Agricultural Policy Reform and Off‐farm Labour Decisions

Abstract

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. Copyright 2005 Blackwell Publishing Ltd.

Off-Farm Employment and Economic Crisis: Evidence from Cyprus

“…Having more family members increases the need for additional income that is expected to be positively related to off-farm activities [10,16]. Additionally, a larger household can more easily divide on-farm work than a smaller one, thus releasing some of the family members to work off-farm [3].…”

“…Larger farms, as measured in any way, typically require more labour on the farm, thus resulting in fewer hours available for off-farm work [1,10,17]. The type of farming operation, i.e., crop farming, animal farming, and mixed farming, affect the engagement of farm operators in off-farm employment; labour-intensive farming, e.g., livestock operations, requires a constant presence of the operator on the farm, compared with less-intensive types of farming, e.g., field and permanent cropping [1,17].…”

“…Off-farm diversification was later discussed in periods of agricultural policy reforms, e.g., the decoupling of subsidies from production [10,11]. However, the study of off-farm employment during economic downturn periods is limited.…”

What may determine off-farm income? A review

“…According to Jelínek et al (2010), Zhao and Barry (2014), the off-farm revenues (and, consequently, the off-farm income) are significant as a crucial element of the safety net. Serra et al (2005) showed that the introduction of fixed decoupled payments in 1996 may have contributed to reducing the likelihood of the non-farm economic activity. The negative impact of decoupled payments on labour in the non-farm sector suggests that a growth in payments supporting the farm income can reduce the sources diversification of the farm income, while increasing the dependency on the production carried out on the farm or mainly on the subsidies.…”

Regional diversity of peasant household response to new countryside construction based on field survey in eastern coastal China

“…Household behavior response to government's policy has been a research hotspot in international rural studies, ranging from behavior response and its measures (Wegren, 2004), regional divergence (Gorton et al, 2008), behavior decisions (Serra et al, 2005), to its theoretical review (Scoones, 2009). It is generally believed that household behavior decision follows the order of need-motivation-behavior-objectives.…”