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Abstract

The livestock and meat industry contributes significantly to economic growth in north-west Germany. However, observers assume that its sectoral growth will be limited by scarce resources and a stronger regulation of livestock density as well as other aspects of production in the future. Against this background, the ReTiKo project has investigated the economic consequences of a reduction in livestock density for the regional economy. The case region studied consists of the nine districts in Lower Saxony and North Rhine-Westphalia with the highest pig densities in Germany. They are highest in the two case districts of Cloppenburg and Vechta. The extended case region of the quantitative analysis includes seven further neighbouring districts with also very high livestock densities. The spatial concentration of livestock and meat production is partly due to the advantages of the proximity of livestock production and slaughterhouses. It is further driven by the increasing advantages of large production units and increasingly specialised local labour markets. In the district of Cloppenburg, 19 percent of all employees worked in the agricultural and food industry in 2019. In the 16 case districts, the figure was seven per cent in total. In the 220 non-metropolitan "reference districts" in western Germany, the figure was only 3.7 per cent. In Cloppenburg, in addition to the service sector, the manufacturing industry apart from the food industry is relatively weak. In the districts of Warendorf and Emsland, however, it is mainly the scale- and innovation-intensive "complex" manufacturing industry and the service sector that contribute to employment growth. Between 2007 and 2019, the number of employed persons in the reference districts increased by 12.3 percent, while in the Lower Saxony and North Rhine-Westphalia case districts it increased by 24.4 and 14.8 percent, respectively. The strong growth also leads to land and labour scarcity. In Vechta and Cloppenburg, the purchase prices for agricultural land in 2019 were more than twice as high as the Lower Saxony average. In the North Rhine-Westphalian case districts, there were only 0.6 skilled workers registered as unemployed for every vacancy reported by the meat pro-cessing industry in 2019. In the quantitative part of the project, panel regressions are used to determine the relationships between the various industries and their employment developments between 2007 and 2019 separately for 16 case and 220 reference districts. The identified coefficients of the case and reference regimes are then used to simulate the potential development with and without a permanent halving of the employment numbers in the agricultural sector for two further periods of 12 years each. A comparison of the scenarios shows the potential effects of a corresponding exogenous shock. However, regional development cannot be predicted with certainty. In the qualitative part of the project, interviews were therefore conducted with regional experts and stake-holders on the various strategies for further development in and outside the value chain of the livestock and meat industry. These strategies influence the further development after a possible exogenous shock...

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