Why do farmers have so little interest in futures markets?

A farm financial model with leverage and investment in two farm enterprises is specified. The model is extended to incorporate futures hedging and the Separation Theorem is used to show that optimal hedging is zero. The assumption of a risk‐free asset is relaxed and, while this leads to a violation of the Separation Theorem, the result that optimal hedging is zero is maintained providing that futures markets are efficient. It is concluded that if capital markets are efficient then farmers will have little interest in futures markets except to speculate.     

A Genetic Algorithm Approach to Farm Investment

A farm portfolio model is specified with two risky enterprises and a risk-free asset which may be held short or long by the farmer. The model is solved numerically using a genetic algorithm. It is shown that the assumption of competitive adaptation leads to a violation of normative efficiency. Those who survive are not the most efficient in a normative sense.     

Off-farm labor supply responses to permanent and transitory farm income

A sample of Iowa farm couples is used to evaluate whether off‐farm labor supply decisions respond to permanent and transitory components of farm income. Off‐farm labor supply of both spouses declines in response to increases in permanent farm income. Farm wives also reduce off‐farm labor supply in response to positive transitory farm income shocks. Consequently, one mechanism farm households use to smooth their goods consumption when facing fluctuating farm income is to modify their consumption of leisure. Ability to smooth goods consumption does not imply the absence of liquidity constraints among farm households unless leisure consumption is also smoothed.     

Income Mobility and Income Inequality in Scottish Agriculture

The paper explores the distributional consequences of farm income mobility in Scotland, focusing on the extent to which farm income inequality is a chronic as opposed to a temporary phenomenon and on the nature of the dynamic processes driving changes in farm income inequality over time. The empirical results reveal that the majority of farm income inequality was long‐run or structural in nature, reflecting differences in both farm business size and farm‐specific factors such as land quality, managerial ability and business structures. Evidence of absolute convergence in farm incomes is explained by short‐run adjustments towards equilibrium or target incomes conditional upon prices, technology and farm business size, with farm business growth conditional upon survival found to have had no significant redistributive effect.     

Farm work, off-farm work, and hired farm labour: estimating a discrete-choice model of French farm couples' labour decisions

We model jointly several types of discrete-choice labour decisionsof farm couples: farm work, off-farm work and hired farm labour.Rather than estimating a set of reduced-form participation equationsthat is subject to an internal inconsistency problem, we estimatea 16-choice multinomial model. We find that farm labour of operatorsand of spouses are substitutes. Hired farm labour increaseswith the farmer's qualifications, perhaps substituting for thecouple's labour inputs. Other adults in the household substitutefor the farm labour input of the farm couple and hired workers.We find that the organisation of work by French farm householdshas changed over time, in the direction of a more equal sharingof tasks and responsibilities between members of the farm family.     

FARM HOUSEHOLD BEHAVIOUR AND THE TRANSITION TO POST-PRODUCTIVISM

This paper proposes a theoretical framework for examining how farm households will respond to the reversal of productivist farm policies and applies this to a longitudinal study of farm households in upland Scotland over the period 1987-91. The paper argues that the actions of farm households may be understood not only in terms of their structural situation but also as an expression of the values and motivations which underlie behaviour (their disposition-to-act). A model is proposed, in which a farm household's disposition-to-act interacts with the internal resources of the farm and household, and with the external context (markets, policies, social and cultural values), in influencing behaviour. Empirically, this model is then used to explore changing farm structures, changing allocations of labour, changing sources of farm household income, and engagement with policy measures among a sample of 300 upland farm households. The results suggest that there will be considerable diversity in farm household behaviour during the transition to post-productivism, with widespread reluctance to adjust to the new imperatives.     

Determinants of off‐farm work and its effects on farm performance: the case of Norwegian grain farmers

Limited attention has been given in the literature to the impact of off‐farm work on farm performance. More knowledge about the determinants of part‐time farming and its effects on farm performance could help policymakers to introduce better targeted rural development policies. The aim in this article is to fill part of the above‐mentioned gaps by analyzing factors that influence the choices of off‐farm work by either the farmer alone or jointly by both the farmer and partner; and simultaneously examining how off‐farm work influences farm performance. These analyses were based on an unbalanced panel data set from Norwegian grain farms during 1991 to 2005. Among the determinants of off‐farm work hours, we found that, in addition to demographic, time trend, and some regional effects, there was a significant negative effect of farm output on farmers' off‐farm work hours. The production function results revealed that off‐farm work had a positive effect on farm output, at first increasing but then decreasing with increase in hours spent in off‐farm work. Furthermore, our analysis revealed no systematic effect of off‐farm work on farm technical efficiency.     

Where's the economics? The core discipline of farm management has gone missing!*

Economic illiteracy is abundant in farm management analysis. Failure to understand that economics is the core discipline of farm‐management analysis and failure to apply the whole‐farm approach leads to wrong questions being asked and wrong answers being given. The power of economic thinking is in making sense of resource allocation questions in farm systems characterised by much complexity and powerful dynamics. The challenge for those who continue to work in farm management economics is to re‐establish theoretically sound farm‐management analysis based on economics as the core discipline.     

国有林场的改革探索与实践——原山林场和塞罕坝林场的成功经验

国有林场是我国森林资源的重要储备基地和生态建设的重要载体,但传统的管理体制和经营机制很难适应以生态建设为主的林业发展战略。山东省淄博市原山林场和河北省塞罕坝机械林场两个国有生态公益型林场坚持以营林为基础,探索市场化改革路子,转变经营管理体制,优化内部管理机制,实行以人为本,取得了显著成效。其成功实践证明,国有林场改革必须坚持分类改革,加强林场的社会保障体系建设,引入市场机制,建立适应新型经营管理体制的人事、劳动和工资制度。     

Off‐Farm Work,Intensity of Government Payments,and Farm Exits: Evidence from a National Survey in the United States

The last three decades have witnessed the continued exit of households from primary agriculture in the United States, where the average annual gross exit rate has averaged 10% per year. Understanding exit behavior is one key to future farm structure, management of abandoned land, depopulation of rural areas, and agricultural policy, including government program payments. This study empirically estimates the determinants of exit decisions of farm households. Particular attention is given to the roles of intensity of government payments and off‐farm work decisions of farm couples in the exit decision. Using a large farm‐level survey and controlling for endogeneity, results indicate that farm households with reduced intensity of government payments are more likely to exit farming. Households where the operator spouse works off the farm are more likely to exit farming. Additionally, households with older farmers, with the farm operator and spouse raised on a farm, and households operating farms located in Northern Great Plains are more likely to exit farming.     

FARM MANAGEMENT ADVICE TO PEASANT AGRICULTURE: THE TRANSFER OF TECHNOLOGY

This paper considers the role of farm management in ensuring compatibility of extension content with the motives and constraints of individual peasant farmers. It emphasises the need for a modicum of farm management expertise in the communication of innovation from extension agent to farmer but questions the suitability of advanced farm management techniques for this purpose. It is argued that, if the potential contribution of farm management is to be realised, there is a need for an intermediate and appropriate farm management technology.     

PARTICIPATION OF FARM OWNERS IN FARM AND OFF-FARM WORK INCLUDING THE OPTION OF FULL-TIME OFF-FARM WORK

The option of working full-time off the farm is generally neglected in farmers' time allocation studies. In this paper, a generalised multinomial logit model, in which the choices are working only on the farm, allocating the time between farm and off-farm work, or working only off-farm, is estimated using Israeli data. The results show that the explanatory variables have significantly different effects on utility for off-farm workers who also work on the farm versus those who do not. There seem to be incentives to work full time rather than part time off the farm. These conclusions cannot be reached if farm owners who do not work on the farm are excluded from the estimation. The conclusions imply that policy intended to encourage pluriactivity could instead result in increased specialisation in full-time farm work or full-time off-farm work if it does not target the right incentives.     

Stability of Farm Income and the Role of Nonfarm Income in U.S. Agriculture

This study measures the variability in real net farm income in the U.S. agricultural sector and per farm and determines if variability has diminished over 1933 to 1999. Second, the role of nonfarm income in reducing the variability in total farm household income is examined. Results indicate that the variability in real net farm income in the sector and at the farm level has not diminished and that nonfarm income has helped to reduce the variability in total farm household income.     

Entry, Exit, and Farm Size: Assessing an Experiment in Dairy Price Policy

This article models and estimates the forces behind farm exits and changes in herd-size among Connecticut dairy farms under the New England Dairy Compact. A model of sunk costs and farm capital investment is used to specify two econometric estimations: a random effects probit model of farm entry and exit and an autocorrelated generalized least squares panel data model of farm size. The Dairy Compact's price strategy reduced farm exits and moderately increased cow numbers. In contrast, development pressures and historically low unemployment rates increased farm exits.     

Off-Farm Work Participation of Israeli Farm Couples: the Importance of Farm Work Participation Status

This article claims that coefficients of off-farm work participation equations for farm residents might be estimated inconsistently if selectivity based on farm participation is ignored. Participation equations will be different for farm residents who do not work on farm, especially with respect to the dependence of reservation wages on farm attributes. I estimate an endogenous switching regression model in which farm and off-farm participation equations are estimated jointly while the off-farm participation coefficients are different for those who work on farm and those who don't. Using the 1981 Israeli Census of Agriculture data, I reject the hypothesis of insignificant selection bias and the hypothesis of equal coefficients in the two subsamples.     

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.     

A NOTE ON OFF-FARM INCOME OF FARM FAMILIES IN AUSTRALIA*

Past studies of the farm sector have concentrated on the use of farm based resources in the farm context alone. Changes in the economic environment have widened the opportunities available to these resources and have thus tended to make this narrow definition of the farm firm less relevant. Some recognition of this situation has emerged in more recent studies. The aim of this note is to collate and examine the degree to which farm labour resources are employed in off-farm activities in Australia. The main conclusion drawn from the evidence available is that, while in aggregate part-time farming is a fairly minor activity, in some sectors it is increasing in importance and constitutes a considerable outlet for farm based labour resources.     

Agricultural Policy Reform and Off‐farm Labour Decisions

Off‐farm labour decisions of a sample of Kansas farmers are evaluated. The central question of our analysis pertains to whether 1996 US farm policy reforms may have altered the decisions to work off the farm. The effects of policy decoupling on off‐farm labour are complex: different aspects of policy changes can have opposing effects on off‐farm work decisions. Essentially, this makes this issue an empirical question. Results show that the introduction of fixed, decoupled payments in 1996 might have reduced the likelihood of off‐farm labour participation. However, the new policy environment may have increased farm households’ revealed aversion to risk, motivating a higher participation in non‐farm labour markets. The effects of 1996 policy reforms on farm income variability could have been attenuated by changes in US crop insurance programmes and by an increase in emergency assistance payments towards the end of the 1990s. The reduction in price supports may have increased the motivation for working off the farm. The net effect of the overall reforms on off‐farm work participation is not likely to have been large.     

Do family farms really converge to a uniform size? The role of unobserved farm efficiency*

We analyse the growth of family farms in Israeli cooperative villages during a period of economic turmoil. We use instrumental variables to account for the endogeneity of initial farm size, and correct for selectivity as a result of farm survival. We also include a technical efficiency index, derived from the estimation of a stochastic frontier production model, as an explanatory variable. Our aim is to check whether ignoring efficiency could have been the reason for convergence results obtained elsewhere in the literature. We found that technical efficiency is an important determinant of farm growth, and that not controlling for technical efficiency could seriously bias the results. In particular, larger farms are found to grow faster over time, while without controlling for technical efficiency the farm growth process seemed to be independent of initial farm size. The increasing polarisation of farm sizes in Israel has ramifications for the inefficiencies induced by the historical quota system, for the political power of the farm sector and for the social stability of farm communities.     

A supply‐side analysis of agritourism: Evidence from farm‐level agriculture census data in Taiwan

Due to consumers’ increased demand for leisure and farmers’ need for income diversification, researchers and policymakers have significant interest in topics related to agritourism. This study provides a supply‐side analysis on agritourism using Taiwan as a case study. Utilising a sample of 720,148 family farms from the 2010 agriculture census survey in Taiwan, we quantify the effects of engaging in the agritourism business on farm income, on farm succession, and on family members’ labour supply decisions between on‐farm and off‐farm work. An analytical framework that combines the doubly robustness regression model and semiparametric estimation is proposed to address the endogeneity bias. Results indicate that participation in agritourism increases farm income and family farm succession. Farms engaging in agritourism also have more family members working on the farm, and fewer family members working off‐farm, compared to farms not engaging in agritourism. Although agritourism enterprises are developed to meet consumers’ demand for leisure, our results show that they also improve the economic welfare of farm households.