and environmental importance of the agricultural sector

Besides its economic importance per se, the agricultural sector serves other important objectives for the EU and its citizens, such as, for instance, food security, rural community development, and sustainable food production in terms of environmental impact.

In order to achieve these objectives, the EU supports its farmers throughout the Common Agricultural Policy (CAP), with a budget of €58.82 billion in 2018 (representing 26.6% of the overall EU budget). The greatest share of the 2018 budget went towards income support (€41.74 billion), followed by rural development (€14.37 billion) and market measures (€2.7 billion).6 The CAP went through a reform in 2013 to strengthen the competitiveness of the sector and promote sustainable farming and innovation; the reform introduced the threshold of 30% of direct payments being dependent on farmers’ compliance with sustainable agricultural practices. Yet, in June 2018, the Commission presented new legislative proposals to amend the CAP with the aim of enhancing its responsiveness in terms of challenges related to climate change and generational renewal. In brief, the Commission proposes prioritising small and medium-sized farms and encouraging young farmers on the one side, and sets higher environmental standards as well as rewards for farmers going beyond minimum requirements.7

Therefore, in terms of environmental protection, the CAP supports local production to reduce transport emissions, maintain forests and preserve biodiversity areas.

Through rural development measures, the CAP mitigates the rural-urban divide and rural depopulation. It does so by supporting modernisation of farms as well as diversification of both farming and non-farming activities. The latter are key for the long-term profitability of the sector, especially given that market-support measures helping farmers against, for instance, adverse weather conditions, represent the smallest share of the CAP. Diversification towards other gainful activities8 not only helps improve profitability, but, most importantly, increases the resilience of farmers during a crisis or slowdowns, creating other sources of income and thus ultimately increasing the stability and security of their business activities. The CAP supports diversification under the sixth priority of the rural development pillar with two types of support for farmers: a start-up aid for non-agricultural activities, and support for investments aimed at developing non-agricultural activities.9

Last but not least, European farmers achieve among the highest standards in terms of food safety and, thus, of quality in the world. Through audits and official controls, the EC enhances the level of standards compliance, while labels and certifications guarantee the quality of European products, and not only within the EU.

6 European Commission – CAP (1)7 European Commission – CAP (2).8 Gainful activities of the farm comprise all activities other than farm work, directly related to the holding and having an economic impact on the holding. “Activities directly related to the holding” means activities where either the resources of the holding (area, buildings, machinery, etc.) or its products are used in the activity. Examples of activities included are: Tourism; Handicraft; Processing of farm products; Production of renewable energy.9 European Parliament (2016).

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3.4 Structure of the agricultural sector

In 2016, there were around 10.5 million farms in the EU, of which three-quarters are located in Romania, Poland, Italy and Spain (see Figure 6). However, 4.3 million of the farms produced more than 50% of their output for their own consumption and should thus not be considered truly entrepreneurial farms and are unlikely to have any non-family employees. Once these micro-farms are removed, the country breakdown changes substantially.

Figure 6: Share in total farms in the EU, 2016All farms ‘Entrepreneurial’ farms10

Source: Authors’ elaboration based on Eurostat data.

There are large structural differences between the farm characteristics of member states. The European agricultural sector is predominantly made up of smallholdings. According to the Farm Structure Survey of 2013, 45% of farms are smaller than 2 hectares and another 33% ranges from 2-10 hectares (Figure 7).

10 Farms consuming less than 50% of their final output themselves.

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Figure 7: Breakdown of farms by size (measure by hectares), 2013

Source: Authors’ elaboration based on Eurostat data (FSS).

However, once again, the structure is very diverse across member states, with countries located in NWE (e.g. Denmark, Ireland, Finland) having considerably higher shares of large farms than those in SE (e.g. Greece, Italy, Spain) and, especially, in CEE (e.g. Romania, Bulgaria, Hungary).

As explained before, the number of AWUs has declined in the EU. This decline was predominately driven by an exodus of small farmers that went out of business (others were merged into larger holdings). The decline in AWUs has not taken place for large agricultural producers where the labour input has remained stable (see Figure 8) while small farms below 10 hectares were responsible for most of the downward trend.

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Figure 8: AWUs by farm size (hectares)

Source: Authors’ elaboration based on Eurostat data (FSS).

Given the stark differences in the average size of farms, it is not surprising to see that those member states with most farms are not necessarily the ones with the largest share in the EU agricultural output (see Figure 9).

Figure 9: Share in EU agricultural gross value added, 2017

Source: Authors’ elaboration based on Eurostat data.

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3.4.1 Sector breakdown

Looking at the breakdown of the agricultural sector by type of farming, it emerges that half of the EU28 AWUs (considering labour force directly employed) is attributable to two categories: Grazing livestock and Field crops, with 25.1% and 24.1% respectively in 2016 (left-panel, Figure 10). Permanent and Mixed crops-livestock are the other two major categories, adding up to almost 30% of AWUs.

However, significant differences emerge among member states (right-panel, Figure 10), in line with the trends highlighted in Section 3.4. In fact, in major countries in terms of value added (e.g. Italy, Spain and France), permanent crops take the lion’s share of AWUs, ranging between 22% and 40%. By contrast, permanent crops represent only a minor part within the production of the top two countries in terms of AWUs: Poland and Romania (5% and 3% respectively). Another major difference lies in the categories mixed crops-livestock and mixed livestock: they are almost inexistent for high value added countries (especially for mixed livestock), while, taken together, they represent 25% and 33.5% of AWUs in Poland and Romania respectively.

In brief, these differences in type of farming appear to confirm the previous evidence on the substantial division of European countries in two groups: those where the majority of farms use more than 50% of their output for their own consumption and thus with a small value added (e.g. Romania), and those with majority of farms producing for business purposes only and thus with higher value added (e.g. Italy).

Figure 10 Distribution of AWUs ( labour force directly employed) by type of farming, 2016

Notes: Countries shown are those overcoming the threshold of 200,000 AWUs produced in 2016.Source: Authors’ elaboration based on Eurostat data.

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4 Labour organisationWhile acknowledging its importance in the economy, in particular concerning employment, it is worth bearing in mind that agriculture, because of its very nature, presents important specificities that impact the employment structure, the labour market dynamics and the institutional arrangements of the sector.

4.1 Types of employment

Agricultural production is subject to natural cycles. As such, its rhythms of production are regulated by seasons and are characterised by peaks of workload during the harvesting period. These rhythms lead to an inherent need for a highly flexible labour force. Very often, this need is met by a direct participation of owners and family members in the farm work. In fact, working owners and their family members represent a very significant portion of people employed in agriculture and the bulk of those working on a regular basis in the sector.

Figure 11: Types of labour in agricultural holdings

Source: Eurostat – FSS.

As mentioned above, the FSS estimated that in 2013, 22.2 million people worked regularly in agriculture in the EU-28, of which 20.2 million people were either holders or members of the holder’s family. In the same year, 76.5 % of the labour input in agriculture came from the owners and their family members and only in a few countries did these categories not represent the majority of workers in the sector (e.g. Estonia, France, Slovakia, Czech Republic),11 as shown in Figure 13.

Figure 12: Share of different types of labour in agricultural holdings in the EU28 (AWU)

11 Eurostat Statistics Explained (1).

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Source: Authors’ calculation based on Eurostat – FSS, 2013.

Figure 13: Share of different types of labour in agricultural holdings in the EU28, by country (AWU)

Source: Eurostat – FSS, 2013.

Among non-family workers, the data from the FSS distinguish between those that are employed on regular basis and those that are employed temporarily – i.e. on a non-regular basis. This distinction captured in the statistics reflects the important difference between permanent and temporary workers in agriculture. Among those working on a non-regular (i.e. temporary) basis, seasonal workers, who are particularly relevant in agriculture, are included.

Seasonal workers are a specific type of temporary workers that are recruited according to seasonal peaks of workload. These workers are employed in agriculture for activities that depend on the cycle of the seasons, which often refer to harvesting periods. On the one hand, seasonal workers are key in sectors such as agriculture to provide the necessary labour flexibility given the nature of the production, while also representing a cheaper workforce for the employers. On the other hand, because of flexible and fixed-term contracts, seasonal workers may experience unfavourable working conditions in comparison with workers in permanent employment. This is especially true for non-EU seasonal workers, for which equal treatment with nationals is not ensured across every dimension of labour organisation, as, for instance, unemployment and family benefits, tax benefits and on education and vocational training.12

To overcome these shortcomings, some countries have put in place specific contracts for seasonal workers (e.g. Belgium, Sweden, Slovenia), although no common features in these type of contracts were found at EU level. Indeed, while essentially referring always to the seasonal activities of agricultural production, even the specific definition of seasonal employment in labour law and statistics differs across member states.13

Along with seasonal work, and especially when this is not specifically regulated, other types of temporary employment are common in agriculture, some examples being occasional or casual workers.

12 EurWORK Glossary: Seasonal Work, available at: https://www.eurofound.europa.eu/observatories/eurwork/industrial-relations-dictionary/seasonal-work13 GEOPA-COPA (2016) and IW (2014).

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These types of employment are also characterised by short fixed-term contractual arrangements. Thus, while specific contractual arrangements and job tasks may differ, seasonal, occasional and casual workers are all employed on a short-term basis and only for certain periods of the year through a fixed-term contract. As showed in Figure 12, the share of seasonal workers as well as other types of temporary workers in the agricultural sector is reflected in the 8% of non-family labour force working on non-regular basis in agricultural holdings in the EU28.14

In addition to agricultural workers working only on temporary basis, among those regularly employed part-time work is common.15 Hence, workers working full-time in agriculture represent, in many countries, only a small share of the total agricultural labour force.

Figure 14: Share of full-time and not full-time workers in agricultural holdings (AWU)

Source: Eurostat – FSS, 2013.Note: The blank share to reach 100% of workers represents workers employed on non-regular basis.

4.2 Change in demand and supply for labour

The demand and supply for labour in agriculture is influenced by several trends, such as labour mobility and migration, technological change, urbanisation, as well as change in the economic structure and in the market demand for agricultural goods.

14 “Non-family labour employed on a non-regular basis are all persons other than the holder and members of his family doing farm work and receiving any kind of remuneration from the agricultural holding who did not work each week on the agricultural holding in the 12 months ending on the reference day of the survey. This category is usually seasonal work that depends on the natural development of the crops or animals e.g. labour engaged solely as fruit or vegetable pickers”. Eurostat Glossary: Non-family labour. Available at: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Farm_labour_force_-_non_family_labour15 Part-time work is meant as all work that is carried out on a regular basis throughout the year but below the 100% of number of hours per week of a full-time contract. For instance, a worker working all year long, but only four days out of five per week (i.e. 80% of a full time worker).

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4.2.1 Migration and depopulationAs discussed in the previous section, seasonality leads to sharp fluctuations in labour demand. This may result in temporary labour shortages that would cause dysfunctionalities in the agricultural labour market, and, in turn, lower production. Seasonal employment provides the flexibility necessary to address such shortages, increasingly relying on labour mobility within the EU and migration from third countries. Supported by adequate regulation, EU labour mobility and migration can increase the flexibility of labour supply needed in agro-food production.

For this reason and to provide a level playing field for the mobile workforce, the EU has adopted two directives. The Directive 2014/36/EU16 on the conditions of entry and stay of third-country nationals for the purpose of employment as seasonal workers aims to prevent exploitation and to protect the health and safety of non-EU seasonal workers, by harmonising member state laws regarding the entry, residence and certain labour rights of seasonal workers.17 Adopted in 2014, it has been transposed into national legislation in all EU countries, except for Denmark, Ireland and UK. In addition, concerning intra-EU labour mobility, the Directive 96/71/EC18 defines posted worker as a worker who, for a limited period, carries out his work in the territory of a member state other than the State in which he/she normally works. Revised in 2018, the Directive aims to facilitate the transnational provision of services, while ensuring fair competition and respect for the rights of those workers who are employed in one member state and sent to work temporarily in another by their employer. It specifically pursues fair wages and a level playing field between posting and local companies in the host country, maintaining the principle of free movement of services that is key to the Single Market.

While making sure to provide fair working conditions to all workers regardless of their country of origin, these directives and their national transpositions, as well as any other legislation put in place by member states on labour mobility and migration, may impact on the agricultural labour market in Europe and its need for flexibility.19

Labour mobility and migration, however, work in interaction with other trends that affect labour demand and supply in agriculture in Europe. Technological change, structural change of the economy and ongoing urbanisation patterns have led to continuous labour outflows from rural areas, especially as regards new generations. This has led the agricultural labour force to be on average older than in other sectors of the economy. In 2010, 33% of the agricultural labour force was younger than 40 years old (44% for total employment), 57% was between 40 and 65 years old (54% for total employment) and 10% was aged 65 years and more (compared to only 2% for total employment).20 Considering only farm managers, in 2016, one third (32%) of EU managers were 65 years old or older and only 11% were under 40 years old.21 Acknowledging the ageing of the agricultural labour force, the EU has made generation renewal one of the nine objectives of the new CAP in the proposal for a new regulation on support to CAP strategic plans.22

4.2.2 Technological changes and alternative productionsOn the labour demand side, technological change, characterised by higher employment of capital-intensive production techniques and machinery, has delivered a significant improvement in factor productivity. Such increases outpaced the slower increase in demand for agricultural and food products, leading to an overall decrease in the demand for workers in agriculture. However, higher investments in technology are expected, of which precision farming and digital agriculture are two examples. Despite the high costs that these investments entail in terms of software, data sensors and appropriate machinery,23 the digitalisation of agriculture is to be expected because it will help reduce the environmental impact of the sector on the one hand, and the production risks related to seasonality and

16 European Parliament and European Council (2014).17 Zoeteweij-Turhan, Margarite Helena (2017).18 European Parliament and European Council (1996).19 The Economist (2018).20 European Commission (2013).21 Eurostat (2018).22 European Parliament and European Council (2018).23 European Commission (2017).

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adverse conditions on the other, thus increasing the profitability of agricultural activities overall.24 These technological changes will also impact employment in agriculture in terms of the skills required for agricultural workers in the future.

In addition to technological innovation, alternative farming systems are an emerging trend in the EU agricultural sector, with the rise of organic farming standing out. Organic farming has increased in the last decade and expected to grow further in response to environmental challenges as well as to consumers’ demand for organic food.25

The total agricultural area fully converted (or in the process of conversion) to organic farming in the EU28 amounted to more than 12.5 million hectares in 2017.26 Since 2012, this area increased by 25% on average. While the impact on labour cost is not clear yet, this type of production also requires new skills not currently available within the existing labour force.

Figure 15: Evolution of the area fully converted or in conversion to organic farming in EU28, 2012-2017 (Ha)

Source: Authors’ elaboration from Eurostat – FSS, 2013.

In addition to organic farming, diversification of agriculture towards other gainful activities is also a trend that could impact labour demand and increase the need for skill upgrading. This transformation, as mentioned above, is being fostered by the CAP. Such activities include all activities other than farm work, directly related to the holding and having an economic impact on the holding, as for example tourism, accommodation and other leisure activities, handicrafts, processing of farm products or production of renewable energy. According to Eurostat, in 2013, 6.8% of farms in the EU declared other gainful activities, with striking differences across countries. For example, in Denmark this share is more than 60% and around 50% in Austria. On the contrary, in 14 member states, mainly in SE and CEE, this share is less than 10%, with Cyprus having less than 0.7% of farms engaged in these activities.27

4.2.3 Demand for new skillsThe ongoing changes in the agricultural production system, driven notably by rapid advances in technology and the shift to alternative production, call for new set of skills in the labour force. The agricultural workforce need re- and up- skilling, through appropriate education and training, to keep pace with the transforming production system and avoid skills mismatches and thus further dysfunctionalities in the agricultural labour market. Thus, education and training are components that will impact more and more labour costs in the sector, especially considering the current level of education.

The level of education of the agricultural workforce is, in fact, on average lower than in other sectors. In 2016, 40.7% of people working in agriculture had completed only low-level education.28 This percentage was 17.9% for the total working population. On the contrary, only 8.9% of agricultural workers had

24 Michalopoulos, Sarantis (2018) and Wolfert et al. (2017).25 European Commission (2016) and European Commission (2017).26 Considering utilised agricultural area excluding kitchen gardens.27 Eurostat Statistics Explained (2).28 As defined in the International Standard Classification of Education (ISCED).

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completed tertiary education, while the share is 33.9% for all workers. Although differences exist, this pattern is observed in all EU countries.29 While the level of formal education may say little in terms of specific skills that agricultural workers have developed, the education level is considered important with regards to lifelong learning and the capacity to undertake continuous training for up- and re-skilling in the context of changing nature of work and transformation of production techniques.30

More specifically, in the EU, the large majority of farm managers (i.e. more than 70%) have only practical experience. This share varies considerably across EU countries, ranging from a maximum of 97% in Romania to a minimum share of 2% in Italy. The shares of basic training and full agriculture training also vary significantly. However, in all countries only a minority (i.e. less than 50%) of farm managers have undertaken full agricultural training, except for Luxembourg, where this share in fact reaches 50%.31

When looking at this data, it is important to remember that they refer uniquely to managers, who, in spite of the specificities of the sector, are in principle those experiencing better conditions in the workforce. Given the temporary and part-time nature of a high proportion of agricultural employment, as discussed in the previous section, it is likely that the rest of the workforce has even lower access to training.

Indeed, according to data from the Adult Education Survey (AES) for the EU28 (Figure 16), the participation rate in education and training has been significantly lower for the agriculture, forestry and fishing sectors than for the whole economy, both for the age groups 18-64 and 25-64. For both age categories, the gap with the overall economy is about eight percentage points. Moreover, while in all sectors the participation rate has increased almost by two percentage points since 2012, the improvement is considerably smaller for the agriculture, forestry and fishing sector.

Figure 16: Participation rate in education and training in agriculture, forestry and fishery vs all sectors in EU28 (%)

Source: Authors’ elaboration from Eurostat – AES, 2017.

29 Eurostat Statistics Explained (2) 30 World Bank (2019) 31 Eurostat Statistics Explained (2)

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5 Cross-country labour costs comparison

5.1 How labour costs are determined

Depending on the legal framework in each country, minimum wages and social security contributions can be determined by law, collective agreements or by a combination of both. Figure 17 shows a more or less even distribution of countries between collective agreements (33% of respondents) and law (44% of respondents) when determining minimum wages. Among countries where wages are defined by law, the majority are CEE countries, while the opposite is true for NWE countries where collective agreements apply. SE countries, instead, are spread out across the categories, with Italian wages defined by collective agreements, Spanish by law and Portuguese and Cypriot by both.

Regarding social security contribution, instead, the picture is much more straightforward, with 83% of respondents stating that the former are determined by law (Figure 18). As it is the case for minimum wages, in France, Cyprus and Czech Republic social security contribution costs are defined by both law and collective agreements. In the Czech Republic, in particular, there is a voluntary additional contribution to social security, where collective agreements apply.

Figure 17 Determination of minimum wage Figure 18 Determination of social security contribution costs

5.2 Minimum and average gross wage

The first part of the analysis on labour cost touches on the direct component, namely minimum and average gross wage, with the former referring to the lowest wage that employers are legally obliged to pay their employees.32 Legal obligation can thus derive either from law or from a collective bargaining process: for the latter, the obligation applies only to employers and employees that joined the agreement. Yet, although the level of payment defined by collective agreements is not legally binding

32 Eurostat - Glossary, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Minimum_wage

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for those who have not subscribed to them, it is often followed by all employers and employees in the sector.

Looking at figures for all workers, countries perform according to the geographic clustering (Figure 19): NWE countries show the highest rates of hourly pay across Europe, while CEE countries the lowest. Indeed, minimum wage does not go above the €3 threshold in any of the countries located in CEE, except for Slovenia (€4.8). SE countries lie in the middle of the distribution with Portugal falling behind, being the only country with a (minimum and average) wage below €5 per hour. Overall, the gap between average and minimum wage is considerable in all CEE (e.g. Slovenia, Czech Republic) and NWE (e.g. Finland) countries.

Figure 19: Minimum and average gross wages per hour for all workers

Note: * Figures refer to permanent workers instead of all workers.

For a better overview on the differentiation of average and minimum gross wages, Figure 20 shows wages per hour across different types of workers in the agricultural sector. Two trends emerge at a first glance: first, the distribution of countries by minimum wage across these four categories largely follows the one referring to all workers, and second, that the availability of data diminishes when moving into specific dimensions, as the type of worker in this case.

Denmark is again at the top when considering permanent and specialised workers, with hourly pay being two times higher than the second placed country. The other NWE countries have minimum gross wage paid per hour to permanent workers higher than average gross wages in all CEE countries. From the lower number of respondents compared to permanent workers, it seems that specialised workers are not common in all the countries surveyed. Comparing minimum wage for two categories of workers, there are no significant differences, with some countries reporting the same amount for permanent and specialised workers (e.g. Ireland), some a higher pay for specialised workers (e.g. Hungary) and others for permanent workers (e.g. Cyprus).

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Figure 20: Comparison of minimum and average gross wages by type of worker

When looking at seasonal workers, the overall difference between minimum and average gross wage is not as large as for permanent workers, and for countries like Ireland and Portugal there is no difference between average and minimum wages. A trend can be noticed across several CEE countries, like Hungary, Lithuania, Latvia and Poland, where seasonal workers receive considerably less than permanent workers. This is particularly true when looking at average gross wages. For instance, in Poland, the average gross wage of permanent workers is 37% higher than that of seasonal workers, while in Lithuania the gap reaches 90%. On the contrary, SE countries like Portugal and Italy have higher hourly pay for seasonal than for permanent workers.

Values for posted workers are not shown due to the low response rate; however, for those countries that replied, minimum and average gross wages of posted workers are equal to those of seasonal workers.

Box 2 Sectoral wages –Differences with wages for the full agricultural sector

For a few countries, data on wages were available for some combinations of sectors and type of workers. Yet, given the heterogeneity in dimensions covered by each respondent, it is challenging to have a sound comparison across countries, but some interesting insights also arise from within-

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country differences across sectors. The two tables below show the percentage difference between the wage in a specific sector (e.g. Fruit) and the one of the agricultural sector as a whole for a given category of worker (e.g. Permanent), using minimum (Table 2) and average (Table 3) wages.

Starting with minimum wage (Table 2), for some sectors in some countries there is no difference with the wage for the entire agricultural sector (e.g. Dairy and Livestock both in Belgium and Denmark). More interestingly, however, there are differences across categories of workers. For instance, in Denmark, the minimum wage in Horticulture is higher than for the entire sector when looking at all workers together (+ 1.7%), while it is lower for workers with a permanent contract (-0.8%). Similarly, in Crop cultivation in Poland, the minimum wage is slightly higher than that for the whole agricultural sector when considering permanent workers, while the opposite is true for seasonal workers. A further example, finally, is the Fruit sector in Belgium, which is relatively more remunerative compared to the average of the agricultural sector when considering all workers, while it is less remunerative for seasonal workers.

Table 2 Percentage difference between sectoral wages and wage for the full agricultural sector – Minimum wage

BE DK PL

All workers Seasonal All workers Permanent Permanent Seasonal

Fruit 7.6% -2.1% -9.4% -9.6% 11.6% 2.4%Horticulture 11.8% 17.3% 1.7% -0.8% n.a. n.a.Wine No diff. No diff. -9.4% -9.6% n.a. n.a.Dairy No diff. No diff. No diff. No diff. -12.0% -7.2%

Livestock No diff. No diff. No diff. No diff. n.a. n.a.Crop 4.0% 9.1% No diff. No diff. 0.7% -1.3%Olive 4.0% 9.1% n.a. n.a. n.a. n.a.Other n.a. n.a. No diff -1.4% n.a. n.a.

Note: n.a. Not available information. No diff: no difference between sectoral wages and full agriculture wage.

Differences are more marked when considering average wage instead. Taking again the example of Crop production in Poland, average wages are lower than for the entire sector for both permanent and seasonal workers, despite the fact that the minimum wage for permanent workers is somewhat higher in Crop production than in the overall sector.

In terms of average wage, besides Poland, Crop production also has lower wages than the overall sector in Belgium and Denmark, while the opposite is true in Finland and Slovenia. The exact opposite applies to Horticulture, for which average wages are higher than for the overall sector in Belgium and Denmark, while lower in Finland and Slovenia. Finally, Fruit production only appears to be more remunerative than the overall sector in Poland, among the few countries for which information was available.

Finally, looking at differences between permanent and seasonal workers in terms of average wage, there are no sectoral differences in Belgium, while there are in Poland. In Polish Dairy production, in fact, whereas seasonal workers enjoy a higher average salary compared to the overall agricultural sector (+5.2%), permanent workers earn a lower average wage compared to the overall agricultural sector (-16%). In Belgium, instead, differences in average wages with the overall agricultural sector report the same indication for both categories of workers, meaning that permanent and seasonal workers both earn either less or more with respect to their own average wage in the overall sector.

Table 3 Percentage difference between sectoral wages and wage for the full agricultural sector – Average wage

BE DK FI PL SI

Permanent Seasonal Permanent All workers Permanent Seasonal All

workers

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Fruit -3.6% -3.7% -8.7% n.a. 10.7% 2.2% -20.4%Horticulture 6.2% 5.8% 4.1% -24.2% n.a. n.a. -14.7%Wine n.a. n.a. -8.7% n.a. n.a. n.a. -1.0%Dairy n.a. n.a. -8.7% -14.9% -15.7% 5.2% -2.8%

Livestock n.a. n.a. -8.7% -14.9% n.a. n.a. -9.0%Crop -6.7% -4.6% -4.7% 3.2% -16.0% -2.4% 9.4%Olive n.a. n.a. n.a. n.a. n.a. n.a. n.a.Other n.a. n.a. -8.7% 21.5%* n.a. n.a. -8.8%

Note: n.a. No available information. No diff: no difference between sectoral wage and full agriculture wage.* Other in Finland refers to Mixed production (i.e. farming and animal production).

Two thirds of respondents stated that wage differentiation according to workers’ performance is a common practice. Figure 21 shows that all NWE countries apply wage differentiation, as well as the Czech Republic, Slovenia and Hungary (among CEE countries), and Spain and Portugal (among SE countries).

In Finland, for example, different wages are paid for ‘personal-skill-addition’ that can go up to 30%. Employers can decide on different factors of importance for their enterprise and, in the first instance, wage alteration has to be estimated after 10 months from the establishment of the work relationship. In the Czech Republic, there can be wage differentiation depending on location, education level, and years of experience. Similar to the Czech Republic, Austria and Belgium acknowledge higher payments for higher qualification and experience.

Figure 21: Percentage of countries that have wage differentiation according to the performance of the worker

5.3 Indirect costs

5.3.1 Additional compensationThe first type of indirect costs that were considered in the questionnaire are wages in kind. Five types of compensation that employees receive along with wages are recognised (Table 4). Accommodation is covered in the majority of countries surveyed in this study, while payment of goods and services for

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private use are only covered in the Czech Republic and Finland. Reimbursement for car and transport in general as well as for meals are the two other most common categories after accommodation.

In addition, the majority of respondents highlighted how wages in kind do not differ significantly across categories of workers, especially comparing permanent workers with all the others. Yet, a few exceptions apply. For instance, in Belgium, accommodation is only provided directly by the employer to permanent workers, and foreign seasonal workers who benefit from a specific system applying to this workers category.

Table 4 Wages in kind – permanent workers

Accommodation

Car / Transpo

rt

Goods and

services MealReimbursement

Difference between permanent and other types of workers

(i.e. seasonal, specialised, posted)

AT Same for seasonal workers, no info on other types

BE

No accommodation for other types of workers, except for foreign seasonal workers as there is a specific system foreseeing accommodation

CZ Same for all types of workersDK Same for all types of workersES Same for all types of workersFI Same for all types of workersFR Same for all types of workersIE Same for all types of workers

IT Same for specialised workers, NA other types

LV Same for seasonal workers, NA other types

PT Same for seasonal and specialised, NA other types

SI Same for all types of workers

While it was relatively easy to identify the types of wages in kind provided to workers, quantification of costs was more challenging. In this respect, very few respondents were able to provide any cost estimates and even fewer to differentiate them by type of worker.

Among all types, costs for accommodation were the easiest to identify: based on four respondents (all from NWE), accommodation for workers can cost employers between €90 and €200 per month, with an average cost of about €125 per month. In Denmark, costs for accommodation and meals together reach up to €430 per month.

In terms of transportation costs, comparison between the few responses collected is not possible due to the different systems applied. For instance, in Spain, employers reimburse €1.50 per day fixed plus €0.30 per km travelled by the worker. In Belgium, instead, a differentiation in cost applies depending on whether public or private transportation means are used, costing on average a reimbursement of €2.70 per day for public and €2.50 per day for private transport for a permanent worker. In the case of seasonal workers, instead, the average cost is lower than for permanent workers for private transport (€2), but higher for public transport (€3.40). In Finland, finally, the reimbursement is related to the value

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of the car/van used by the worker: for a vehicle in the age group B, the monthly cost is 1.2% of the replacement price of the vehicle plus €0.18 per km travelled.

Lastly, as concern meals, in Portugal and Finland, workers are reimbursed €4.25 and €6.50 per day respectively.

Moving to work carried out outside normal working hours, Figure 22 reports the expenditure in wage per hour for both overtime bonuses and work carried out during weekends or holidays. Overtime costs vary between €10 and €35 per hour in NWE countries, Spain and Italy. For the other SE countries and all CEE countries, overtime bonuses are paid less than €10 per hour, in Portugal dropping to €4.20.

In the majority of countries, expenditure for weekend and holiday work is higher than for overtime bonuses, with CEE countries showing the largest gap between the two cost components and NWE countries still registering the highest costs. As for overtime bonuses, in fact, Denmark and Finland are the first two countries in terms of expenditure for weekend and holiday work, followed by Ireland and Austria. Among the other geographical regions, Italy is the country with the highest expenditure for work carried out during weekend and holiday, around €12.20 per hour.

Figure 22: Expenditure on overtime bonuses and work done during weekend and public holidays, all workers

Note: * Figures refer to minimum instead of average wage. ** Figures refer to permanent workers instead of all workers.

However, in order to better understand the incidence of these indirect costs while taking into account countries’ differences, it is worth looking at the ratio of the two cost expenditures to the average gross wage. Concerning expenditure for overtime bonuses, on average, they stand at a ratio of 1.25-1.27 (i.e. 25-27% more of average wage) in NWE and SE countries, while they are at 1.5 in CEE countries (i.e. 50% more than the average wage). For work done during weekends or holidays, instead, the incidence is higher in CEE countries than in the other two areas, reaching on average 100% of average wages (i.e. a ratio of 2) compared to 34% in SE countries (i.e. a ratio of 1.34) and 46% in new countries (i.e. a ratio of 1.46).

Respondents were asked if there were other categories of extra compensation for hours worked that were not mentioned in the previous questions. Over 20% of respondents answered that there are no other types of extra compensation. Belgium, France, Sweden and Poland stated that vacation/holiday allowance is an additional compensation for employees in their country. Compensation for leave or holiday not taken is common in the Czech Republic, Italy and Portugal.

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Last but not least, respondents were asked for the number of days of annual leave and holidays as well as to identify their costs.

Starting with the number of days off per year (Figure 23, left-hand side), countries range between 29 and 44 days per year, with days of annual leave between 20 and 30 and between 8 and 16 public holidays. The top two countries are Spain and Latvia with 44 paid days off per year. The distribution is more or less even at around 35 days per year combining annual leave and public holidays. Some countries falling below the 35-day threshold register the same or even a higher number of days for annual leave (e.g. Denmark and Finland) than those countries above 35 days off per year, but have fewer days of public holidays. Overall, on average, NWE countries are those with the smallest number of public holidays.

When it comes to expenditure related to annual leave, fewer respondents were able to identify costs, and even fewer to differentiate for types of workers. Overall, the majority of countries lie between €3.50 and €10 per hour not worked (Figure 23, right-hand side). As for the other trends observed above, Denmark still ranks first, followed by Finland and Belgium, all above the €10 threshold.

Figure 23 Minimum number of days of annual leave and days of public holiday – all workers

Figure 24 Expenditure on annual leave and public holidays, average wage per hour not worked – all workers

Note: * Figures refer to permanent workers instead of all workers.

From the few answers collected, the main difference emerging among types of workers in terms of expenditure on annual leave paid by employers is between permanent and seasonal workers. In fact, in some countries (e.g. Finland and France), whereas expenditure for permanent workers refers to the cost of number of days off plus the holiday bonus, for seasonal workers the employer pays a fixed percentage of the wage on top of the daily cost. In other countries instead, there is not a difference between types of workers (e.g. Ireland with €9.55 per hour and Denmark with 12.5% of the wage), while in others, employers pay only for permanent workers and not for seasonal (e.g. Belgium with 15.8% of the wage).

Last but not least, Table 5 presents other types of leave that are covered by employers. For all countries that responded to this question, employers cover a certain amount of paid days for sick leave. Other most frequent types are maternity, parental and educational leave. Once again, few respondents were able to provide costs related to such items. From the answers collected, it also emerged that in some countries, such as Italy, other types of additional leave are covered directly by the public system funded via specific contributions paid by employers.

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Somewhat comparable information is available for costs related to sick leave. The majority of countries reported that the cost is related to the length of the leave and thus changes over time, with a two-week threshold being the most mentioned by respondents. For instance, in Sweden the employer pays 80% of the wage for the first two weeks, after which the rate goes to 10% for up to 90 days of annual leave. Similarly, in the Czech Republic and Hungary, employers pay 60% and 70% of the wage respectively for the first two working weeks of sick leave, after which the cost is covered by social security. A more detailed cost structure applies in Finland, where no contribution is covered by employers in the first week of sick leave, then 50% of the average wage is paid by employers for a period between one week and one month, after which payments depend on the length of the leave. Finally, in a few countries, only the first days are paid by employers, for instance the first two in Lithuania and first three in France. In Latvia, instead, the employer pays up to the first ten days of leave.

Table 5: Additional leave covered by employers – all workers

Sick LeaveParental Leave

Maternity Leave

Paternity Leave

Educational Leave Other

AT CZ FI FR HU IE IT LT LV PT SE SI

5.3.2 Social security contributionIn order to reach a complete overview of indirect cost components, the questionnaire asked for information related to costs covered under social security contributions. Figure 25 shows the overall expenditure by employer on social security contributions in percentage of gross wages. In comparison to results on wages and additional compensation, geographical clustering does not appear to apply –the rate paid by employers in terms of gross wage for social security contribution varies significantly across countries but not between the three European regions. In fact, at the top of the distribution there are three NWE countries (France with 43%, Belgium with 40% and Sweden with 31%), as well as Italy (37%) and Latvia (31%) for the SE and CEE countries respectively. The same applies to the lower part of the distribution, where we find Slovenia, Ireland and Cyprus, each belonging to a different geographic area.

Even though the information shown refers to all workers (or permanent workers in case of missing data), figures can be largely taken in consideration for the other types of workers as well. In fact, from the answers provided, in the majority of countries the same rate applies across workers (e.g. Cyprus, Lithuania, Sweden, Spain) or a minor difference exists between permanent and seasonal, with employers paying a slightly higher percentage of gross wage for the latter (e.g. Finland and Italy).

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Figure 25: Average expenditure on social security contributions for all workers

Note: * Figures refer to permanent workers instead of all workers.

Additionally, for those countries for which a breakdown of cost was available, Figure 26 presents the share of different components within the total social security contribution.

On average, pension is by far the most important cost component within the broad social security contribution paid by employers. Yet, there are significant differences in the share taken by pensions, going from 24% of the social security contribution paid by employers in France and Belgium to up to 86% in the Czech Republic. In fact, with the exception of France and Belgium, pensions are the largest cost component in all countries. In the case of France, sick leave takes the largest share, followed by occupational disease/ accidents at work. Moreover, compared to other countries, France is alone in having a significant share allotted to maternity/parental leave, of around 12%. Compensation for occupational disease/accidents is significant for most of the countries, and in the case of Italy takes the second largest share, up to 35% of total contributions. Finally, in Belgium, a large share is taken by the category ‘Other’, which includes compensation for annual vacation cheques (primarily manual workers) as well as contributions to sustain wage moderation.

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Figure 26: Share in total social security contributions by type of contribution

Note: * Figures refer to permanent workers instead of all workers.

5.4 Labour costs components: imaginary workers

In order to dive into the details of labour cost components, respondents were asked to provide their estimates of the cost for four distinct profiles of workers. Specifically, respondents provided, to the best of their knowledge, cost estimates for three components of indirect costs – overtime bonuses, annual leave, and cost for work done during weekends and holidays. The inclusion and definition of the four profiles of ‘imaginary workers’ in the study was discussed with the steering committee and supported by the latter as providing a solid common ground for comparison of costs across countries. The aim was also to complement the information gathered throughout the first questionnaire on the implications for labour costs deriving from different types of working contracts, working arrangement and sectors of employment. Moreover, these four imaginary workers also differ significantly in terms of personal characteristics (e.g. skill level) that might affect the cost to be borne by the employer (Table 6).

Table 6 Profiles of the four imaginary workersWorker 1 Worker 2 Worker 3 Worker 4

Gender/ Age / Skill

Male, 60 years old, skilled/specialised

Female, 19 years old, unskilled

Male, 40 years old, unskilled

Female, 30 years old, skilled/specialised

Contract Part-time (50%) - Permanent

Full-time – Permanent Seasonal Full-time –

Permanent

Sector Fruit Dairy Crop Horticulture

Years of experience 25 1 17 6

Overtime 50h 100h 50h 10h

Annual leave / Sick leave

Took all days of annual leave + 5 day

sick leave

Took all days of annual leave

Took half of the days of annual leave

Took all days of annual leave +

maternity leave*

Weekend/Bank Holiday Worked 10 days Worked 20 days Worked 10 days Worked 5 days

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Worker 1 Worker 2 Worker 3 Worker 4

Employment duration Entire year Entire year

Harvesting season (3 months during

summer)Entire year

Note: * Maternity leave of 3 months, if available, otherwise maximum duration.

Figure 27 presents results for these four types of workers. Geographical clustering can be seen across all types of workers, with the highest rates of payment observable in NWE countries: Denmark and Sweden report the highest labour costs for all types of workers except seasonal, for which Finland and Ireland rank first and second respectively. As already stressed, this clustering is largely expected as costs of living differ significantly across member states in the EU.

Figure 27: Labour cost of the four imaginary workers

Across types of workers, it can be seen that in NWE countries, indirect costs represent a higher share of total labour costs compared to the situation in SE and CEE countries (Table 7), with the sole exception of seasonal workers (profile 3) for which indirect costs are proportionally higher in SE countries.

This difference is driven principally by the costs of annual leave. In fact, whereas overtime bonuses and weekend/holiday pay represent (for each worker with a different magnitude) a very similar share in overall costs across the different geographic areas, the share of annual leave in total labour costs is at least three percentage points higher in NWE countries compared to the rest of the EU. For instance, looking at the first profile of worker, the 60-year-old specialised worker employed with a part-time contract, the share of overtime bonuses and weekend/holiday pay taken together on overall labour cost is, on average, 11%, 10% and 9.8% for NWE, SE and CEE countries respectively; yet, annual leave takes up 9.8% of labour cost in NWE countries, well above the 6.9% in SE and 6.2% in CEE countries. The divide

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is even larger for the other three profiles of workers, but, for the seasonal worker (i.e. worker 3), the difference in annual leave is compensated by the higher incidence of both overtime bonuses and hours worked during weekends and holidays in SE countries, thus leading to a slightly higher share of indirect costs on overall labour cost than in NWE countries.

Table 7 Incidence of indirect costs on overall labour cost – the case of the four imaginary workers

Worker 1 Worker 2 Worker 3 Worker 4Avg. gross wage

Indirect Costs

Avg. gross wage

Indirect Costs

Avg. gross wage

Indirect Costs

Avg. gross wage

Indirect Costs

NWE 79.2% 20.8% 76.6% 23.4% 63.1% 36.9% 83.3% 16.7%SE 83.1% 16.9% 79.5% 20.5% 62.2% 37.8% 87.8% 12.2%

CEE 84.0% 16.0% 84.9% 15.1% NA NA 88.7% 11.3%Notes: Countries used for the average are those that provided a full set of information across the four categories of cost.

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6 Labour organisationFor a better overview of the importance of the agricultural sector in European countries, Figure 28 shows the share of agriculture in total employment in the country. CEE and SE countries have notably higher shares. Except for France, other NWE countries fall under a 2% share of employees in the agricultural sector. Latvia is an outlier, reaching over a 8% share of employment, while Poland ranks last with a value under 1%, mostly due to the large overall labour force and high employment rate in the country. In absolute terms, France, Italy and Spain employ overall three million people in the sector, three times the total of all the other countries surveyed in the study.

Even though these figures reflect the overall number of workers (i.e. both salaried and non-salaried workers) and not in FTE, countries’ ranks do not move significantly away from those reported in the sectoral analysis when accounting for all possible differentiation between workers (see Figure 4 in Section 3.2).

Figure 28: Share of employment in agricultural sector in total employment

Note: The values of total employment are taken from the European Union Labour Force Survey (Eurostat).

Figure 29 portrays the proportion of different types of employees within total employment in the agricultural sector. Permanent workers are common in all countries, but they represent the majority of the agricultural labour force only in Portugal, Lithuania and Denmark. The other main category of workers is the one covering fixed-term employment, as seasonal workers represent between 70 and 92% of the workforce in agriculture in most of the countries surveyed. Only in Hungary, the labour force is evenly distributed between permanent and seasonal workers.

Moreover, throughout the data-validation process, it has emerged that in most of the countries surveyed there is no a clear-cut distinction between seasonal and occasional workers. This finding confirms the lack of common and clear definition of seasonal employment in the EU outlined in Section 4.1, which creates an overlap between the two types of temporary employment in several countries.

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As regards the other two categories of workers (i.e. Posted and Specialised), they appear, in limited share, only in two instances. Moreover, in some countries, such as France, data for posted workers were not accessible to respondents.

Figure 29: Types of employment as a proportion of the total employment in agriculture

Box 3 Type of employment as proportion of total employment – sectoral examples

Some respondents were able to provide estimates for the labour force composition across the sectoral dimension. In the case of Finland and France, it was also possible to differentiate by both permanent and seasonal workers, even though, for France, it was not possible to group for precisely the same sectoral categories. What emerges is a reflection of the different types of production and their level of seasonality. Moreover, distribution seems consistent among the few observations collected.

Livestock, Crop and Dairy production, for instance, are the main sectors where permanent workers cluster, as shown clearly in Finland and Denmark. Even though categories are slightly different for France, the categories Livestock, Livestock/Dairy and Crop/Livestock taken together employ 42% of all permanent workers as against 23% of all seasonal workers.

On the contrary, seasonal workers cluster mostly in Fruit production in Finland and Wine in France. Unfortunately, for France, the category Fruit is mixed with Horticulture, which does not allow for a clear understanding of the level of participation of seasonal workers in these two production types.

Finally, for the distribution of all workers in general, a country’s specific production emerges clearly, as for Wine in both France (37% of all workers) and Italy (20% of all workers), and Olive in Italy (10% of all workers).

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*Other includes Mixed production in Slovenia.

The second area to look at when dealing with organisation of labour is working hours and limits imposed by regulation on the latter.

Figure 30 represents the average working hours and overtime hours by week for the two most common types of workers – permanent and seasonal. Because of missing data, several countries can only provide the average number of working hours and no overtime hours. For permanent workers, average working hours are approximately the same across all countries, slightly lower in France, Croatia and Belgium. Cyprus and the Czech Republic report the highest number, on average, of overtime hours, with 18 and 16 respectively. Moving to seasonal workers, the average number of working hours are similar to those for permanent workers, except for Croatia and Ireland where a significant difference can be found. As for permanent workers, the estimation of overtime hours is also limited for seasonal workers. Yet, countries reporting data on overtime hours show the exact same average as for permanent workers.

Figure 30 Average working hours and overtime hours by week, permanent and seasonal workers

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Note: For France, working hours refer to the amount fixed by law rather than average.

In addition to average hours, respondents were also asked to provide the maximum number of working hours per week (including overtime hours) and the minimum number of rest days.

Figure 31 presents the maximum number of working hours per week for all types of workers. The majority of countries range between 45 and 52 hours per week, with Bulgaria being at the bottom with a maximum number of 36 hours worked per week. Croatia, Spain, Cyprus and Ireland are between 55 and 60 hours per week, following Finland that sets a limitation of 65 hours per week. Figure 32, instead, presents the minimum number of rest days per week that is set in each country. In Finland, Bulgaria and Belgium there are two obligatory rest days per week, while only one rest day per week in Hungary and Denmark is ensured. In Poland, it is possible to go as low as one minimum rest day per month. The remainder of respondents stated having a minimum one and a half days of rest per week.

Figure 31 Maximum number of working hours (ordinary and overtime) per week – all workers

Figure 32 Minimum number of rest days per week – all workers

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6.1 Types of contracts

When asked about the diversity of contracts that can be found in each country, most answers referred to permanent, temporary and seasonal contracts. While fixed-term contracts have a higher tendency to be used in SE and CEE countries, full-time contracts are used in NWE as well as in Poland. Part-time contracts were mentioned by both SE and NWE countries, but not in CEE countries. Less frequent are types of contract as subcontracting, apprenticeship, project work contracts or work place sharing agreements.

From the answers collected, it emerges that the types of contracts differ depending on the nature of the sub-sector and its production process. For example, permanent contracts are mostly used in thelivestock and dairy sector, where there is a continuity of the activities to undertake as well as duties related to animal caring. Permanent contracts in this sub-sector are common in Sweden, Poland, Lithuania, Italy, Ireland, Spain, Cyprus, Bulgaria and Finland. In the Czech Republic, temporary contracts in dairy production are mediated by work agencies, and are thus not completely occasional. This happens because of a shortage of workers in the country and in any case there is prevalence of temporary contracts. Finally, in Spain, permanent contracts in agriculture can be found as most common in all those activities that are less dependent on the season and present a fair distribution of workload throughout the year, such as agri-tourism.

On the contrary, in almost all countries for which information is available, seasonal or fixed-term contracts are most common, as expected, in those sub-sectors characterised by peaks in production during the harvesting period. For example, in Bulgaria seasonal workers are common in sectors such as fruit and vegetable farming, and flower cultivation, while the use of specific contracts for seasonal workers are not allowed at all in other sub-sectors such as arable crops, breeding or medicinal plants. In Denmark, seasonal and fixed-term workers are mainly employed for strawberries and peapods, while, in Portugal, they work mostly in fruit, vegetables and wine production. In Sweden, for the fruit sector, there are only temporary and seasonal contracts, and these contracts are also common in horticulture and crop production, where permanent contracts represent only a limited share. Similarly, in Lithuania,seasonal or fixed-term contracts are used in the horticulture and fruit sector, while a mix of fixed-term and permanent contracts is found in cereals production. By contrast, in Hungary, seasonal workers are mainly employed in crops production. In Croatia, seasonal workers are mainly contracted in sub-sectors such as fruit and vegetables, with contracts up to three months, but more recently also in crop production. On the contrary, permanent contracts are the most common in the livestock sub-sector.

As example of the possible variety of contracts in different sectors, Table 8 reports the case of Finland for which very detailed information, including ranking of types of contracts, was available for different sectors.

Table 8 Most common types of contract across sectors – the case of Finland

Animal production1. Permanent full-time contracts2. Temporary full-time contracts3. Contractor contracts

Crop production/open land cultivation1. Seasonal full-time contracts2. Permanent full-time contracts3. Contractor contracts

Horticulture/glass house production 1. Permanent full-time contracts2. Seasonal full-time contracts

Green area construction1. Seasonal full-time contracts (90%)2. Permanent full-time contracts (10%)3. Contracts with a subcontractor

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Fur farming 1. Seasonal full-time contracts (70%)2. Permanent full-time contracts (30%)

6.1.1 Contracts for seasonal workers

In general, as stated, seasonal workers are particularly relevant in agriculture, although specific contracts for seasonal workers are not present in some countries, such as Austria, France, Italy, Croatia, Poland and Portugal. In these countries, seasonal workers are employed with fixed-term contracts. For example, in Croatia, seasonal workers are from third countries and can be employed on a temporary basis for a maximum of six months through an annual quota system of licences to be issued for foreign employment.

However, Poland indicated that, a special law was in force in 2018 during the harvesting period of special agricultural sectors, such as hops, fruit, vegetables, tobacco and herbs, but restricted to justspecial areas and times. According to this law, social security contributions are lower for seasonal workers. Moreover, in Portugal, the fixed-term contracts used for seasonal workers can have both fixedand indefinite duration, the latter being subject to the duration of the harvesting season.

By contrast, other countries have specific contracts for seasonal workers. For example, in Belgium,seasonal workers have a specific daily contracts, not written, where the calculation of the employers’ contribution is made on a flat salary. In this way, the cost is lower than for a fixed-term worker. The verbal nature of seasonal contracts is also found in Spain, specifically for contracts that are shorter than 28 days, while different types of seasonal contracts are in written form and depend on the type of work to be performed. Lower costs of labour through seasonal contracts are also found in Hungary, where the taxes paid for seasonal workers are halved in comparison to other contracts such as for temporaryworkers. Similarly, in Cyprus, even if seasonal workers are employed with the same contract astemporary workers, the former do not have rights to annual leave, sick leave, national holidays and social insurance, thus representing lower labour cost for employers.

Another common characteristic of the seasonal contracts found across different countries is their limitation in time. In Lithuania, seasonal contracts can be used up to a maximum of 8 months per year, while in Bulgaria up to a maximum of 3 months (90 days) per year. Also, in Sweden, seasonal contracts are used, for workers that work in the country for 6-10 months per year and then return the year after.

Such contracts are available also in Slovenia, where, however, foreigners can obtain approval for seasonal work only if it is proved that there is no appropriate profile in the register of national unemployed persons. Indeed, when asked about the characteristics of seasonal workers, most of the respondents indicated that in their countries there is a prevalence of foreigners among seasonal workers, both from third countries, such as Ukraine, Russia and several Asian and African countries, and from CEE countries such as Romania, Hungary and Poland. In some responses, it was highlighted that seasonal workers tend to come increasingly often from other EU countries, rather than from third countries, because labour mobility is easier for them, whereas it is hard to hire from countries outside the EU.

In terms of the skills of seasonal workers, data are only available for few countries. For example, in Belgium it is not possible to obtain this information because seasonal worker status does not distinguish between qualified or non-qualified workers. For Italy, available data indicate that only 5% of seasonal workers have a higher education diploma. In Finland, seasonal workers that work in animal production, mainly from the Baltic countries and Ukraine, may hold a veterinarian diploma or other similar qualifications in their country.

The distinction between occasional and seasonal workers is not clear across countries, and different contracts are barely encountered in the sample of countries that answered the survey, as already mentioned in the preceding sections.

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6.2 The relevance of collective agreements

Collective agreements in agriculture are important for the majority of respondents, except for Poland where there are no collective agreements for the agricultural sector. Similarly, Croatia indicated that there are no collective agreements for agriculture but only for the food industry. Yet, even when collective agreements for the agricultural sector do exist, significant differences in their application and coverage emerge across countries.

In Ireland, for instance, there is no specific collective agreement for agriculture but one that applies to the overall economy. In Lithuania, the collective bargaining process is not well established in the agricultural sector, as there is no professional union to represent the interests of agricultural employees. In the Czech Republic, collective agreements cover basic needs such as basic pay, but also establish additional contributions to social security on a voluntarily basis. In Hungary, collective agreements only cover members of the agricultural employers’ association, rather than the entire sector. By contrast, in Denmark, farmers that are not part of the agricultural employers’ organisation will in general also be in line with the collective agreements, at least for what concerns salary, although not explicitly joining them and, in some case, not following provisions for other aspects such as overtime.

In the other nine countries surveyed,33 collective agreements apply to all workers. In fact, the coverage of the collective agreements in terms of different types of workers varies considerably betweencountries. Whereas in Denmark collective agreements can cover all workers, they are often applied to permanent workers. In Slovenia, collective agreements apply to permanent and temporary workers as well as to workers involved in specific projects and/or traineeship. While in principle, for countries such as Portugal and the Czech Republic, collective agreements only apply to the employees hired in companies that are part of the association that concluded the agreement, such agreements can, under sectoral conditions, be extended to all workers.

Another difference among countries is regarding the geographical scope of collective agreements: national level, regional level, or both. For example, in Austria, collective agreements are at regional level (‘Bundesland’ level), while in Belgium and Cyprus they are at national level. In France, Italy and Portugal, instead, collective agreements are concluded at both national and local/provincial/regional level. The two levels can cover different subjects, as in Italy, where provincial-level bargaining establishes the classification and remuneration of workers and the organisation of work and working hours, whereas the national-level bargaining sets the general rules of labour relations.

Finally, in several countries, such as Austria, Finland, Portugal and Sweden, collective agreements exist for sub-sectors of agriculture. In Finland, for example, there is no single legal agreement on minimum wages but four agreements exist for different sub-sectors of agriculture. In addition, in Sweden, the collective agreement covers 80-90% of the labour force, but this percentage varies according to different sub-sectors.

Information about the content of collective agreements is available for a few countries. In Austria, collective agreements cover mainly minimum wages and severance pay (i.e. pay upon termination of the employment contract), as well as rules on working time. In Portugal, collective agreements are very important and cover many aspects of labour relations such as types of contracts, working time, flexibility, rest days, holidays, bank holidays, wages, subsidies, bonuses, food vouchers, vocational training and maternity and paternity leave. Similarly, in Slovenia, the collective agreement defines uniform minimum standards, job classification, the employment contract and its special forms. Moreover, it covers aspects such as trial work and internship, referral to work in another place, working time, the right for absence from work, rest and annual leave, education, disciplinary and damages liability, trade union activities, receipts from an employment relationship, establishing a wide range of rights and obligations of employer and employee in the agricultural sector.

33 Austria, Cyprus, Spain, Finland, France, Ireland, Italy, Sweden and Slovenia.

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6.3 Training

When asked if training for workers is important in agriculture, the large majority of countries that answered the survey agree. However, training costs are not covered by the employer in all countries and in some cases employees have to pay for their training, such as in Spain, Italy and Lithuania. In Italy, the employee pays for training through a share of 0.3% of social security contributions. Similarly, in Spain, employees normally pay for their own training costs, but there is also the possibility to participate insubsidised training courses. Moreover, in Finland, even if the employers pay for it, training during the employment relationship is not common, but it is the employer’s duty to organise short-term education and introduction for his employees when new machinery or new production methods are introduced. If not supplied by employers, the training is funded by public funding, such as in Austria, Belgium, and Portugal, representing a form of government support.

Despite its importance, in most cases the time spent in training guarantees no compensation by the government to the employer for the worktime missed by workers undertaking the training, with Denmark and Spain being an exception. In Spain, the time in training is compensated through social security subsidies, while in Denmark through other forms of compensation by the government. In other countries, such as Austria, Finland, France and Slovenia, the time in training is remunerated as part of the salary.

Training is also important for employers, in most countries being necessary to obtain specific certificates that are needed to undertake production activities in agriculture, especially to use the newest products and to acknowledge updated regulation needs. In most countries, such as Austria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Italy, Portugal and Slovenia, there is obligatory education and training related to health and safety issues, for example concerning spray and plant protection products, which represents the most common subject of compulsory training for employers in respondent countries, but also related to hygiene certificate and safety at work. In Bulgaria, training is compulsory for organic farming.

According to the results, the employers pay for the training by themselves in the majority of the countries, with the exception of Bulgaria, Cyprus and Portugal. However, in Austria, participation fees are often subsidised and in Slovenia in some cases the training is offered by the seller or adviser for specific products.

The providers for both training directed at employees and training directed at employers in most countries are governmental agencies, like the Department of Agriculture under the Ministry of Agriculture and Rural Development in Cyprus, The Rural Training Institutes and Chamber of Agricultural Workers in Austria or training entities that are a part of the National Qualification System in Portugal. Otherwise, there are private companies and other educational entities and social partners (Table 9).

Table 9 Training providers in the agricultural sector

AT The Rural Training Institutes and the Chamber of Agricultural WorkersBE Government agencies BG Employer and agencies funded by participantsCY The Department of Agriculture from the Ministry of Agriculture and Rural DevelopmentCZ Different departments of Ministry of Agriculture, SuppliersDK Schools and private companies (through bids)ES Employer and public administrationFR EmployerHR Private companiesHU Universities, government agencies, consultant companies, suppliersIE Agents

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IT Private entities (accredited by public bodies)LT Private and public bodiesPL Suppliers

PT Private and public bodies (certified by the Directorate-General for Employment and Labour Relations, as part of the National Qualification System)

SE Employers, county administration (länsstyrelsen), agriculture authority

SI University, Chamber of Agriculture and Forestry, Institute for Hop and Brewing, Agricultural Institute

6.4 Trends affecting demand and supply of labour

6.4.1 Intra- and extra-EU labour mobilityRegarding the importance of labour mobility within and outside EU borders, the agricultural sector is undergoing significant changes. The answers collected throughout this study highlight a certain trend within EU countries, describing that due to labour force shortages in NWE and SE, many agricultural workers from CEE countries are willing to move within the Union for a better salary. Belgium, Denmark, France, Portugal and Sweden have stated that mobility within EU has become important, as there is a shortage of native workers. Austria, Finland, Italy and Portugal point out that active labour mobility can be seen from CEE countries like Poland, Romania, Bulgaria or Baltic states. Yet, some responses show a common trait, underlying how intra-EU migration is not enough to satisfy labour demand in agriculture in NWE and SE countries. In Finland, for instance, foreign workers represent almost half of the labour force (48%), while in Italy, for which a breakdown between extra- and intra-EU workers was available, extra-EU citizens account for 13% and intra-EU for 15% of the entire labour force in agriculture (Figure 33).

In turn, labour mobility from CEE to NWE and SE countries creates shortage of agricultural workers in the origin countries, therefore opening up opportunities and interest in hiring extra-EU nationals. This comes on top of the ongoing depopulation of rural areas, which already puts the productivity of the sector in CEE countries under pressure. For instance, in Slovenia, foreign workers make up to 7% of the overall labour force in agriculture, but only 18% of that comes from another EU member state, while the remaining 82% is composed by extra-EU nationals (Figure 33).

Figure 33 Share of foreigners in agriculture overall labour force

Note: Breakdown between intra- and extra-EU shown whenever data were available.

As emerges from the answers, CEE countries are often a transit for agricultural labour mobility from extra-EU countries, as in the case described for Hungary, where a few years ago workers were arriving

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from Ukraine and Romania (prior to the EU accession), but with their final desired destination being in NWE countries, where standards of living are higher.

Recruiting a labour force from non-EU countries becomes especially important during seasonal peaks. Yet, each respondent highlighted some barriers to hiring extra-EU nationals, either of a legislative or economic nature.

In Bulgaria, for instance, the limitation of 90 days for the residence permit coupled with a burdensome procedure hampers hiring of extra-EU nationals. A law passed recently in Cyprus has changed the recruitment process of non-EU citizens, with the result of increasing its duration to at least 3 months. In addition, more time spent translates into higher costs for compliance with legislation, which ultimately pushes employers not to hire extra-EU nationals. Similarly, in Portugal it takes up to 6 months for non-EU citizens to finalise the process and obtain their working visa. In Croatia, for example, there is a high potential for filling the emerging labour shortages through migration from extra-EU neighbour countries,but the current legislation limits these flows considerably, by not allowing day-by-day migration but requiring a permanent residence in Croatia instead. France also acknowledges that administrative procedures for seasonal workers take too long, especially given the need for timely hiring to meetlabour demands for the harvesting season. In Italy, the entry of non-EU citizens for seasonal work contracts has been simplified; yet, the annual quota still applies. Indeed, several complaints have been raised by Italian employers on the ‘yearly-decree’ approach and its constant delays in terms of date of publication, assessment of requests and issuing of permits, which, in line with what is reported also by France, hampers the possibility of hiring extra-EU workers in time for harvesting seasons and thus increasing the risk of exploitation.34

6.4.2 Digitalisation and automation

Digitalisation and automation in the agricultural sector are currently ongoing in almost all countries surveyed. However, it appears to be triggered by different factors and expected to have diversified impacts across the EU depending on the context.

As a general trend from the questionnaires, two major factors are seen as pushing digitalisation and automation in agriculture. On the one hand, rises in productivity and improvements of the quality of production emerge as an important reason to invest in digitalisation, as in the case of Austria and Cyprus. On the other hand, labour shortages in agriculture appear as an issue that make automation and introduction of machineries increasingly necessary, as in the case of the Czech Republic and Ireland.

Concerning the impact, some answers point out that it differs according to sub-sectors. For example, in Bulgaria, digitalisation and automation can hardly replace labour in the field of tobacco, roses, potatoes, fruit and vegetables. As result, since some sub-sectors are more important in economic terms in certain countries rather than in others, the impact of technological change in the EU agricultural sector might be unevenly distributed among national agricultural systems, depending on the structure of national production and on the extent to which specific sub-sectors are affected by this trend.

Moreover, the impact of the new wave of technological change will differ according to the labour-intensity of the agricultural sector in each country. For example, in Sweden, as agriculture is already rather technology-intensive, the impact of digitalisation and further automation is not seen as dramatic as in other countries because there are already few workers employed for manual activities and the agricultural labour force is already skilled to uptake future challenges and opportunities driven by further technical innovation. By contrast, in countries where digitalisation and automation have not proceeded so far, like for example Slovenia, the expected impact is more significant, especially in terms of the skills required in the future to agricultural workers. However, as technology is not yet widely spread in Slovenian agriculture, the need for skilled workers is still not apparent.

Indeed, in none of the countries surveyed, are digitalisation and automation seen as causing a serious problem of job destruction in the agricultural sector at present. Although the problem is mentioned for

34 Del Ponte Fabio, Zanotti Raphaël (2017) and Morra Barbara (2019).

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Spain and for Poland, where the decrease in labour demand is seen as a possible effect, but at a slower pace in agriculture compared to other sectors of the economy.

In all the other countries surveyed, the most important impact of digitalisation and automation is the shift of labour demand towards more skilled workers, which is mentioned for almost all countries, with possible effects in terms of increases in labour costs for some of them (e.g. Czech Republic). The need for upskilling the agricultural workforce is seen as a challenge in almost all countries. This challenge is explicitly mentioned for the Czech Republic, where reliance on unskilled migrant workers prevents the development of a skilled workforce in the agricultural sector, and in France, where the need to enhance training in this sense is highlighted. Also in Croatia, the need for workers with higher technological skills in order to manage modern machines and equipment is acknowledged. In addition, in Hungary, as the trend is towards digitalisation for precision agriculture, the challenge is to attract IT professionals and other skilled workers, which are currently not very involved in the sector.

Other challenges of digitalisation and automation concern the initial investment cost, as in the case of Slovenia, or the lack of a domestic industry providing the newest technology, as in the case of Austria, which has to rely on imports.

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7 ConclusionsThe nature of agricultural production implies big shifts in demand for labour throughout the year, whichmakes the profitability of the sector highly dependable on a flexible supply of labour. In addition, there are elements affecting production, such as periods of drought, which are out of farmers’ control. Within this specific context, a deep knowledge of the workforce, its cost and level of flexibility defined by contractual norms is necessary to be prepared for the harvesting season and to react promptly to unexpected adversities. Unfortunately, there are significant gaps in labour and overall business statistics for the agricultural sector. Through the two surveys with employers in agriculture, this study aimed to address some of these gaps, providing an overview of the main differences in labour costs and organisation between countries in the EU as well as identifying the major trends affecting both demand and supply of labour in the sector.

7.1 Minimum and average wage

In terms of costs, both direct and indirect, the data collected show a clear geographical clustering, with NWE countries reporting significantly higher costs than those in SE and CEE. Differences are significant in some cases, with minimum wages in some NWE countries being higher than average wages in CEE countries. These differences, drawn around geographical clusters, appear to reflect a combination of different living standards, productivity levels in agriculture and the institutional context and labour laws in each country, which altogether contribute to define labour costs at a national level in the agricultural sector. Along the contract dimension, no significant differences in minimum gross wages have been identified between permanent and seasonal workers in NWE countries. In contrast, in CEE countries seasonal workers appear to earn a lower minimum wage than permanent workers, while the opposite holds in SE countries. Finally, comparing minimum and average gross wages, the gap is larger for permanent workers than for seasonal.

Information on different hourly pay across the sectoral dimension were rather scarce and scattered, which is a trait of the entire study. Yet, some interesting insights for some countries were made available and make it possible to highlight some differences in sectoral costs. For instance, average gross wages in crop production are lower than the value for the entire agricultural sector in Belgium, Denmark and Poland, while the opposite is true in Finland and Slovenia. The exact opposite applies to horticulture, for which average wages are higher than for the overall sector in Belgium and Denmark, while lower in Finland and Slovenia.

Finally, exploring the dimensions covered in greater depth, one can compare sectoral differences in average wages also among different types of workers, in order to understand whether some sectors are more profitable for a specific category of workers than for others. In Polish dairy production, for instance, whereas seasonal workers have a higher average salary compared to the one for the overall agricultural sector (+5.2%), permanent workers earn a lower average wage compared to what they earn overall in the agricultural sector (-16%). In the case of Belgium, instead, differences in average wageswith the overall agricultural sector report the same indication for both categories of workers, meaning that there are sectors that either have a lower or higher pay rate than the average agriculture rate, but that this does not differ across the type of worker dimension.

7.2 Indirect costs

Moving to the analysis of indirect costs, expenditure for extra-time work has been the easiest to quantify among the types of indirect costs covered by the questionnaire. Hours worked in overtime on a daily basis are better paid than those during weekends or public holidays in most NWE countries, while the opposite trend is observable in SE and CEE countries. The geographical clustering also applies to these categories of indirect costs, with wages per hour worked overtime being the highest in NWE

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countries, even though the gap with countries in other regions is less marked than for direct costs. Expenditure for overtime bonuses varies between €10 and €35 per hour in NWE countries, Spain and Italy. For the other SE countries and all CEE countries, overtime bonuses are paid less than €10 per hour, in Portugal dropping to €4.20. When relating the expenditure for overtime bonuses with average gross wages, on average, they stand at a ratio of 1.25-1.27 (i.e. 25% - 27% more of average wage) in NEW and SE countries, while they are at 1.5 in CEE countries (i.e. 50% more than the average wage). For work done during weekends or holidays, instead, the incidence is higher in CEE countries than in the other two areas, reaching on average an increase of 100% of average wages (i.e. a ratio of 2) compared to 34% in SE countries (i.e. a ratio of 1.34) and 46% in NWE countries (i.e. a ratio of 1.46).

In terms of wages in kind, accommodation is by far the most common type covered by employers, followed by reimbursement for transport. From the answers collected, it also emerged that wages in kind do not differ significantly across categories of workers. In terms of expenditure, limited information was available, except for accommodation in NWE countries, which can cost employers between €90 and €200 per month, with an average cost of about €125 per month.

For what concerns expenditure for time not worked, instead, respondents were asked to provide minimum amount of days of annual leave and days of public holidays as well as an estimate of the cost. Countries range between 29 and 44 days per year, with between 20 and 30 days of annual leave in addition to between 8 and 16 public holidays. NWE countries are those with fewest public holidays. In terms of expenditure, overall, the majority of countries lie between €3.50 and €10 of average wages per hour not worked, apart from Denmark, Finland and Belgium, which are all above the €10 threshold. In terms of differences between profiles of workers, in some countries a fixed percentage on top of the wage is paid for seasonal workers as compensation, while for permanent workers the expenditure is given by the cost of the number of days off and the holiday bonus.

Last but not least, respondents were asked to provide information on the magnitude of the contribution paid for social security. The majority of countries surveyed lie between 20-25% of average gross wagespaid by the employer as social security contributions. In contrast with the previous trends, however, in this case the geographical clustering does not apply: in fact, among the top five countries, three are NWE countries (France, Belgium and Sweden), one is SE (Italy) and one is CEE (Latvia). These five countries are all well above the main group’s values, with both Sweden and Latvia at 31% of average gross wages, Italy at 37%, Belgium at 40% and France reaching 43%. Finally, a breakdown of social security contribution by category was provided for seven countries. Among all the components of social security costs, pension is the largest component for all countries for which information was available, except for France and Belgium, for which it accounts for 24% of the entire social security contribution.

Finally, in order to gather more information on the cost structure and the incidence of indirect costs on overall labour costs for employers, four profiles of ‘imaginary’ workers were designed to help respondents in providing more detailed and comparable information. These results suggest that indirect costs take a higher share in overall labour costs in NWE countries compared to the rest, and that this difference is driven mostly by compensation for annual leave, for which it was asked to consider a worker taking the minimum amount. The worker profiles also helped in discerning differences in costs among types of workers. Among the four profiles of workers analysed, the seasonal worker was, by far, the one with the highest share of indirect costs in overall labour costs born by the employer – around 35% compared to a range, for the other workers, of 15-20%.

7.3 Labour organisation

Besides identification and comparison of cost components, this study also highlighted differences among EU member states in the labour organisation of the agricultural sector as well as the main trends that are shaping demand and supply of labour.

In terms of contracts available in each country, the main types identified were permanent, temporary and seasonal. Some differences were broadly identified within specific sub-sectors of agriculture. Several surveyed countries highlighted that different types of contract are mostly used in different

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agricultural sub-sectors, because of the nature of production processes. Although few countries provided details, the main trend appears to be having permanent contracts mainly in sub-sectors where production activities are less dependent on seasonal cycles, such as livestock, dairy production or other gainful activities in agriculture, such as agri-tourism. On the contrary, seasonal contracts are much more common in the other sub-sectors, which are characterised by peaks in production during harvesting periods. These specificities might be worth being taken into account in order to fine-tune policies to specific agricultural needs.

Importantly, on seasonal workers, the phenomenon appeared to be relevant to all countries for which answers were available. However, when asked about the existence of specific contracts for these workers, some countries indicated that they do not exist, although the legislation changes from one year to another (e.g. in Poland provisions were introduced for 2018). Where specific contracts are not available, seasonal workers are employed with fixed-term contracts, which, however, fail to capture the specificity of this particular form of work and of agricultural production. In addition, from the answers collected by the survey, seasonal workers appear to be mainly foreigners, either from other EU member states or from third countries. From some respondents’ remarks, barriers emerged, in terms of legislative provisions or additional economic burden, to the hiring of seasonal workers from extra-EU countries, impacting on agricultural labour costs especially during the seasonal peaks of harvesting.

In addition, from the study, collective agreements emerge as an important tool in shaping working relations between employers and employees in agriculture. In particular, collective agreements contribute to determining costs of labour in the majority of the countries, at least as concerns minimum wages, and even for social security in some countries. Yet, their scope and coverage is very heterogeneous among the countries surveyed. When it comes to the definition of a minimum wage, for instance, collective agreements apply in NWE countries and in some SE countries (e.g. Italy), while CEE countries set minimum wages by law. Social contributions, instead, are defined by law in all countries but the Czech Republic, France and Cyprus where a mix of law and collective agreements apply. In terms of coverage, collective agreements differ significantly among countries. They can apply either to all workers or only to some types of workers (e.g. members of associations, or only permanent workers), they can be regional or national or a combination of both, they can refer to specific segments of the agricultural sector, and they can cover either basic provisions (e.g. minimum wages, working hours) or go beyond (e.g. education and training, subsidies).

Strengthening the role of collective agreements by tailoring them to the specific characteristics of the agricultural sector in each country could help in improving working conditions on one hand while enhancing productivity on the other. The effect could also be to generate more stable and better defined labour costs in the agricultural sector. In a sector such as agriculture with a high fluctuation indemand and supply of labour, effective social dialogue can help in fine-tuning the labour market matching of demand and supply, and thus cost of labour. Its extension to all workers, independently from their association or type of contract, could also be a way forward in strengthening the protection of workers in most countries where collective agreements only apply to a segment of the workforce, creating imbalances and labour segmentation.

7.4 Major trends

As concerns the main trends affecting labour supply and thus the productivity of farmers in the EU, the evidence collected in the study points to three main interconnected areas: digitalisation and automation, training, and labour shortages.

Enhancing productivity and the quality of production on the one hand, and labour shortages on the other, have been identified as the two main factors driving digitalisation and automation in the sector. When asked about the impact of digitalisation and automation on the sector, respondents consider it as minor for the time being, but that it will ultimately increase the demand for a skilled labour force. Coupled with the fact that 41% of workers in agriculture only have a low level of education, the role of training and upskilling is considered crucial for them to keep pace with technological change and ensure

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sustainable productivity in the future. Upskilling is, therefore, the main challenge foreseen by employers for the future and this is because it will lead to an increase in the overall cost of labour. The need for upskilling the workforce might become a considerable economic cost for farmers if not supported by adequate policies. On the other hand, if not faced, the challenge of upskilling might lead to further labour shortages and suboptimal productivity levels that ultimately hinder wage rises, because of the mismatch in the skills demanded and those available.

In order to ensure a swift transition towards a more skilled labour force and exploit the potential of technological change to raise productivity in the agricultural sector, governments could guarantee that time spent for training and education of employees is always compensated. This is not the case in a lot of countries surveyed in this study. In this respect, training targeting digital skills and supported by the government should be developed for both farmers and workers, so that they will be ready to take up innovation opportunities in the sector and absorb labour shocks deriving from automation. This is critical given that, in the EU, the level of education and continuous training in agriculture is very low. With the majority of managers, on average in the EU, only having practical experience, even basic training such as on accounting software might be of significant value added in enhancing productivity on farms. Therefore, both automation and digitalisation are seen by respondents as key trends that will help raise productivity in the future if properly supported by upskilling. In turn, this would also imply a rise in wages in the sector on the one hand, and, on the other, disruption and creation of tasks. The transition may also drive the rise of other gainful activities that are encouraged in the agricultural sector to improve its resilience.

The high labour-intensity of agriculture, the fluctuation in labour demand linked to seasonality and low wages have progressively led to significant labour shortages for employers. Migration is an important instrument to address such shortages for farmers in the EU. Evidence collected in this study confirmsmajor trends observable from external data: first, the significant wage gap between the east and west of the EU together with the right of free circulation of EU citizens has significantly increased intra-EU migration of workers in agriculture; second, since intra-EU migration alone does not satisfy the demand for workers (especially for highly seasonal types of production), farmers are increasingly looking for extra-EU workers. Overall, respondents mention the need for more extra-EU labour force. However, if it is clear that demand for extra-EU migration is high in NWE and SE countries, foreign workers seem to play a very limited role in most CEE countries. As mentioned above, despite the high demand, however, respondents are discouraged from hiring third-country nationals by the complexity of procedures, which entail significant time spent and costs for compliance. This confirms evidence from the literature: in Italy, for instance, several complaints have been raised by employers on the quota system decided every year by decree and its constant delays in terms of date of publication, assessment of requests and issuing of permits. These delays make hiring extra-EU workers in time for harvesting seasons really hard and thus ultimately increase the risk of exploitation for migrants in an irregular status, a risk that is already present in the territory.

Streamlining existing hiring procedures, actively supporting farmers in fulfilling criteria fixed by such procedures and opening up new legal pathways for seasonal migration would help in satisfying the demand for extra-EU workers, thus partially addressing the labour shortages in the sector.

As a final consideration, data collected throughout the study at country level shed some light on the main differences in labour cost and its components among European countries. Yet, results are not exhaustive as indicated by the paucity of data collected when exploring the contractual and sectoral dimension. In fact, even though answer grids provided in this study were always allowing respondents to fill in information for all the possible combinations of contracts and sectors, in most cases respondents were only able to respond for all workers or for the entire agricultural sector. Some answers in the survey have highlighted that sub-sectors can differ substantially in terms of production processes and, thus, in the composition of the labour force needed. Therefore, detailed knowledge of such differences would be key to producing tailored labour policies. In some cases, data collection is hindered by a lack of clarity in the definitions, due to different legislation in different countries: for example, it was hard to clearly separate between occasional and seasonal workers, and seasonal work is not defined at a

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contractual level in all countries (although it is at EU level). The framework applied in this study could serve as a starting point from which to build a more consistent data collection process, to track changes over time in labour costs and to be able to better inform the debate on policies affecting labour supply and demand in agriculture. A structured data collection process with ongoing involvement of stakeholders and clear guidelines would help streamline definitions (e.g. cost components, type of workers), thus increasing the comparability of data and achieving robust comparisons of trends in agriculture among member states.

Despite the decline in terms of economic weight, the agricultural sector still serves a crucial role for EU employment on the one hand, and, on the other hand, for EU society in terms of food safety and food security, as well as to enhance overall sustainability of the system. In addition, it is important to account for all downstream production that is dependent on agriculture when assessing the overall contribution of the sector, and its workers, to the life of Europeans. Because of its wide societal and economic impact, it is even more important to have information as detailed and comparable as possible in order to design and implement effective policies in support of the productivity of the sector.

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Appendix

Questionnaire 1Labour Cost in Agriculture: Comparative Study – Questionnaire on Labour Cost Structure

Date: Country: Organisation:

Contact Person: Email: Phone Number:

PART A: COSTS TO BE PAID BY THE EMPLOYER

COMPENSATION OF EMPLOYEES

Q1.Please fill in the number of workers for the different categories of workers. If available, please add the number of working days or working hours between brackets:

Number of employees All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

Compensation for hours worked:

Q2.Please fill in the minimum gross wage (in national currency per hour) for the different categories of workers:

Gross minimum wage

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

How is the minimum wage determined?

By collective agreement

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By law

Q3.Please fill in the average gross wage (in national currency per hour) for the different categories of workers:

Average gross wage

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

Q4.Do you have access to (and can share) data on the average and minimum gross wage for workers of different skill levels(unskilled, low-skilled, and high-skilled; or specialised versus regular worker)? Please briefly explain what data are available, and from what sources:

Q5.Is it common practice to have wage differentiation by the performance of the worker? Please indicate what data are available, and from what sources:

Q6.What wages in kind are paid out (e.g. goods and services for private use, housing, food vouchers, reimbursement of transportation costs …) and to which workers? If available, also provide the estimated amount spent on these wages in kind:

Wages in kindWhat wages in kind are

provided?Estimated amount in national currency per month/year (please

indicate which applies)Permanent employeesOccasional workers

Seasonal workers

Posted workersSpecialised workersReference year(s):

Additional compensation for hours worked:

Q7.Please fill in the expenditure on overtime bonuses (in national currency per hour) for the different categories of workers:

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Overtime bonuses

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

Q8.Please fill in the expenditure on weekend and holiday work (in national currency per hour) for the different categories of workers:

Weekend / holiday work

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

Q9.Are there other relevant categories of extra compensation for hours worked that have not been covered yet (e.g. leave allowances, compensation for leave not used, etc.)? Please explain and provide data if available:

Compensation for hours not worked:

Q10.How many public holidays are there in your country (reference year = 2017)?

Q11.What is the minimum number of days of annual leave (excluding public holidays) a worker entitled to (reference year = 2017)?

Q12.Please fill in the expenditure on annual leave (incl. public holidays) (in national currency per hour not worked or annual total – please indicate which applies) for the different categories of workers. Assume that the worker takes up the minimum number of holidays they are entitled to:

Annual leavesAll

workersPermanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticulture

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WineDairyLivestockCropOliveOtherReference year(s):Q13.Please fill in the expenditure on additional leaves (in national currency per hour) for the different categories of workers:

Additional leavesAll

workersPermanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Sick leaveMaternity leaveParental leave Educational leaveOther:Other:Reference year(s):

Scenario of an imaginary worker:

Q14.Imagine a worker with the following characteristics:

Personal characteristics: male, 34 years old, skilled/specialised

Working full-time, with a permanent employment contract, in the livestock sector, and who has worked in this sector for 11 years

Worked 50 hours overtime, took up all available annual leave, but no additional leave

Worked 10 days during the weekend / holidays

Please give a range of how much this worker would cost for an employer in your country (when employed over the entire year, in national currency) and briefly explain how you achieve this result:

Type of cost Amount (in national currency per year)

Explanation

Average gross wageOvertime bonusesWeekend / holiday payAnnual leave

SOCIAL SECURITY CONTRIBUTIONS

Q15.Please provide the average expenditure social security contributions (in percent of gross wage) (all categories of benefits combined) by the employer for the different categories of workers:

Social security contributions

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

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How are the social costs determined?

By collective agreement

By law

Q16.Please specify the share in total social security contributions by type (as a percent of total social security contributions):

By type:All

workersPermanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

UnemploymentMaternity / ParentalSicknessOccupational Disease / Accidents at workPensionsDisabilityOther:Reference year(s):

FISCAL CONTRIBUTIONS

Q17.Please fill in the expenditure on taxes (total, in national currency) for the different categories of workers, for workers earning the minimum wage:

TaxesAll

workersPermanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestockCropOliveOtherReference year(s):

PART B: COSTS TO BE PAID BY THE EMPLOYEE

Q18.Please provide the average expenditure on social security contributions (in national currency per hour) (all categories of benefits) by the worker for the different categories of workers:

Social security contributions

All workers

Permanent Employees

Occasional workers

Seasonal workers

Posted workers

Specialised workers

Data source

Agriculture (full sector)FruitHorticultureWineDairyLivestock

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CropOliveOtherReference year(s):

How are the social security contributions determined?

By collective agreement

By law

Questionnaire 2

Labour Cost in Agriculture: Comparative Study – Questionnaire on Labour Organisation

Date: Country: Organisation:

Contact Person: Email: Phone Number:

Instructions: Please fill in as much information as possible. If the information is not available please put “NA”. Please make use of the comments/explanation fields for any additional information you think could be useful.

Definitions: Seasonal worker is a person who works in the agricultural sector for longer period during a specific harvesting time.Occasional worker is a person who works in the agricultural sector e.g. once every half a year for a few days to fix machines. The person has a specific task that is not related to the harvesting seasons. If your country does not have a specific contract for the occasional worker type, just leave write in the question “occasional worker type does not exist” and treat all non-permanent workers as ‘seasonal workers’.

PART A: ADDITIONAL QUESTIONS ON LABOUR COSTS

ADDITIONAL SCENARIOS OF IMAGINARY WORKERS

Q1.Below, the profiles of four imaginary workers are given. Please provide information on how much each worker would costfor an employer in your country (a range, in national currency) and briefly explain how you achieved these results:

If you need to make an additional assumption on the worker, please write this in the explanation. None of the workers follow a ‘working time schedule’. Some of the information in the brackets only matters in some member states, otherwise it can be ignored. Social security contribution and tax expenditure are not to be included in this calculation.

WORKER 1:

Male, 60 years old, skilled/specialised

Working part-time (50%) with a permanent employment contract in the fruit sector, has worked in this sector for 25 years

Worked 50 hours overtime (2h per day, spread evenly over the year, overtime applied to ordinary work days), took up all available annual leave, took up 5 days of sick leave

Worked 10 days during the weekend (Sunday) / bank holidays (5 days done in week with only 5 ordinary work day, 5 days done in week with already 6 work days).

No night-time work done.

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Employed during the entire year

Type of cost Amount (in national currency per year)

Explanation

Average gross wageOvertime bonusesWeekend / holiday payAnnual leaveComment:

WORKER 2:

Female, 19 years old, unskilled

Working full-time with a permanent employment contract, in the dairy sector, has worked in this sector for 1 year

Worked 100 hours overtime (done during the first 4 months, so 6.25h per week) , took up all available annual leave, but no additional leave

Worked 20 days during the weekend (Sunday) / bank holidays, (10 days done in week with only 5 ordinary work day, 10 days done in week with already 6 work days).

No night-time work done.

Employed during the entire year

Type of cost Amount (in national currency per year)

Explanation

Average gross wageOvertime bonusesWeekend / holiday payAnnual leaveComment:

WORKER 3:

Male, 40 years old, unskilled (doing manual work)

Seasonal worker in the crop sector, has worked in this sector for 17 years

Worked 50 hours overtime (2h per day, spread evenly over the year, overtime applied to ordinary work days), took up half of available annual leave, but no additional leave

Worked 10 days during the weekend (Sunday) / bank holidays (5 days done in week with only 5 ordinary work day, 5 days done in week with already 6 work days).

No night-time work done.

Employed for harvesting season (3 months during summer)

Type of cost Amount (in national currency per year)

Explanation

Average gross wageOvertime bonusesWeekend / holiday payAnnual leave

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Comment:

WORKER 4:

Female, 30 years old, skilled/specialised

Working full-time with a permanent employment contract in the horticulture sector, has worked in this sector for 6 years

Worked 10 hours overtime (2h per day, spread evenly over the year, overtime applied to ordinary work days), took up all of available annual leave, additional maternity leave (3 months, if available, otherwise maximum duration)

No night-time work done.

Worked 5 days during the weekend (Sunday) / bank holidays(5 days done in week with only 5 ordinary work day)

Type of cost Amount (in national currency per year)

Explanation

Average gross wageOvertime bonusesWeekend / holiday payAnnual leaveComment:

PART B: QUESTIONS RELATED TO LABOUR ORGANISATION

WORKING TIMES

Q2.Please provide the following information on working times in your country:

What is the actual average number of ordinary working hours and the average number of overtime hours in the agricultural sector? (If not available try to provide a range)

Sector Average number of working hours (e.g. the 40 hour week)

Average number of overtime hours (e.g. x hours per week or year) Data source

Permanent contract (full agricultural sector)Seasonal worker (full agricultural sector)Reference year:

What is the maximum number of working hours (ordinary + overtime) in the agricultural sectors? If there are different arrangements for types of workers, please fill in those applicable to permanently employed workers (other are to be described below).

If there are restriction for a different timespan (e.g. over a period of 10 week x hours can be worked), please specify this in the comment field

By week By month By year By season Reference year(s)

Comment:

Is there an exception to the maximum working hours for a certain period of time (peak harvest for example)? Please explain:

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How is the maximum number of working hours determined?

By collective agreement

By law

Both

What is the minimum number of rest days in the agricultural sectors? If there are different arrangements for types of workers, please fill in those applicable to permanently employed workers (more below).

By week By month By year By season Reference year(s)

Comment

How is the minimum number of rest days determined?

By collective agreement

By law

Both

Are there differences in the maximum number of working hours or minimum number of rest days according to the type of contract of a worker or by the sub-sector in which he or she works? Please explain.

CONTRACT TYPES (Please fill in as much information as can be obtained for your country and provide links/names of reports that could answer the question, if available)

Q3.What type of contracts are common in the agricultural sector in your country (e.g. permanent contract, temporary contract, contract for seasonal work, contractors, temporary work agencies contracts, full-time/part-time contracts etc.)? Please list as many types of contracts as possible and briefly explain how they differ from each other.

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Q4.

Q5.Are some type of contracts more common in some sub-sectors of the agricultural sector in your country than others (e.g. are workers in the dairy sector more likely to receive a permanent contract than workers in other sectors)? Please explain.

Q6.Please provide information on seasonal workers in the agricultural sector in your country. How many farms use seasonal workers? Do these workers have a special status or contract? Please also provide some more information on the profile of these seasonal workers (how many of these workers are foreign, from which countries, skilled or unskilled, etc.)?

Q7.How do seasonal workers and occasional workers compare (if distinction exists, see explanation on top)? What are the main differences (e.g. worker profiles, tasks performed, contract type)?

TRAINING AND SKILLS

Q8.How important is training for workers in the agricultural sector in your country? Are workers encouraged to participate in lifelong learning (obtaining skills e.g. using new machinery? Who is covering the costs of training? Is there a financial compensation (e.g. by the government) for the employer for the work-time missed due to training? Are there any support schemes?

Q9.Do employers have to conduct training to obtain certificates (spray regulation etc.) to be allowed to do certain activities? Who is covering the costs of trainings?

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Q10.Who provides the training (health and safety, certificates, new machinery, other skills)? E.g. conducted with provider of machinery, governmental agency, the employer:

COLLECTIVE AGREEMENTS IN AGRICULTURE

Q11.How important are collective agreements in the agricultural sector in your country? Are these agreements concluded at the farm-level, the sector-level or the national-level? What is covered in collective agreements?

Q12.Are collective agreements typically applicable to all workers? If not please explain:

Long-term Trends

Q13.Please provide some comments on the importance of EU labour mobility to ensure sufficient labour input. Is recruitment in other EU member states important? Has it become more common and has it become more challenging to close labour shortages via labour mobility? How does this affect labour costs?

Q14.Please provide some comments on the importance of recruitment from non-EU countries to ensure sufficient labour input. Has it become more common and has it become more challenging to close labour shortages via third country recruitment? What are the legal challenges? How does this affect labour costs?

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Q15.Please comment on the importance of digitalisation and automatisation in the agricultural sector. Is there a rising need for skilled workers to make use of these technologies? Will labour demand shrink due to this trend? How does this affect labour costs?

Q16.How important is organic farming in your country? Is the labour cost structure different in organic farms? Are there any statistics or studies on this?

OPEN ISSUES

Q17.Are there any other issues or topics that are relevant for your country (e.g. employee-sharing, new contracts, etc.)?

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Thank you very much for your participation!

Please do not hesitate to contact us should you have any questions, concerns or wish to supplementary information: matthias.busse@ceps.eu and ana.silva@ceps.eu