 Hi, I'm Jane. I'm the head of content here at Food Envolted. Economic instability is one of the greatest struggles farmers face. It is also one of the greatest barriers to more sustainable food production. If farmers are to meet legislative and consumer demand for producing more with minimal impact or even positive impact on the environment, we need to first address the realities and challenges related to the costs of farming. The cost of renting a farm varies depending on the size and product of the farm. You can probably guess certain expenses like fertilizers, pesticides, hired labor, tractors and machinery, feed if it's a livestock farm, and so on. But what about land use fees like rent or mortgage, fuel, crop insurance, loans on new investments, repairs and maintenance, veterinarian costs, software and other monitoring tools, depreciation, certification and compliance costs, and soap? These expenses are all necessary to keep a farm up and running and ultimately affect the remaining income and profitability of a farm. So how much do you think a farm makes on average? In 2018, the average net income in the EU was 22,500 euros. This amount includes subsidies, production and labor costs and depreciation, but excludes income tax. The most significant income differences are regional and product specific. The Netherlands, Denmark and Luxembourg had the highest income on average, while Hungary, Poland and Slovenia were lowest. When it comes to products, the ranking of income highest to lowest was farms specializing in granivors, pigs and poultry, wine, horticulture, dairy, while permanent crop farms like almonds and pistachios, grazing livestock farms and mixed farms were below the 2018 average. Another fact to consider is that many farms traditionally rely on unpaid labor in the form of family labor. And in the EU, unpaid family labor accounts for 74% of total farm labor hours. To help support farm income, many governments issue subsidies. While there are issues related to subsidy distribution, see our previous video on how subsidies and policies impact food production, these payments are intended to cushion the impact of fluctuating market prices and provide some stability for farmers, but it's still often not enough. With farmers juggling thin profit margins, growing expenses, loans and increased interest rates, many of them have chosen to close down and sell their farms. Between 2005 and 2020, the EU lost around 5.3 million farms. 87% of these were small farms under 5 hectares. And today, all farmers are facing another challenge of inflation. With climbing fuel and fertilizer prices, many farmers struggle with financial forecasting. Can they invest in new technologies, new infrastructure, or can they even afford to change their practices to be more sustainable, which often requires an initial investment of time and money. Farmers from lower income regions will struggle with additional social impacts as increased expenses means less money available to higher labor and less money to improve housing, education or healthcare. Some of these farmers will turn to other activities like cutting down forest trees and commercializing wood. To create alternative sources of income, some farmers have turned to carbon farming, in which they receive subsidies or payment schemes for sequestering carbon dioxide from the atmosphere via planting specific crops or trees. In Europe, farmers are also hosting educational events, creating campsites on their land, producing artisanal food on site, like cheese or oil. Farmers might also switch to organic production or other sustainable production practices, as such products generate higher prices and more financial support from subsidy programs like the EU's new Common Agricultural Policy, which rewards greener practices. And despite lower yields compared to conventional production, organic farms have saved 75 to 100% on pesticide costs per hectare and 45 to 90% of fertilizer costs per hectare. When including the price of their products and subsidy support, EU organic farmers saw a higher or similar income. Consumers like you and me can also support farmers by directly buying their products either at markets or through subscription services. This cuts out the intermediaries and allows farmers to keep a greater percentage of their profit. If you're interested in learning more about the origins and sustainability of our food, subscribe to Food Enfolded on YouTube, Instagram, and visit our website at www.foodenfolded.com.