Small Farms, Big Opportunity: How Rural Communities Lead the Circular Shift
When conversations about the bio-circular economy focus on scale, they tend to gravitate toward the large: large processing facilities, large investment figures, large national targets. This is understandable. The numbers at the European level are impressive, and the direction of policy points unmistakably toward an agriculture that is more circular, more bio-based, and more resource-efficient at every level.
But there is a risk of misreading where the bio-circular transition actually begins. It does not begin in industrial parks or policy frameworks, useful as both of those are. It begins on farms. And in Europe, the overwhelming majority of farms are small.
Who is really involved in agriculture and farming in Europe?
The structure of European agriculture is not what headlines about industrial food systems might suggest. Of the 9.1 million agricultural holdings in the EU, approximately two thirds, 63.8%, are smaller than 5 hectares. Family farms make up an estimated 93% of all holdings and provide around 78% of all agricultural labour. Their average size is 11 hectares, compared to 102 hectares for non-family farms.
9.1 million agricultural holdings in the EU, of which 93% are family farms and 63.8% are smaller than 5 hectares (Eurostat, 2020)
The distribution of land tells a more concentrated story: just 7.5% of farms, those of 50 hectares or more, manage 68.2% of all agricultural land. Small farms under 5 hectares represent 40% of all holdings but use only 6% of the land. This structural divide has shaped European agricultural policy for decades.
Yet this same structural reality creates a specific and underappreciated opportunity for the bio-circular economy. Small and family farms are not simply scaled-down versions of large industrial operations. They operate differently, relate to land differently, and engage with local ecosystems in ways that give them distinct advantages in a circular model.
This pattern is visible across the countries where AGRI-BIOCIRCULAR-HUB operates. In Poland, southern regions are characterised by high concentrations of small mixed farms, many under 5 hectares, where crop and livestock production have historically coexisted on the same holding. In Latvia, a large share of agricultural activity takes place on small and medium-sized family operations, particularly in livestock and dairy. In Ukraine, while large-scale commercial agriculture dominates the export economy, rural communities throughout the country manage land at the small and medium scale and hold the kind of deep local agricultural knowledge that bio-circular approaches depend upon.
The bio-circular economy, at its core, is about closing loops: returning organic matter to soil, converting waste into energy or fertiliser, keeping biological resources in circulation rather than discarding them. This logic fits naturally with how many small farms already operate.
A mixed farm with both livestock and crops has built-in circularity: manure fertilises fields, crop residues feed animals, composting happens as a matter of course. These are not innovations to be introduced from outside. They are practices that small farms have maintained across generations, often precisely because they could not afford to waste what larger operations routinely discard.
Small farms also tend to produce greater diversity, which supports circular nutrient flows within the farm system. They are more likely to maintain hedgerows, mixed plots, and small-scale habitats that support the biodiversity on which sustainable agriculture depends. And they are embedded in local economies in ways that allow circular value chains to remain local, keeping economic benefits within rural communities rather than routing them to distant processing centres.
68.2% of EU agricultural land is managed by just 7.5% of farms (those over 50 ha), while 40% of holdings under 5 ha use only 6% of land (Eurostat, 2020)
If small farms hold these structural advantages, why has the bio-circular transition not moved faster at this level? The answer is not a lack of interest or willingness. It is a set of practical barriers that policy and investment have not yet adequately addressed.
Scale thresholds for technology adoption. A standalone biogas plant requires a minimum volume of organic feedstock to be economically viable. A composting operation needs enough material to justify equipment and management costs. A single small farm rarely meets these thresholds alone. The circular technologies that make economic sense at 500 hectares often do not at 10 hectares.
Access to capital. Small farms operate on thin margins. The upfront costs of circular infrastructure are significant relative to farm income. EU CAP direct payments, which distribute roughly 80% of the budget to 20% of the largest farms, have historically reinforced rather than corrected this imbalance. The CAP 2023-2027 allocates 66 billion euros to rural development, but translating that into accessible instruments for small operators remains a challenge in practice.
Information and network gaps. Many small farm operators are not aware of what technologies are available, what funding mechanisms exist, or what business models have worked in comparable contexts. The knowledge needed to make sound decisions about bio-circular investment does not reach rural communities automatically. It requires deliberate effort to transfer and translate.
These barriers are not insurmountable. They are problems of infrastructure, finance, and connection. Each has known solutions, and examples of those solutions working in practice can be found across Europe.
What Works: Cooperation, Aggregation, Community
The pattern that emerges from successful bio-circular transitions at small farm scale is consistent: individual farms cannot do it alone, but groups of farms, connected by shared infrastructure and common purpose, can.
Agricultural cooperatives and producer groups have long served this aggregation function in European farming. The same logic applies to circular bioeconomy infrastructure. A biogas installation shared among a cluster of farms in a rural municipality becomes viable where it would not be for any single farm. A community composting hub that processes organic waste from multiple producers reduces costs for all while generating biofertilisers that benefit local soils. A shared bio-waste collection contract, negotiated by a farmers’ association with a regional processor, opens markets that individual producers could not access independently.
The November 2025 EU Bioeconomy Strategy explicitly recognised this dynamic, highlighting the significance of the bioeconomy for rural areas and the importance of diversifying farmers’ incomes through bio-based value chains. EU ministers, reviewing the strategy in January 2026, emphasised its particular relevance for rural communities and called for simplified access frameworks so that smaller operators can genuinely participate.
In Poland, this cooperative model has practical expression in the work of regional agricultural advisory organisations and chambers of agriculture that connect farmers to knowledge, innovation, and funding. The Wielkopolska region, home to some of Poland’s most developed agricultural infrastructure, offers examples of how organic waste flows from multiple smaller producers can be aggregated into viable circular processing operations.
In Latvia, the Latvian Biogas Association and the Farmers’ Parliament (ZSA) play a comparable role, building the sector-level networks that allow individual farm-scale resources to enter larger circular value chains. The development of poultry-based biogas at the Egg Energy facility demonstrates how a single agricultural by-product stream, concentrated through a sectoral approach rather than farm-by-farm, can anchor a commercially viable circular operation.
In Ukraine, municipal partnerships are emerging as a key mechanism. The collaboration between Lviv Polytechnic, the municipal enterprise Green City, and the Lviv Regional State Administration points to how urban-rural resource flows can be structured within a circular framework, with agricultural and organic municipal waste treated as shared inputs into a regional bio-circular system rather than separate disposal problems.
There is a dimension of the small farm advantage that is harder to quantify but no less real. Rural communities hold bodies of knowledge about local soils, local water systems, local growing conditions, and local biological cycles that have been developed across generations. This knowledge is not redundant in the era of precision agriculture and digital tools. It is complementary to them.
Circular bioeconomy approaches that are adapted to local conditions, that build on existing practices rather than replacing them wholesale, are more likely to be adopted and maintained. Farmers who know their land intimately are better positioned to evaluate what circular interventions will work in their specific context. Communities that retain this knowledge, and that have institutions to transmit it, hold a genuine structural advantage in navigating the circular transition.
This is also why the human dimension of the bio-circular economy matters. It is not simply a question of deploying technology and policy. It is a question of whether rural communities have the networks, the resources, and the confidence to become active participants in a transition that will ultimately be shaped by what happens on the ground.
Building the Ecosystem: The Role of AGRI-BIOCIRCULAR-HUB
The AGRI-BIOCIRCULAR-HUB project is directly engaged with the challenge of making the bio-circular transition accessible and practical for smaller farms and rural communities. Its approach is built on the understanding that the primary barriers to adoption are about connection: connecting farms to technology, to markets, to funding, and to each other.
In Poland, the project ecosystem brings together Poznan University of Life Sciences, which hosts one of Europe’s largest composting and biogas laboratories, with regional advisory bodies and industry partners working on organic waste processing. The Agricultural Advisory Centre and the Wielkopolska Chamber of Agriculture function as translators between research knowledge and farm-level practice, precisely the kind of intermediary that small farms need to navigate the transition.
In Latvia, AREI coordinates the regional pilot with a network that spans deep-tech commercialisation, sector associations, and national innovation agencies. The model demonstrates how knowledge generated at the research level can be linked to farm-scale implementation through an ecosystem that provides both technical support and market connections.
In Ukraine, Lviv Polytechnic leads regional work on circular waste management strategy and bio-based innovation, working with partners that span municipal government, civil society, and regional administration. The approach recognises that in a country rebuilding its rural sector, the bio-circular transition is not a luxury to be deferred. It is a component of a more resilient and sustainable agricultural future.
Across all three ecosystems, the project operates through mentoring, cross-border knowledge exchange, cascade funding support for SMEs, and structured cooperation between research and practice. These are the mechanisms that address the real barriers, not a lack of technology, but a lack of connection between what is known and what is practised on small farms across Europe.
The bio-circular economy will not be built from the top down alone. It will be built, farm by farm and community by community, by the people who work the land and who have the most direct stake in whether that land remains productive and healthy for the generations that follow.
This essay is part of the series Field of the Future: Essays on Biocircular Economy, published within the AGRI-BIOCIRCULAR-HUB project. Funded by the European Union under Horizon Europe (Grant Agreement No. 101186869). Data sources: Eurostat Agricultural Census 2020; EU Agriculture and Fisheries Council, January 2026; European Commission Bioeconomy Strategy 2025; EU Common Agricultural Policy 2023-2027.