New evidence regarding the effects of contract farming on agricultural labor use

Contractual agreements between smallholder farmers and agribusiness companies have gained in importance in many developing countries. While productivity and income effects of contracting in the small farm sector were analyzed in many previous studies, labor market and employment effects are not yet well understood. This is an important research gap, especially against the background of continued population growth and structural transformation. Here, we investigate the effects of two types of contractual agreements between large international processing companies and smallholder farmers on agricultural labor use, household labor allocation, and hired labor demand in Ghana's palm oil sector. We use cross‐sectional survey data and a willingness‐to‐pay approach to control for unobserved heterogeneity between farmers with and without contracts. We find that agricultural labor intensity is substantially reduced through the contracts, because contracting in Ghana is associated with the adoption of labor‐saving procedures and technologies. Simple marketing contracts lead to reallocation of the saved household labor to off‐farm employment, whereas resource‐providing contracts lead to a stronger reallocation of labor within the farming enterprise. Household labor is more affected by labor savings than hired labor.     

Nonpecuniary Benefits to Farming: Implications for Supply Response to Decoupled Payments

We develop a household model wherein farmers allocate labor to maximize utility from leisure, consumption, and nonpecuniary benefits from farming. The model shows that farmers with decreasing marginal utility of income respond to higher decoupled payments by decreasing off-farm labor and increasing farm labor, resulting in greater agricultural output. We then estimate the difference between farm and off-farm returns to labor using data from three nationally representative farm household surveys. The finding of a large on-farm/off-farm wage differential provides compelling evidence of substantial nonpecuniary benefits from farming.     

Farmers’ perceptions and management of risk in rice/shrimp farming systems in South-West Coastal Bangladesh

Farmers in Bangladesh face considerable risk due to fluctuations in biophysical and economic conditions, but the response to these risks is poorly understood. In particular, there is a need to better understand the endogenous management of risk in the rice/shrimp farming systems that have emerged in the inner coastal zone of Bangladesh. This paper draws on a case study of a typical rice/shrimp farming village in Khulna District to explore: (a) farmers’ perceptions of risks and their management responses, (b) risk-return trade-offs within small-, medium-, and large-farm households, and (c) the role of other farm and non-farm activities in mitigating risks to household livelihoods. Farm-level data were collected through a reconnaissance survey, a village census, household case studies, and a sample survey of 73 households. Representative farm budgets were constructed for the three farm-size classes. The key performance indicators calculated were gross margin (GM), net income (NI), and GM per workday of family labour. The riskiness of the rice/shrimp system was assessed for each farm type using farmers’ estimates of low, normal, and high yields and prices to specify triangular distributions. Cumulative distribution functions (CDFs) for GM, NI, and GM per workday were generated. A whole-farm economic analysis was also conducted to assess the relative contributions of different sources of income for each farm type. With access to saline water for shrimp farming in the dry season and fresh water for rice in the wet season, farmers have developed and progressively adapted an alternating rice/shrimp farming system that has minimised the trade-offs between the two crops and provides a good return to household and village resources for all farm types. The system is subject to significant production and market risks, especially the shrimp component. However, farmers have clearly perceived these risks and ameliorated them through a range of production, marketing, and management strategies. With these risk management practices, the rice/shrimp cropping system is economically viable, given the current variation in yields and prices. The greater risk associated with the shrimp component was offset by the renewed stability of the rice component over the past decade, and the risks of the whole cropping system were offset by other farm and non-farm sources of livelihood. Development interventions need to work with farmers to provide further options (suitable rice varieties, solutions to shrimp disease, improved village and transport infrastructure) if this resilience is to be maintained.     

FARM HOUSEHOLD STRATEGIES AND PLURIACTIVITY IN UPLAND SCOTLAND

This paper considers how farm households in Grampians, an upland area of Scotland, are adapting to changing economic and political pressures. Most farms in the area are family farms, and such farm households are being exhorted to diversify their sources of income and to reduce their reliance on agriculture. Based on surveys in 1988 and 1989, this study finds, to the contrary, that only a small proportion of farmers has been reducing reliance on agricultural sources of income, and few anticipate a declining share of their household income to come from farming. Most farmers are loathe to undertake ancillary non-agricultural occupations because of the lower status implied; and farmers in the study area are found to have a very poor understanding of the broad policy context within which they produce. The paper also confirms the finding of other studies that off-farm employment of household members makes a significant contribution to farm household income; and the nature of such pluriactivity and of pluriactive farm households in the area is reviewed.     

CONCEPTS AND MEASUREMENT OF THE INCOMES,WEALTH AND ECONOMIC WELL-BEING OF FARMERS

Concern over the incomes of farmers has been a fundamental but ill-defined component in the agricultural policies of the UK and many other industrialised countries. Attention is drawn to the inability of the UK's annual White Paper aggregate income figure to reveal much of the income position of farm families. Current income from farming is only a partial measure of the potential spending power of farmers: many have off-farm sources of income which must be taken into account when, for example, assessing poverty and these sources appear to be growing in relative importance. In the longer term, capital gains form part of the returns to landowning farmers but are usually ignored. The frequently-found combination of low current incomes and great wealth has prompted the use of a measure of economic status which combines the two. A prime requirement appears to be a more precise statement of the aims of income policy and the use of income measures most appropriate to the circumstances.     

INCOME TAX DATA AND FARM FINANCIAL STATISTICS

Tracing the income patterns of individual farm operators whose major source of income is generally derived from farming indicates that off-farm income is becoming an increasingly important income component. The relative importance of off-farm income has nearly quadrupled during the last 20 years, rising from about 10 percent of total income to about 37 percent of total income. Most of this off-farm income can be traced to wages and salaries. These fractions are heavily dependent upon relative income levels. In 1970, very low income farmers posted an aggregate net farm loss whereas the $15,000 - $20,000 class secured about three-quarters of their total income from farm sources. In this same year, wages and salaries were generally the prime off-farm income source for farmers with an assessed income of less than $20,000. Dividends and interest were more important to farmers with an income in excess of $20,000. These differences are faithfully reflected in the regional compilations. As a percent of total income, off-farm income ranged from 41 percent in Ontario to about 29 percent in Quebec. The composition of off-farm sources also varies considerably between regions. In 1970 the income position of taxable unincorporated farm operators (who relied on the farm for their major source of income) remained relatively unfavorable. These farmers still had one of the lowest average incomes of any major occupational class in Canada, with an income distribution which was relatively equally distributed between income classes and not unlike that of the national average. These assessed income statistics, of course, are not necessarily indicative of the welfare position of the respective occupational classes. The calculations conducted are simply illustrative of how income tax statistics can be utilized to facilitate our understanding of the income structure in primary agriculture today. The exercise simply underlines the observation that: The fact that there are conceptual differences between income tax data and other data sources should not detract from the usefulness of the income tax data …. Income tax statistics can stand as an independent data source for the analysis of a variety of issues [13]. For many purposes the tax definition of a farm operator may be more operational than the concept of a farmer as defined in the Census of Agriculture. We might profit considerably from further analyses which attempt to disaggregate Census farms into more homogeneous farm-types using the tax statistics available.     

PART TIME FARMING—IMPLICATIONS FOR FARM FAMILY INCOME

The Common Agricultural Policy has been more successful at securing food supplies than at providing adequate incomes for small farmers. Among proposals for resolving the problem, part time farming is a promising option. To date, agricultural policy has at best ignored farms below the ‘full time’ threshold, at worst discriminated against them. The new Agricultural Structures policy embodies a more positive approach, however. Robson's paper calls for better information on farm households with other gainful activities. Statistics from the 1983 Farm Structure Survey provide insight into the nature and extent of part time farming in the European Community. Neglect of part time farming in the UK up to now may have stemmed from its perceived irrelevance for agricultural policy. Now that it is being viewed in a more favourable light, policy makers need to be appraised of the facts. Currently about one third of main agricultural holdings in England and Wales are part time farms in the sense that farmer or spouse combines another paid job with farming. Gasson's paper explores the nature of these other jobs and features of their distribution. Following trends in other developed countries, non-farm activities are becoming increasingly important for UK farming families. Growth in part time farming has obvious implications for income support, widely agreed to be the fundamental objective of agricultural policy in western Europe. Existing farm income measures are not adequate for assessing the extent of the income problem in agriculture. Data from the Inland Revenue's Survey of Personal Incomes and the Wye College part time farming survey fill some of the gaps left in official measurements. Non-farming earnings, pensions and investment income contribute significantly to farm household incomes. A majority of part time farming families in England and Wales make more from other sources than from farming. Although average incomes of part time farmers may exceed those of full timers, Hill's paper identifies a section of part time farming families with inadequate incomes from all sources.     

Farmers and Social Innovations in Rural Development: Collaborative Arrangements in Eastern Brazilian Amazon

Brazilian small-scale farmers are seeking new types of collaborations and economic opportunities amid a changing world. Market opportunities, however, have incurred demanding environmental, financial and labor requirements, and created trade-offs between expanding cash crops and maintaining livelihood security. We analyze the Tomé-Açu region in the Brazilian Amazon, where different collaborative models between small-scale farmers and other social agents (industries, government, non-governmental organizations) have emerged. Local farmers are engaging in collective actions and pursuing different types of partnerships, which facilitate knowledge exchange and access to market niches, also helping them overcome the infrastructural and logistical deficiencies that have historically limited rural development in the region. In particular, we discuss the diffusion and adoption of agroforestry and oil palm production systems among small-scale farmers. We examine the challenges and opportunities these partnerships and social innovations have created for local farmers, who are part of heterogeneous groups with distinct roles, assets and contexts. The state-led oil palm program posed challenges to small-scale farmers who experienced asymmetrical relationships within their partnership with private companies. On the other hand, the farmer-led agroforestry model opened new opportunities for farmers who had more flexibility in deciding their production arrangements, developing new agroforestry techniques, and pursuing commercialization pathways. Despite their limited power, small-scale farmers have been able to overcome some structural barriers through innovations, entrepreneurship, and renegotiation of oil palm contract farming. Thus, their ability to engage in both farmer-led agroforestry and state-led oil palm programs provides concrete examples of the potential of local governance based on collaborative arrangements to support sustainable farming production systems.     

Oil Palm Expansion among Smallholder Farmers in Sumatra,Indonesia

Many tropical regions are experiencing a rapid growth of oil palm cultivation. In Indonesia, the world's leading palm oil producer, in addition to large companies, smallholder farmers are increasingly engaged in the oil palm sector. Smallholder oil palm cultivation may contribute to income gains and socio‐economic development. However, land‐use decisions by smallholders are not well understood. Without appropriate policies, negative social and environmental consequences can also occur. To improve the knowledge base, we use data about present and past land‐use decisions from a survey of farm households in Sumatra. Employing duration models, we analyse the determinants and dynamics of oil palm adoption among smallholders. We find that independently operating farmers are currently driving growth rates in the oil palm sector. Smallholder adoption decisions are mainly attributable to regional and village level factors. While the current adoption primarily occurs outside of contracts, previous contractual ties between companies and other farmers in the same village play an important role for individual decisions. Beyond initial adoption, we also analyse later expansion decisions. While expanding the oil palm area subsequent to initial adoption is common among all types of adopters, those without previous contracts are found to expand significantly faster. We conclude that the concessions the government has allocated to palm oil companies in the past have initiated oil palm adoption in the small farm sector, but that the ensuing land‐use dynamics are mostly beyond government control. Some wider implications are discussed.     

Contract farming: opportunity cost and trade‐offs

An important literature has established that participation in contract farming leads to higher incomes and has a number of other beneficial effects on the welfare of participating households. Yet no one has looked at the opportunity cost of and the various trade‐offs involved in participating in contract farming. I look at the relationship between participation in contract farming and income from (i) livestock, (ii) labor markets, (iii) nonfarm businesses, and (iv) agricultural sources other than livestock and contract farming and (v) unearned income. Using data from Madagascar, I find that participation in contract farming is associated with a 79% decrease in how much income per capita the average household derives from labor markets and a 47% decrease in how much income per capita it derives from nonfarm businesses, but also with a 51% increase in how much income per capita the average household derives from agricultural sources other than livestock and contract farming, possibly due to technological spillovers. Thus, even though contract farming has been shown to improve welfare in multiple ways in this context, it looks as though those gains come at the cost of an “agricultural involution” on the part of participating households, who seem to turn away from non‐agricultural activities. This has important implications for structural transformation narratives.     

Farmers’ Income and Production Responses to Rural Taxation Reform in Three Regions in China

The relationship between agricultural taxation and production efficiency has been thoroughly explored for many countries. Recently, China has taken various measures including the rural taxation reform (RTR) to promote grain production and to increase farmer incomes. In this study, we investigate whether the Chinese policy of abolishing rural taxation has improved farm households’ incomes and affected their production decisions. Using household survey data obtained from three regions in China, we estimate the effect of the RTR on farmers’ income. Results show that the RTR has significantly improved farmers’ post‐tax net income by 9.2% in Shandong, 16.9% in Shanxi and 16.8% in Zhejiang. These increments, mostly from farm income rather than from off‐farm income, are much higher than the direct income increase from the tax savings. In addition, we examine the dynamic impact of farmers’ net income, and find that the RTR has a sustained positive income effect in Shandong and Shanxi, whereas its positive effect in Zhejiang appears temporary. We also examine farmers’ production responses to the RTR. Results show that farmers in the three regions respond in different ways: farmers in Shandong significantly increase their labour input, farmers in Zhejiang increase intermediate inputs, whereas Shanxi farmers augment their intermediate inputs and enlarge their crop acreage. It appears that the farmers’ responses to the taxation reform vary due to the agronomic and economic factors in these three regions, suggesting that diverse post‐RTR supplemental policies should be implemented in different regions.     

基于农户调查的重庆市农村土地流转研究

研究目的：探明农村土地流转形式、影响因素和流转后农民的生活保障，了解农民对土地流转的意愿。研究方法：问卷调查，统计分析。研究结果：户主的文化程度对土地流转的影响不大；家庭人均收入水平越高，发生土地流转的比例也越高；离城镇或交通线路近，发生土地流转的比例高；土地流转实现形式主要是自己联系、承租人联系和集体组织；土地转让后的生活保障主要靠外出务工。土地流转的期望收益平均在540元/亩，土地流转方式以免费送给亲戚和租给他人或企业为主，土地流转的时间以1 — 2年为主，土地流转的管理方式希望通过集体组织管理。研究结论：农村土地流转受农户家庭收入、农户所处的区位条件等影响；政府应加强法律、法规建设，加快土地流转市场化；尽快健全与完善农村社会保障体系；发挥政府公共服务职能，规范土地流转管理，引导农民对土地流转的新认识。     

粮食补贴政策对农户收入的影响分析——来自安徽省天长市的实证检验

提高农户收入是我国粮食补贴政策的重要目标之一,然而当前这一政策目标能否实现是一个值得探讨的问题。本文利用安徽省天长市农户的实地调研数据,运用多元线性回归模型实证检验粮食补贴政策对农户收入的影响。结果表明：（1）粮食补贴金额对农户家庭人均纯收入具有显著的负向影响,粮食补贴金额越高,农户农业生产积极性越高,非农就业时间相对越短,在非农报酬率高于农业报酬率的情况下,农户总体收入水平反而会降低。（2）农户收入更多地受到非农收入的正向影响,非农收入已经成为农户收入的主要来源。因此,要提高农户收入水平,国家应实施相应措施,推进现代农业发展,促进农业报酬率的提高,并积极采取有效措施促进农户非农就业合理发展。     

Mobile money,agricultural marketing,and off‐farm income in Uganda

Mobile money (MM) services can contribute to welfare gains in smallholder farm households. Previous research showed that one important pathway for these MM‐related welfare gains is through higher remittances received from relatives and friends. Here, the role of other impact pathways is examined, especially focusing on agricultural marketing and off‐farm economic activities. The analysis builds on panel data from smallholder coffee farmers in Uganda. Regression models show that the adoption of MM technology has contributed to higher household incomes and consumption levels. Off‐farm income gains are identified to be an important pathway, also beyond remittances. Typical off‐farm income sources are small businesses in trade, transport, and handicrafts, which benefit from novel savings and money transfer opportunities through MM. In terms of agricultural marketing, MM users sell a larger proportion of their coffee as shelled beans to buyers in high‐value markets, instead of selling to local traders immediately after harvest. MM services help to reduce cash constraints and facilitate transactions with buyers from outside local regions. In conclusion, MM can contribute to rural development through various important pathways. Analysis of adoption patterns suggests that MM services are socially inclusive.     

Farmers’ risk preferences and their climate change adaptation strategies in the Yongqiao District,China

Farmers’ risk preferences play an important role in agricultural production decisions. This study characterizes risk preferences among farmers in Yongqiao and determines how these risk preferences are related to their choices regarding climate change adaptation strategies. We find that most farmers in the study area were aware of climate change. They were taking measures to protect their livelihoods against perceived changes to the local climate. The risk experiment result shows that the representative subject was risk averse, and women were more risk averse than men. The relationships between farmers’ risk preferences and different climate change adaptation choices were different. Farmers’ risk aversion was negatively and significantly related with adaptation strategies on planting new crop varieties and adopting new technology, but it had a significantly positive effect on purchasing weather index crop insurance. The results also indicate that the level of education, farming experience, farm size, household income and perception of climate change impacts influence farmers’ adaptation decisions.     

移民搬迁农户收入来源的区位差异研究

移民搬迁的迁入区条件有较大差异,致使移民户收入差距拉大。以宁夏为例,采用典型调查法选取"十二五"期间移民搬迁的若干具有代表性移民安置点,设计出反映地理位置、自然环境、经济条件等方面的指标进行Q型聚类分析,将不同安置点划分为4类,比较各类特点以及农户生计特点;对分布在四类安置点的农户进行抽样调查,用描述统计方法比较家庭收入的均值和标准差,反映不同迁入区移民户收入来源及其差异,并对差异原因分析。研究结果表明:(1)移民农户收入与地域有直接关系,各类地区由于自然条件、资源禀赋以及政策扶持差异而导致移民收入有较大差距。移民区公共投入建设的力度、政府组织培训、劳务输出对移民收入及来源有很大影响;各地的经济基础也直接影响到移民的收入水平;移民户个人因素也不容忽视。(2)移民区后期建设应区别对待,因地制宜,改善条件,加大资源条件差的安置区的基础建设投入力度;加强产业培育,引导致富;通过各种形式组织农民培训;重视移民区社会管理,健全管理体系,建设和谐新村。     

Multiple job holdings among dairy farm families in New York and Ontario

Previous empirical studies of multiple job holding have tended to focus on the characteristics of those obtaining off-farm employment and the factors affecting the hours supplied to those obtaining off-farm activities. None of these studies have explicitly addressed the reasons behind the decision to seek off-farm employment. Neither have they been able to examine in-depth the important issue of how this major component of the farm sector responds to alternative policies, since most studies have used cross-sectional data for a given region. A comparison between countries would permit the analysis of how multiple job holding responds to differing government policies. The purpose of this paper is to examine the reasons for and factors affecting multiple job holdings of dairy farm families in neighboring regions of two counties, United States and Canada. The bordering regions of New York and Ontario have similar geographic conditions but significantly different farm support and social service policies. The results indicate the importance of farm income on why people work off the farm and provide evidence of multiple job holding as a flexible mechanism for coping with changes in the economic environment facing the household. For operators, the driving characteristics influencing off-farm labor participation is the farm's financial position. The supply-managed milk marketing system ensures higher and more stable returns for Ontario dairy farm labor. In contrast, it is family demographics, educational level and social support policy that appears to largely influence spousal off-farm employment decisions. Free medical care in Ontario lowers the reservation wage for household members. The effect of these farm and social support policies on the relative returns to labor in agriculture and non-farm employment explains the lower participation rate and hours supplied in off-farm work by both operators, and hours supplied in off-farm work by both operators and spouses in Ontario dairy farm household.     

Impacts of capital and land constraints on the economics of new livestock technology in western Kenya

The introduction of new forages and milk marketing improvements was projected to permit even the smallest modeled farms in a western Kenya region to adopt dual-purpose goats and thereby improve family income and nutrition. Expanded credit permitted modeled medium and large farms, especially, to vigorously exploit these innovations; credit also expanded income more than did goat management improvements. Because credit, extension assistance, marketing improvements, and new forages will leave projected incomes of small farmers below those of medium and large farmers in the study region, development of off-farm jobs may still be necessary to supplement the incomes of this fast growing group. The marginal value of capital for medium and large farmers with new livestock technology was high. This suggests that government-subsidized credit might be unnecessary. With proper infrastructural and legal support, private capital markets might develop as new livestock technology and marketing improvements expand the demand for borrowing.     

Rural household incomes and land grabbing in Cambodia

This paper empirically quantifies environmentally augmented rural household incomes in Cambodia and analyzes how economic land concessions (ELCs) affect such incomes. Data is derived from a structured survey of 600 randomly selected households in 15 villages in three study sites in Cambodia, where local livelihoods are highly reliant on access to land and natural resources, supported by qualitative data from focus group discussions. Gini coefficient decomposition, multiple regression models, and propensity score matching (PSM) models were employed to analyze the composition of income portfolios, determinants of major income sources, and the impacts of land grabbing on incomes. Results documented high reliance on environmental income (32–35% of total household income) and farm income (51–53%) across income quartiles; demonstrated the variation in product composition across quartiles and the contribution of each major product to income inequality; and identified the main household characteristics influencing absolute and relative incomes. ELCs were found to consistently have negative impacts on household total income, environmental income, size of available cultivable land and livestock holdings, and increasing the distance to forests. The total household annual income subjects to ELCs were estimated to decrease by 15–19%. While providing some employment opportunities, we find no evidence of positive income effects of ELCs on households in the areas where ELCs are located.     

Unconventional adjustment strategies for rural households in the less developed areas in Greece

International competition in agricultural production is intensifying following the implementation of the 1993 accord of the General Agreement on Tariffs and Trade. The production of conventional farm products in surplus is being discouraged by means of indirect economic disincentives. The Common Agricultural Policy has already adjusted to unprotected national markets within the European Union and greater market orientation is being achieved mainly through price reductions. Farmers in the less developed areas in Greece, where agricultural activity is still the main source of income and employment, have been responding to policy reforms by seeking part-time employment and income in non-farm enterprises. The adoption of alternative, unconventional farm enterprises that use farm resources in an innovative and quantitatively different way does have the potential for bringing in a new source of income to farm business. For the purpose of this research three adjustment strategies were recognised. The ‘conventional’ (no change) pathway is based on traditional, region-specific products, production methods and services. The adoption of the ‘new crop’ pathway refers to the redeployment of resources into new agricultural products, whereas farms on the market integration Pathway redeploy resources into new marketing services and agricultural product processing on the farm. The new crop and the market integration pathways are identified as unconventional adjustment strategies. Results derived from multinomial logit analysis highlight the major constraints and opportunities associated with the adoption of new crops and market integration practices. Farmers who have adopted unconventional practices are influenced by factors external to the farm. such as contacts with institutions, and have a high probability of having higher debts. These farmers are likely to depend heavily on seasonal labour and rented land. The fact that market integration activities are associated with smaller farms in conjunction with off-farm work signifies the importance of establishing an integrated rural development policy approach. Public policy involvement in enhancing dissemination of information concerning unconventional enterprises is emphasised.