The sentence is easier to get your head round when you realise that the whole complex phrase
areas of Europe [that have been abandoned (as farming shrinks)] is one long noun phrase: it's all the subject of
can be transformed...
NB I read your title and confess that when I first glanced at the sentence and homed in on the word
shrinks followed by a verb, I did think for a split second that
shrinks might be a noun. Psychotherapists for the agricultural sector, perhaps?
👁 Wink ;) This illustrates one of the things that makes reading English difficult. With so few inflections in English, the same word form can function as multiple parts of speech, so we sometimes have to read a large chunk of text before we can parse a sentence correctly.