Agritourism and off‐farm work: survival strategies for small farms

This study considers agritourism and off‐farm work as income diversification choices simultaneously and analyzes factors influencing such choices. Further, the study assesses the impact of agritourism, off‐farm work, and both on gross cash farm income and total farm household income. We utilized large set of nationwide farm survey data and selectivity‐based multinomial choice model. An important finding of our study is that small farms have higher household income if they choose both income diversification strategies rather than a single strategy. Results suggest that education, age of the operator, financial condition, and location of the farm are important factors driving income diversification alternatives. Finally, our study indicates that accounting for selectivity is essential to ensure unbiased and consistent estimates.     

Effect of off‐farm income on smallholder commercialization: panel evidence from rural households in Ethiopia

This article investigates how off‐farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double‐hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off‐farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off‐farm earnings negatively affect the marketed surplus. This indicates that farmers use off‐farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land‐poor households participating in off‐farm work in the process of agricultural commercialization.     

Off‐farm work,technical efficiency,and rice production risk in Taiwan

This article investigates the differences in yield production, production efficiency, and yield risk for farmers both with and without off‐farm work. Using a nationwide survey of rice farmers in Taiwan, we estimate two stochastic production frontier models that accommodate technical inefficiency and production risk simultaneously for farmers both with and without off‐farm work. The stochastic dominance criterion is then applied to compare the differences in the distributions of the estimated technical efficiency and yield risk between groups. The empirical results indicate that these two groups of farmers use resources in different ways, and off‐farm work is not necessarily associated with lower technical efficiency. For farmers in the lower percentiles of the efficiency distribution, those with off‐farm work are more efficient than their counterparts without off‐farm work. In addition, farmers with off‐farm work face higher production risk and this result is robust for the entire distribution.     

Off‐farm work and technical efficiency on U.S. dairies

In this study, we investigate the impact of an increase in farm households’ off‐farm work on technical efficiency (TE) of U.S. dairies. We present a theoretical framework that implies that an increase in farm household off‐farm work decreases TE. We use two nationally‐representative samples of U.S. dairies (2010 and 2005 Agricultural Resource Management Surveys) and a parametric approach (stochastic frontier analysis) to empirically test the hypothesis. Results are generally consistent with the hypothesis and show that an increase in off‐farm work by the farm household is associated with a significant decrease in TE. In addition, results show that there is a statistically significant difference in TE between small, medium, and large farms. Small farms are associated with significantly higher off‐farm work and have lower TE than large farms, which implies that less off‐farm work by households with larger farms is at least partially responsible for the evidence of economies of scale in the U.S. dairy industry.     

Interrelated labor decisions of farm couples: a censored response analysis of off‐farm work

Farm couples' labor market responses are partly the discrete choice of entering the off‐farm labor market and partly the continuous choice of off‐farm working hours, given entry. Such a setting is interesting when examining the increasing occurrence of multiple job‐holdings among farmers in Western economies. Most existing analyses of off‐farm labor supply only model the decisions of the farmer, not the joint decisions of the farm couple. This article presents a framework for handling such interrelated discrete/continuous choices, involving also farm production and household consumption. The derived two‐equation sub‐model for husband/wife's censored labor responses is estimated from a 10‐year Norwegian panel data for 342 farms. The results agree to some extent with earlier studies, but are more informative because of the longer panels—which allows a more extensive examination of latent heterogeneity and behavioral persistence—because it provides cross‐effects in the spouses' labor supplies. The results show some interesting differences between how the independent variables influence the labor supply of operator and spouse. This is most evident for the cross‐effects of education, children, and wage rate. Overall, the results strongly support applying a panel‐censoring model that accounts for latent heterogeneity in this context.     

Self‐protection from weather risk using improved maize varieties or off‐farm income and the propensity for insurance

We investigate how self‐protection from the adoption of Improved Maize Varieties (IMV) and off‐farm income affects risk premiums for smallholder maize producers in Uganda. To unbundle these effects, we specify the cost of risk to explicitly capture four risk components—mean, variance, skewness, and kurtosis. Using unique plot‐level panel data for Uganda, we estimate and test moments of a flexible production function based on an expanded form of the Johnson S_U family distribution and proceed to simulate the degree of responsiveness of risk premiums and welfare estimates to marginal changes in the share of land under IMV and off‐farm income. Scenarios of joint adoption of IMV accompanied with low and high application of inorganic fertilizer, and the effect of off‐farm income when there is high and low supply of farm labor are examined. Results show that the use of IMV and off‐farm income substantially reduces risk premiums and the individual effect is much higher under low fertilizer application and high supply of farm labor, respectively. Thus implying that self‐protection is likely to reduce the propensity for index insurance especially if its design fails to consider the reduction in downside risk.     

Farm and farmer characteristics and off‐farm work: evidence from Algeria

Off‐farm work is a widespread, two‐edged, phenomenon that can help both the survival and the demise of small‐ and medium‐sized agricultural exploitations. Given the prevalence of poverty in rural areas, nonfarm income has been credited with helping farmers to survive. But the observed shrinking of rural areas has also raised the question of whether off‐farm work is pulling farmers permanently away from farming. This paper explores the impact of farmer characteristics on the decision to work off‐farm in developing countries where this phenomenon has been largely neglected. A review of theory and prior empirical work suggests four main hypotheses which we test empirically. The results suggest that while some farmer characteristics appear to be universal, others appear to be country‐ or culture‐specific.     

Impact of off‐farm income on food expenditures in rural Bangladesh: an unconditional quantile regression approach

This study examines the effects of off‐farm income on food expenditures of rural Bangladeshi households. Our analysis yields unbiased estimates of the unconditional impact of off‐farm income on food expenditures and reveals the heterogeneous effects that occur across the distribution of total food consumption expenditures. The findings suggest that the impacts of off‐farm income are uniformly positive across the unconditional quantile regression and significantly increase food consumption expenditures for all quantiles, except for the 25th quantile. In addition, we found that schooling, experience, and location of the household increase the food expenditures of rural households. Most importantly, this article argues that female‐headed rural households in which the female works off the farm tend to have significantly lower food expenditures.     

Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers

The growing importance of economic factors in farmers' decisions to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. In general, published analyses so far have not considered differential uncertainties, abilities to control production risk, and farmers' risk preferences between conventional and organic practices when comparing these techniques. Our article attempts to assess this issue. We use a model of farmer decision under risk to analyze the differential values between organic and conventional Spanish arable crop farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different production risks as well as different aversions to risk. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques.     

Adoption of climate‐smart practices and its impact on farm performance and risk exposure among smallholder farmers in Ghana

Increased climate variability during the last four decades has made the agricultural environment in many developing countries more uncertain, resulting in increasing exposure to risk when producing crops. In this study, we use recent farm‐level data from Ghana to examine the drivers of individual and joint adoption of crop choice and soil and water conservation practices, and how adoption of these practices impacts on farm performance (crop revenue) and exposure to risks (skewness of crop yield). We employ a multinomial endogenous switching regression model to account for selectivity bias due to both observable and unobservable factors. The empirical results reveal that farmers’ adoption of crop choice and soil and water conservation leads to higher crop revenues and reduced riskiness in crop production, with the largest impact on crop revenues coming from joint adoption. The findings also show that education of the household head, access to extension and weather information influence the likelihood of adopting these practices. Thus, enhancing extension services and access to climate information and irrigation can reduce gaps in adoption of soil and water conservation and crop choice, considered as climate‐smart practices that will eventually improve crop revenues and reduce farmers’ exposure to climate‐related production risks.     

The Effect of Mandatory Agro‐Environmental Policy on Farm Fertiliser and Pesticide Expenditure

EU farmers are subject to mandatory cross‐compliance measures, requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for farmers to change their behaviour towards the environment. We apply quasi‐experimental methods to measure the causal relationship between cross‐compliance and some specific farm environmental performance. We find that cross‐compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro‐environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance.     

O‐Ring production on U.S. hog farms: joint choices of farm size,technology, and compensation

We hypothesize that hog production can be characterized by complementarities between new technologies, worker skills, and farms size. Such production processes are consistent with Kremer's O‐ring production theory in which a single mistake in any one of several complementary tasks in a firm's production process can lead to catastrophic failure of the product's value. In hog production, mistakes that introduce disease or pathogens into the production facility can cause a total loss of the herd. Consistent with predictions derived from the O‐ring theory, we provide evidence that the most skilled workers concentrate in the largest and most technologically advanced farms and are paid more than comparable workers on smaller farms. These findings suggest that worker skills, new technologies, and farm size are complements in production. The complementarities create returns to scale to large hog confinements, consistent with the dramatic increase in market share of very large farms over the past 20 years.     

Short‐run and long‐run dynamics of farm land allocation: panel data evidence from Denmark1

This study develops and estimates a dynamic multi‐output model of farmers’ land allocation decisions that allows for the gradual adjustment of allocations that can result from crop rotation practices and quasi‐fixed capital constraints. Estimation is based on micro‐panel data from Danish farmers that include acreage, output, and variable input utilization at the crop level. Results indicate that there are substantial differences between the short‐run and long‐run land allocation behaviour of Danish farmers and that there are substantial differences in the time lags associated with different crops. To our knowledge, this is the first dynamic micro‐model of land allocation estimated on data from the temperate climate zone. Since similar farming conditions are found in northern Europe and parts of the United States and Canada, this result may be of wider interest.     

The impact of agricultural policy on farm income concentration: the case of regional implementation of the CAP direct payments in Italy

One of the objectives of agricultural policy worldwide concerns the support of farm income. Common Agricultural Policy direct payments (DPs) are the main instruments to support farm income in the European Union. This article addresses their role in the concentration of farm income. This is done by calculating the Gini coefficient and its disaggregation in a large sample of Italian farms in the period between 2006 and 2007. Although this approach has been used to develop ex‐post analysis in previous studies, this article is innovative given that it is used here in an ex ante analysis aimed at evaluating the likely impact of a recent reform proposal. This latter requests changing the current model to a regional model of DPs application to make payment rates (i.e., payment per hectare) homogeneous among farms in the same region. The analysis shows that DPs and farm incomes are both very concentrated but that DPs allow for an income concentration reduction in Italian farms. The shift to a regional implementation reduces DPs concentration and, to a limited extent, farm income concentration. Of the considered regionalization scenarios, those that redistribute DPs among regions are the most effective in reducing concentration. The extension of the Gini considered approach to an ex ante setting seems effective because it provides insights that could feed the policy debate regarding the forthcoming reform.     

The producer welfare effects of trade liberalization when goods are perishable and habit‐forming: the case of asparagus

Asparagus is a perishable, highly seasonal crop. We find that out‐of‐season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.     

Combining Stated and Revealed Preferences on Typical Food Products: The Case of Dry‐Cured Ham in Spain

An extensive body of research concerns the valuation of EU certification schemes of quality based on the origin of food products. This literature focuses mainly on stated preferences (SPs) and reported behaviours by the consumers. We combine consumers’ SPs, obtained through a conjoint ranking experiment, with revealed preferences (RP), obtained through a retail scanner database. We evaluate SPs as predictors of RP, and investigate whether SPs and RPs are consistent. Dry‐cured ham in Spain is chosen as the anchor product, mainly because of its broad customer base and long history of origin certification. A ‘trick’ nested logit model with non‐identical and identical samples of consumers is estimated to answer each of the objectives. Results show that, irrespective of the analysed samples, SP can predict general market trends and choices but not accurately predict market shares, and that consumers’ actual behaviour is partly consistent with their SPs. We find that consumers prefer ham produced in Teruel, compared with unspecified Spanish origin. Quality Certification and a Distributor’s Brand are preferred over the alternatives of no quality label or identified with a brand owned by the producer. Interestingly, SPs for the Quality Certification and the distributor’s brand lead to an over‐ and under‐estimation, respectively, of the market share.     

Gender and agriculture in sub‐Saharan Africa: introduction to the special issue

This special issue contributes to the literature on gender differences in sub‐Saharan African agriculture primarily by using new and innovative micro‐data. The first six articles have a strong focus on understanding the extent and drivers of gender differences in land productivity and use data from nationally representative household surveys that are implemented under the Living Standards Measurement Study‐Integrated Surveys on Agriculture (LSMS‐ISA) initiative. The LSMS‐ISA data are multi‐topic, with geo‐referenced household and plot locations, and information on production and identity of managers and owners at the plot level. The last two articles in the volume rely on in‐depth quantitative and qualitative case study data, which, in combination with the nationally representative data, allow for greater insights into the extent and correlates of gender differences in sub‐Saharan African agriculture. While there does seem to be persistent evidence of gender gaps, the studies find the sources of these gaps to vary within and across countries. This makes designing policies to address gender gaps more challenging, yet of crucial importance. What is clear is that the failure to directly and explicitly address the underlying causes of the disparities is likely to end up exacerbating the observed gender gaps.     

Africa's changing farm size distribution patterns: the rise of medium‐scale farms

This study assesses changes over the past decade in the farm size distributions of Ghana, Kenya, Tanzania, and Zambia, drawing on two or more waves of nationally representative population‐based and/or area‐based surveys. Analysis indicates that much of Sub‐Saharan Africa is experiencing major changes in farm land ownership patterns. Among all farms below 100 hectares in size, the share of land on small‐scale holdings under five hectares has declined except in Kenya. Medium‐scale farms (defined here as farm holdings between 5 and 100 hectares) account for a rising share of total farmland, especially in the 10–100 hectare range where the number of these farms is growing especially rapidly. Medium‐scale farms control roughly 20% of total farmland in Kenya, 32% in Ghana, 39% in Tanzania, and over 50% in Zambia. The numbers of such farms are also growing very rapidly, except in Kenya. We also conducted detailed life history surveys of medium‐scale farmers in each of these four countries and found that the rapid rise of medium‐scale holdings in most cases reflects increased interest in land by urban‐based professionals or influential rural people. About half of these farmers obtained their land later in life, financed by nonfarm income. The rise of medium‐scale farms is affecting the region in diverse ways that are difficult to generalize. Many such farms are a source of dynamism, technical change, and commercialization of African agriculture. However, medium‐scale land acquisitions may exacerbate land scarcity in rural areas and constrain the rate of growth in the number of small‐scale farm holdings. Medium‐scale farmers tend to dominate farm lobby groups and influence agricultural policies and public expenditures to agriculture in their favor. Nationally representative Demographic and Health Survey (DHS) data from six countries (Ghana, Kenya, Malawi, Rwanda, Tanzania, and Zambia) show that urban households own 5–35% of total agricultural land and that this share is rising in all countries where DHS surveys were repeated. This suggests a new and hitherto unrecognized channel by which medium‐scale farmers may be altering the strength and location of agricultural growth and employment multipliers between rural and urban areas. Given current trends, medium‐scale farms are likely to soon become the dominant scale of farming in many African countries.     

The impact of coffee certification on small‐scale producers’ livelihoods: a case study from the Jimma Zone,Ethiopia

What is the impact of product certification on small‐scale farmers’ livelihoods? To what extent does the participation of Ethiopian small‐scale coffee farmers in certified local cooperative structures improve their socioeconomic situation? To answer these questions, this article employs household data of 249 coffee farmers from six different cooperatives collected in the Jimma zone of Southwestern Ethiopia in 2009. Findings show that the certification of coffee cooperatives has in total a low impact on small‐scale coffee producers’ livelihoods mainly due to (1) low productivity, (2) insignificant price premium, and (3) poor access to credit and information from the cooperative. Differences in production and organizational capacities between the local cooperatives are mirrored in the extent of the certification benefits for the smallholders. “Good” cooperatives have reaped the benefits of certification, whereas “bad” ones did not fare well. In this regard the “cooperative effect” overlies the “certification effect.”     

Impacts of Animal Well‐Being and Welfare Media on Meat Demand

This article provides the first known examination of how animal welfare information provided by media sources impacts beef, pork and poultry demand. Results suggest that media attention to animal welfare has a small, but statistically significant impact on meat demand. Long‐run pork and poultry demand are hampered by increasing media attention whereas beef demand is not directly impacted. Loss in consumer demand is found to come from exiting the meat complex rather than spilling over and enhancing demand of competing meats. An outline of economic implications is provided for the broader discussion of animal welfare.