Welfare implications of reduced government subsidies to farm families: accounting for fringe benefits

In the past three decades, farm families have relied on government payments and off‐farm income to reduce income risk and increase total household income. Studies have shown that, as the income effect dominates, government payments tend to reduce off‐farm labor of farm operators and spouses. But that may not be true if one accounts for fringe benefits associated with off‐farm employment. Additionally, with looming budget deficits and the possibility of a reduction in decoupled government payments, farm families may be facing an altered economic environment. Our study addresses this issue by examining the links between government farm program payments and the ever‐important role of fringe benefits in the off‐farm employment of farm couples. Results from farm‐level data actually show that the marginal effect of government payments on hours worked off‐farm will decrease in magnitude when accounting for fringe benefits, ceteris paribus. These results support the notion that farm households’ welfare loss stemming from reduced decoupled payments may be overstated when models exclude fringe benefits from the estimation of off‐farm labor supply.     

The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators

With the 1996 Farm Act, the United States introduced payments that were designed to be "decoupled." Labor allocation choices are likely to be affected by receipt of payments, and income from off-farm jobs has been the major source of income for most farm households for sometime. This article examines whether the 1996 change has affected the off-farm labor participation of farm households. We conclude that the observed increase in off-farm participation of farm operators who received payments was not the result of the 1996 policy change. Government payments, whether coupled or decoupled, have a negative effect on off-farm labor participation.     

The effect of nonfarm income on investment in Bulgarian family farming

This article documents a relationship between nonfarm income (primarily earnings and pensions) and agricultural investment in Bulgaria, specifically, expenditures on working capital (variable inputs such as feed, seed, and herbicides) and investment in livestock. Among those with positive spending on farm inputs, the estimated elasticity of these expenditures with respect to nonfarm income is 0.14. Nonfarm income also has an effect on the number of households that purchase farm animals, with an estimated elasticity of 0.35. The use of nonfarm income for farm investment is consistent with the presence of credit constraints, as is the fact that less than one percent of farmers report outstanding debts for agricultural purposes. Yet many farm households take out large unsecured loans for other purposes, primarily to cover consumption expenditures, implying that credit is available, but that farmers prefer not to use borrowed funds to finance agricultural investment. This would suggest that increases in the availability of agricultural credit may have little effect on farm outcomes, whereas increases in nondebt-financed sources of liquidity, such as subsidies or transfers, may better stimulate investment.     

农牧交错带农户退耕还草意愿分析

该文基于农牧交错带存在的经济生态问题及农牧结合的特征,在政府对"退耕还草"的农户给予补贴的最短期限即将届满的情况下,应用博弈分析和实证分析的方法,分析了如果因国家减少退耕补贴,农户退耕收入少于种植农作物的收入时,农户基于自己的利益与生存需求是否愿意继续退耕的迫切问题。结果表明当国家降低补贴标准,农户退耕收入少于种植农作物的收入时,农户不愿意在原退耕的基础上再退耕。     

Determinants of economic well-being among U.S. farm operator households

Participation in government programs has a mild impact on the economic well‐being of U.S. farm households. Major factors that determine farm household prosperity are the primary operator's education level and ethnicity, education level of the spouse, and other characteristics such as forward purchasing of inputs, use of contract shipping of products, having a succession plan, farm ownership, and location in a metro area. This article uses the 2001 Agricultural Resource Management Survey (ARMS) as well as relative and an absolute measure to assess U.S. farm households' economic well‐being. The relative measure compares the income and wealth position of farm households relative to median income and median wealth of the general population. The absolute measure adds annualized wealth to a farm household's income.     

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.     

Off‐farm Employment and Input Intensification among Smallholder Maize Farmers in Kenya

We derive input demand functions for fertiliser and hybrid seed, testing for the combined and separate effects of income from non‐farm sources and agricultural wage labour among smallholder maize farmers in Kenya. More income from off‐farm sources, and specifically non‐farm sources, competes with maize intensification, particularly in more productive areas where use rates are higher. In less productive areas, where households rely more on off‐farm income and input use in maize is extremely low, agricultural wage labour reduces the likelihood that fertiliser is applied, but when used, has a positive effect on quantities purchased of both seed and fertiliser.     

The role of nonfarm income in coping with the effects of drought in southern Mozambique

To reduce their dependence on subsistence agriculture, farm households in rural Africa may diversify their income sources by participating in the nonfarm sector. In years of drought, nonfarm income can also be part of the coping strategies. A multivariate sample selection model was used to analyze three years of data from a nationally representative household survey in Mozambique. The analysis was guided by the following three questions. During a drought year: (1) Do households increase their participation in nonfarm activities? (2) Are poorer households as likely as others to participate in and benefit from nonfarm activities? and (3) Which factors are associated with higher nonfarm incomes? The results suggest that households are more likely to engage in at least one nonfarm income‐generating activity during a drought year. Although poorer households are more likely to engage in nonfarm activities, they are less likely to participate in nonfarm activities of high return. The results suggest that policies reducing entry barriers (e.g., improved road infrastructure, micro‐credit schemes, and livestock promotion programs) and increasing education levels can facilitate income diversification, thus allowing rural households to better cope with the effects of drought. When designing polices, care must be taken to avoid exacerbating income inequality by targeting measures toward poorer and female‐headed households.     

Rural–Urban Impacts of CAP Measures in Greece: An Inter‐regional SAM Approach

This paper evaluates the inter‐regional impacts of CAP measures implemented in the rural town of Archanes (Crete, Greece), an area which received considerable EU Agricultural Guarantee and rural development funds during the 1990s. A hybrid, three‐area Social Accounting Matrix (SAM) with three groups of households defined by income level is constructed to describe inter‐linkages between three rural–urban localities, namely the rural area of Archanes, the less‐developed, agriculturally dependent, neighbouring rural area of N. Kazantzakis, and the adjacent urban centre of Heraklion. Results are reported on the diffusion patterns of economic impacts generated by three types of CAP measure: farm income support; aids to increased agricultural productivity; aids to economic diversification. These show that the diffusion of policy‐induced economic impacts from Archanes is lower than might be expected for a small open local economy, and that benefits leak primarily to Heraklion and marginally to rural N. Kazantzakis. Finally, generated income benefits seem to accrue mostly in favour of high‐income households, especially in the case of Guarantee subsidies.     

China’s Agricultural Policy Transition: Impacts of Recent Reforms and Future Scenarios

This article reviews recent developments in China’s agricultural domestic support policy, especially the transition from taxing farmers and agriculture to providing direct subsidies to grain production and purchased inputs. A model‐based quantitative analysis on the effects of these policy changes is presented. Simulation results suggest that recent policy changes have achieved the declared policy goals of increasing grain production and boosting farm income. Much of the increase in grain production and farm income can be attributed to higher per unit return to arable land, land reallocation to grain production and extra agricultural employment triggered by the policy changes. Based on the assumption that China’s public assistance to agriculture and farmers will continue and rise, two hypothetical future scenarios are simulated. Using all the support permitted under WTO de minimis limits with existing instruments, China’s policy will increase grain production, change trade patterns seemingly contrary to China’s comparative advantage, increase rural employment and significantly increase farm income (by more than 12%). If, however, decoupled instruments are applied to raise China’s agricultural domestic support to the same level, China’s agricultural production and trade will remain unchanged, rural employment remain stable, but farm income will be increased by nearly 15%.     

贫困地区农户对自然灾害风险规避和响应分析

[目的]研究影响贫困地区农户应对自然灾害风险,减少经济损失的因素,并分析农户采取应对损失的措施。[方法]利用2015年云南、贵州和陕西3省6县经历过自然灾害的819农户作为研究对象。采用Logit模型研究影响贫困地区农户有效规避自然灾害风险的因素,并进一步分析农户在遭受自然灾害后采取的响应策略。[结果]研究表明农户户主的受教育程度越高、与外界市场接触越紧密,则农户规避自然灾害风险能力越强;农户收入中农业收入比重高、家庭贫穷、家庭收入来源过于集中均不利于农户规避自然灾害风险。通过分析农户应对自然灾害损失的策略发现,农户在自然灾害冲击下,较多采用被动的应对策略,不善于拓展新的收入来源。采用降低生活质量、减少生活必要支出、寻找新的收入来源、金融手段和出售生产生活资料这5种应对策略的农户分别占整体受灾农户的16.36%、6.47%、14.65%、5.37%、4.03%和11.35%。[结论]为了增强贫困地区农户规避自然灾害风险的能力,首先需要加大对贫困地区的教育投资;其次,增加贫困地区与外界沟通交流的渠道,可以在偏远地区多修公路等;最后,应当积极引导农户拓展农业生产以外的收入来源,将收入来源多样化,降低农户农业收入在家庭收入中的比重,有效增强贫困地区农户应对自然灾害风险的能力。     

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.     

The Capitalisation of CAP Payments into Land Rental Prices: A Panel Sample Selection Approach

The empirical literature suggests that farmland prices and rents capitalise agricultural subsidies and that the 2003 reform of the EU Common Agricultural Policy, which decoupled subsidies from production and attached them to land, may have increased the extent of the phenomenon. Employing a farm‐level dataset, the Farm Accountancy Data Network (FADN) for Italy, we investigate this issue while accounting for selectivity, endogeneity and unobserved individual heterogeneity. To understand the impact of the reform we compare the estimates of capitalisation rate for decoupled payments with those for coupled payments. After correcting for unobserved individual heterogeneity and selectivity, our results reveal no capitalisation of coupled payments and only limited capitalisation of decoupled area payments into farmland rents in Italy.     

Did the Key Priority Forestry Programs affect income inequality in rural China?

The Natural Forest Protection Program, the Sloping Land Conversion Program and the Desertification Combating Program around Beijing and Tianjing have been gradually launched since 1998 for ecosystem restoration. A large number of rural households have been enrolled in these programs, and the Government of China has designed different polices for these programs, such as subsidies and forbidden or restricted uses. How and how much these programs and policies have affected rural households’ inequality are urgent questions to be answered. The paper used a unique panel data of 1458 sample rural households from 15 counties in China to examine the direct and overall contributions of the Key Priority Forestry Programs (KPFPs) to rural households’ total income inequality. A fixed-effects model was used to estimate the impact of the KPFPs on land-based income and off-farm income. Our empirical results indicate that the direct contribution and overall (including direct and indirect) contribution have experienced a inverted U-shape. Specifically, the overall contributions of the KPFPs’ subsidies to income inequality were less pronounced than that of the direct effects. Furthermore, both the direct contributions and overall contributions to total income inequality changed over time during the study period and differed from one county to another.     

我国谷子种植户持续种植意愿的影响因素研究

文章通过对3个省(自治区)、5个市,268户谷子种植户的问卷调查,采用logit模型,使用逐步回归分析的方法,对影响谷子种植户持续种植谷子意愿的因素进行了分析。从户主个人基本情况、农户家庭情况、农户农业生产情况、谷子生产情况等4个方面共选择13项调查内容作为解释变量,以第2年是否持续种植谷子作为被解释变量,逐步回归分析结果表明:种植户种植业收入占家庭总收入的比重、种植户家庭耕地面积、谷子种植补贴通过了显著性检验。种植业收入占家庭总收入的比重与谷子持续种植呈显著负相关,比重越高持续种植意愿越低。谷子产量受自然因素影响大,农户从减小风险的角度出发,收入对种植业越依赖谷子的种植意愿越弱。家庭耕地面积与谷子持续种植呈显著正相关,家庭耕地面积越大,谷子被选择种植的机会也就越大,规模效应越明显,持续种植意愿越强。补贴对持续种植意愿呈显著正相关关系,种植补贴意味着更多的收益,积极性就越高。依据分析结果提出了要进一步提升对种植谷子的重视,加大科研投入力度,做好科技成果的转化与推广工作;要加大谷子种植补贴的力度、范围及内容,在良种、农膜、资金等方面对种植户给予支持与补贴,调动农户谷子种植的积极性;推进土地流转,在农户种植规模扩大过程中提高土地规模效益的政策建议。     

Consumption inequality between farm and nonfarm households in Taiwan: a decomposition analysis of differences in distribution

Consumption has been recognized as a more reliable indicator of household well‐being than income. Although a considerable body of literature has examined income inequality between farm and nonfarm households, little is known about inequality in consumption. This research aims to fill this knowledge gap by investigating consumption disparity between farm and nonfarm households. Using a nationally representative household survey from Taiwan, we apply an unconditional quantile regression‐based decomposition method to decompose the differences in the distribution of household expenditure between these farm and nonfarm households. The results indicate that differences in the observed characteristics between these two types of households explain most of the consumption inequality. Moreover, the difference in the education level of the farm operator, household income, and the degree of urbanization are particularly important.     

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.     

Does participation in the conservation reserve program impact the economic well‐being of farm households?

This study uses U.S. farm household survey data to examine how participation in the Conservation Reserve Program (CRP) affects farm household economic well-being. Further, the study also examines the effects of CRP participation on farm household consumption, income, and imputed savings. In contrast to previous studies that assume the relationships are homogenous across the population, quantile regression is used to investigate the association between CRP participation across the entire distribution of farm household consumption and income. Empirical findings suggest that the effect of CRP participation on household economic well-being differs across the income and consumption distribution. For households in the lower percentiles of the distribution, the CRP participation is associated with an increase in household consumption, but a decrease in farm household income and savings. In contrast, farm households at the median and higher income and consumption quantiles, participation in CRP is associated with lower levels of household consumption and income, but with higher levels of savings.