The role of agriculture as a development tool for a regional economy

In any turbulent economic environment, sectors of economic activity behave and resist differently depending on the causes of the turbulence. Some sectors present a unique resistance in economic aberrations, have a resilient attitude and play the role of the stabilizer, supporting growth and employment. Such sectors are usually related with people basic needs; in the current economic crisis, the agriculture and food sector stand out. The present study endeavours to examine the potentials of agriculture in promoting an integrated development in a regional rural economy, through capturing and recording its interconnections with other sectors of economic activity. Input-Output analysis was applied along with the construction of a regional model intending to examine both the contribution of the primary sector in the regional economy, as well as the impact of the Common Agricultural Policy (CAP) reform on the entire local economy. By employing an analytical tool, it is demonstrated that the impact of the new CAP is not limited to the primary sector, but it - directly and indirectly affects other sectors, as well as the total output, employment and household income of the region. Results suggest that agriculture is an important driver of growth throughout the region, contributing to the increase of the local gross output by approximately €300mil. only by the inflow of funds, while 14% of it is diffused into sectors other than agriculture.