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.     

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.     

What do Agricultural Income and Productivity Measurements Really Mean?

Statistical data on labour productivity and income in agriculture reveal large discrepancies between various EC member states, both with respect to their absolute levels and in relation to non-farm productivity and income in the respective countries. Insofar as they appear to reflect the failure of markets in allocating agricultural resources efficiently, and seem to be inconsistent with conventional wisdom concerning structural adjustment of agriculture, however, it can be seen that those data are misleading to a large extent. Based on a simple model of optimal time allocation between farm and non-farm activities of members of farm households, it is demonstrated that farm labour productivity and income must be different according to differences in the relation of farm to non-farm labour supply. The implications concerning international, interregional, intersectoral and intertemporal comparisons of income and productivity are discussed as well as the relevance of market failure in agriculture.     

Does Conservation Agriculture Change Labour Requirements? Evidence of Sustainable Intensification in Sub-Saharan Africa

Population growth, increasing wealth and changing diets require agriculture in Sub-Saharan Africa to intensify to meet future food demand and ensure food security in the region. Conservation agriculture can increase yields in the long run and reduce the negative environmental impacts of intensive farming. In changing the mix of resources used and how they are managed, the adoption of conservation agriculture can have a direct impact on farm labour. We study the relationship between conservation agriculture and labour input requirements as observed in five Sub-Saharan African countries. We focus on the amount of work required and the source of the work employed (household or hired, by gender, by children and by production stage). We apply multinomial endogenous switching regression models on a panel of household and farm data from Ethiopia, Kenya, Malawi, Mozambique and Tanzania. We find that conservation agriculture increases farms’ labour input requirements. Higher demand is driven by more work during the harvesting and threshing stages. Increases in labour requirements are usually met by household labour, not paid work. The workload change is also higher for women than for men, and, in certain cases, is met by children.     

Gender and conservation agriculture in East and Southern Africa: towards a research agenda

It is remarkable that despite wide-ranging, in-depth studies over many years, almost no conservation agriculture (CA) studies consider gender and gender relations as a potential explanatory factor for (low) adoption rates. This is important because CA demands new ways of working with the farm system. Implementation will inevitably involve a reallocation of men's and women's resources as well as having an impact upon their ability to realize their gender interests. With respect to intra-household decision-making and the distribution of benefits, CA interventions have implications for labour requirements and labour allocation, investment decisions with respect to mechanization and herbicide use, crop choice, and residue management. CA practice may impact upon the ability of households to source a wide variety of crops, wild plants, and insects and small animals for household nutrition. Gender biases in extension service design can sideline women. This paper examines the limited research to date on the interactions between CA interventions and gender in East and Southern Africa, and, based on the gaps observed, sets out a research agenda. It argues that attention to gender in CA is particularly timely given the increasing interest in CA as a means of adapting to climate change.     

Understanding the determinants of investment reactions to decoupling of the Common Agricultural Policy

The objective of this paper is to identify the determinants of the reactions of farm households to the decoupling of the Common Agricultural Policy (CAP) focusing, in particular, on changes in on-farm investment behaviour. The paper analyses a sample of 248 farm-households in 8 EU countries, using a non-parametric approach based on classification tree algorithms. The factors emerging as determinants of an increase in on-farm investment as a reaction to decoupling are: specialisation, existence of a successor, the farmer's age, labour management, SFP per hectare, location and expectations. When used, country variables, tend to substitute some of the factors listed above and become the main predictors, followed by labour endowment, specialisation and expectations. While the study confirms the relevance of the main determinants available from the literature, it also emphasises the articulation (non-linearities) of the effects of farm head age, labour management and SFP per hectare on the reactions to decoupling. This hints at the need for further research on the way such factors combine in determining farm-household reactions to a changing market and policy context, and support the usefulness of non-parametric statistics tools for such types of analysis.     

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.     

Labour on the Family Farm: a Theory under Uncertainty

This paper develops a theory of the family farm in conditions of uncertainty where attention is focussed on the labour-input decisions. Specifically, the farm family is faced with two labour decisions, namely with respect to hired labour and to family labour. The framework for analysis is expected utility maximisation. The analysis has implications for agricultural policy since policy pronouncements of economists are typically based on models which assume perfect certainty. These pronouncements do not survive the incorporation of uncertainty.     

EFFECTS ON FARM INCOMES AND RURAL LABOUR OF A RELATIVE INCREASE IN WAGES*

We use the concept of the elasticity of farm incomes with respect to changes in input prices to analyse the effects of a large increase in relative wages on selected measures of farm incomes. In order to estimate the elasticity of farm incomes we have to estimate elasticities and cross-elasticities of demand and supply for farm labour and capital. The estimates of elasticity of demand for operator and hired labour allow us to calculate the impact of a rise in wages on numbers of farmers and hired labour employed in agriculture.     

Farmer responses to changing risk aversion,enterprise variability and resource endowments

The focus of this article is on assessing how risk aversion, enterprise variability and resource endowments affect farm land‐use decisions and economic returns. A theoretical model of a two‐enterprise, two‐constraint farm is developed, and then, an empirical illustration for an Australian farm is provided. The methodology used builds on previous expected mean‐variance (EV) models by incorporating land and budget constraints. The Kuhn–Tucker conditions of the EV model are examined to highlight that changes in resource endowments have larger effects on economic returns, than do changes in risk aversion or enterprise gross margin variability. It was also found that combinations of enterprise mixes that do not use all available resources can produce higher economic returns, relative to some enterprise mixes that use all available resources.     

LABOUR USE AND LABOUR REQUIREMENTS IN UK AGRICULTURE

Estimates of labour input coefficients for individual agricultural enterprises have many uses for policy-makers, agricultural administrators, farm mangement advisers and academics alike, though they have attracted relatively little attention in the UK in recent years. This article describes a new method for estimating labour input coefficients which enables the estimates to be updated quickly and cheaply using information already available from the annual June Census. Some possible uses of the resulting coefficients including the evaluation of prospective changes in agricultural policy are described.     

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.     

Agriculture: a case study in industrial relations reform

Organised Australian labour first demonstrated its power in the shearing industry just over 100 years ago. The system of arbitration developed over the last century continues to have a profound impact on agriculture. This article profiles the Australian rural labour market and identifies some continuing regulatory impediments to the proper functioning of the rural labour market. A brief review of the links between agriculture and other industries in Australia concludes that the greatest improvement in farm profitability from a better functioning labour market is to be had from productivity increases in industries outside the farm gate.     

Off-farm work decisions on Dutch cash crop farms and the 1992 and Agenda 2000 CAP reforms

A double hurdle model of off‐farm work participation and off‐farm labour income was derived and estimated consistent with a farm household model. It was found that rationing and unexpected transaction costs inhibit farm households from participating in off‐farm work. The 1992 and the Agenda 2000 CAP reforms are most likely to increase the off‐farm employment of arable farm households, but its full effect cannot be realised because of inhibitions to enter off‐farm activities. Household and farm characteristics have different impacts on off‐farm work participation and on the level of off‐farm labour income.     

How Do Health and Social Insurance Programmes Affect the Land and Labour Allocations of Farm Households? Evidence from Taiwan

To protect farmers from health care costs and risks to livelihood, most countries have developed special health and social insurance programmes specifically for farmers. While numerous studies have examined the determinants of participation in these programmes, little is known about how they influence famers' land and labour allocations. Without government‐sponsored health and social insurance, farmers may seek off‐farm employment in order to obtain similar benefits. Conditioning eligibility for social insurance on minimum land holdings and on‐farm work days can lead to delayed retirement and other forms of job lock. We investigate these issues using a unique dataset of 703,287 farms in Taiwan. After controlling for non‐random participation in Taiwan's social insurance programme, we find that the programme increases (decreases) on (off) farm labour supply, and decreases the amount of set‐aside land. This suggests that payments from social insurance substitute for those issued through land set‐aside programmes to some extent, and that failing to account for this substitution increases the cost of achieving both programmes' objectives.     

LABOUR SUPPLY AND OFF-FARM WORK BY FARMERS: THEORY AND ESTIMATION

Off-farm employment has become increasingly important as an aspect of resource adjustment and a source of income in Australian agriculture. However, it is surprising that there is a paucity of work on this topic reported in the agricultural economics literature. Therefore, we have drawn upon recent developments in labour economics in order to investigate off-farm employment in Australia. A conceptual model of the allocation of a farmer's labour between farm and off-farm work is developed and applied to cross-sectional data from the Australian Agricultural and Grazing Industries Survey. A Tobit maximum likelihood procedure is utilised to test the influences of the life cycle, level of human capital, wealth, non-wage income and farm income on the off-farm labour supply of farmers.     

Market Analysis,Technical Change and Income Distribution in Semi-Subsistence Agriculture: the Case of Bangladesh

For the first time, the model developed by Hayami and Herdt is applied to determine gains from modern varieties of rice in Bangladesh and the distribution of these gains between consumers and producers. The results suggest that consumers' surplus is much greater than it would have been had the high yielding crop varieties (HYVs) not been introduced. By keeping the real price lower than it would have been otherwise, the modern varieties have tended to be income equalizing for urban consumers. The Hayami-Herdt partial model even suggests that, given the relatively inelastic demand for rice in Bangladesh, the real cash income of producers has risen slightly as a result of these new technologies. In reality, however, the impact of these changes on incomes of farmers and the distribution of income between those involved in production is more complex. It is suggested that if a less partial view is taken and if account is taken of lower cost of obtaining home-consumed produce, the increase in income may be greater. In any event, there are dangers in using such a partial model to predict the developmental consequences of technological changes affecting a staple crop, and attention needs also to be given to the possibility that the supply curve may not have the simple form and pivot in the way supposed by Hayami and Herdt. While the Hayami-Herdt model is simple to apply, it is best used as a first approximation or starting point rather than a final solution. It ignores a number of criteria that could be important in assessing new agricultural technologies, such as their impact on the variability of benefits to producers and consumers and their consequences for sustainability of production. Furthermore, the Hayami-Herdt model does not deal specifically with changes in factor shares in farm production. Nor does it consider the impact on income distribution of the ownership and control of critical input like irrigation and imperfection in the rural credit market. It is pointed out in our paper that the adoption of HYVs has been associated with important variations in factor shares in Bangladeshi rice production. Analysis of available farm level data indicates that the relative share of labour has fallen, suggesting an uneven distribution of gains from technological changes between the owners of non-labour resources and those of labour resources. However, the absolute share of labour has increased, and it seems that rural employment has risen as result of the new technologies.     

Understanding the variation in estimates of off-farm labour supply elasticities: A meta-analysis

The design of rural development policies and government programmes in support of farm operations and farm households relies on precise estimates of off-farm labour supply elasticities. However, the wide variation in estimates dilutes their power to predict the magnitude of these targeted interventions. We perform a meta-analysis of estimates of off-farm labour supply elasticity to identify systematic factors that influence these estimates. A sample of 137 elasticities is obtained from 43 studies which use data ranging from 1960 to 2012. We examine theoretical assumptions, data availability and empirical specifications, and other study-specific characteristics. Controlling for potential publication bias, we estimate that the elasticity is approximately 0.64 to 0.77. Results of the analysis show that estimates are affected by modelling choices controlling for self-selection and life-cycle elements. However, we found no compelling evidence that study-specific characteristics of off-farm labour supply functions, including various measurements of labour supply, explain variation in the elasticities.     

MEASURING THE RELATIVE INCOME OF FARM LABOUR, 1941–611

This is an analysis of farm labour income at an aggregate level for the period 1941 to 1961. The income of farm labour was estimated for paid workers, operators or self-employed workers, and total paid and unpaid workers, These incomes were compared with five sub-sectors of the nonfarm economy and for five geographical regions. In estimating income, adjustments were made for the age and sex composition of labour force, bours of work in various industries, movement of prices of inputs and output, and period of employment of farm workers. The results show significant differences in incomes of various categories of workers, and incomes of farm workers compared to various sub-sectors of the nonfarm economy. Similarly, various regions were found to. be highly heterogeneous with respect to relative labour income levels. When the farm and nonfarm sectors were adjusted for differences in characteristics, the labour income ratio of Canadian agriculture on a normalized man equivalent basis ranged between 41 and 63 percent.     

Innovation in Labour Organisation and Social Conditionality: Implications for Farm Advisory Services

There is growing concern about the evolution of working conditions for employees on European farms. In the new Common Agriculture Policy (CAP), financial support to farmers will soon be subject to a social conditionality clause. As a result of this change in CAP regulations, in this paper we ask if the need for specific advice can already be foreseen? Examining recent investigations that focused on new forms of labour organisations on farms can help to answer this question. Investigations were conducted across France, combining qualitative field studies with a comprehensive analysis of statistical and administrative data. The results show a growing complexity of farm labour organisation that generates needs for new types of advice. In particular, an increasing proportion of the people working on farms are employed by another organisation (foreign and domestic service providers, employers’ alliances, etc.). The administrative data provides strong evidence of the scale of this trend which has little visibility in the agricultural census data. We should therefore be cautious about oversimplified representations of labour patterns at farm level. They can distort policy design, implementation and assessment by overlooking a part of the worker population and needs for new types of advice, including those that will be required to meet social conditionality requirements.