Farm rental income.

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Farm bookkeeping and the federal income tax /

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Agricultural biodiversity, farm level technical efficiency and conservation benefits : an empirical investigation

The issues involved in agricultural biodiversity are important and interesting areas for the application of economic theory. However, very little theoretical and empirical work has been undertaken to understand the benefits of conserving agricultural biodiversity. Accordingly, the main objectives of this PhD thesis are to: (1) Investigate farmers’ valuation of agricultural biodiversity; (2) Identify factors influencing farmers’ demand for agricultural biodiversity; (3) Examine farmers’ demand for biodiversity rich farming systems; (4) Investigate the relationship between agricultural biodiversity and farm level technical efficiency. This PhD thesis investigates these issues by using primary data in small-scale farms, along with secondary data from Sri Lanka. The overall findings of the thesis can be summarized as follows. Firstly, owing to educational and poverty issues of those being interviewed, some policy makers in developed countries question whether non-market valuation techniques such as Choice Experiment (CE) can be applied to developing countries such as Sri Lanka. The CE study in this thesis indicates that carefully designed and pre-tested nonmarket valuation techniques can be applied in developing countries with a high level of reliability. The CE findings support the priori assumption that small-scale farms and their multiple attributes contribute positively and significantly to the utility of farm families in Sri Lanka. Farmers have strong positive attitudes towards increasing agricultural biodiversity in rural areas. This suggests that these attitudes can be the basis on which appropriate policies can be introduced to improve agricultural biodiversity. Secondly, the thesis identifies the factors which influence farmers’ demand for agricultural biodiversity and farmers’ demands on biodiversity rich farming systems. As such they provide important tools for the implementation of policies designed to avoid the loss agricultural biodiversity which is shown to be a major impediment to agricultural growth and sustainable development in a number of developing countries. The results illustrate that certain key household, market and other characteristics (such as agricultural subsidies, percentage of investment of owned money and farm size) are the major determinants of demand for agricultural biodiversity on small-scale farms. The significant household characteristics that determine crop and livestock diversity include household member participation on the farm, off-farm income, shared labour, market price fluctuations and household wealth. Furthermore, it is shown that all the included market characteristics as well as agricultural subsidies are also important determinants of agricultural biodiversity. Thirdly, it is found that when the efficiency of agricultural production is measured in practice, the role of agricultural biodiversity has rarely been investigated in the literature. The results in the final section of the thesis show that crop diversity, livestock diversity and mix farming system are positively related to farm level technical efficiency. In addition to these variables education level, number of separate plots, agricultural extension service, credit access, membership of farm organization and land ownerships are significant and direct policy relevant variables in the inefficiency model. The results of the study therefore have important policy implications for conserving agricultural biodiversity in Sri Lanka.

Rural Income Generation and Diversification : A Case Study in Eastern Zambia

Rural income diversification has been found to be rather the norm than the exception in developing countries. Smallholder households tend to diversify their income sources because of the need to manage risks, secure a smooth flow of income, allocate surplus labour, respond to various kinds of market failures, and apply coping strategies. The Agricultural Household Model provides a theoretical rationale for income diversification in that rural households aim at maximising their utility. There are several elements involved, such as agricultural production for their own consumption and markets, leisure activities and income from non-farm sources. The aim of the present study is to enhance understanding of the processes of rural income generation and diversification in eastern Zambia. Specifically, it explores the relationship between household characteristics, asset endowments and income-generation patterns. According to the sustainable- rural-livelihoods framework, the assets a household possesses shape its capacity to seize new economic opportunities. The study is based on two surveys conducted among rural smallholder households in four districts of Eastern Province in Zambia in 1985/86 and 2003. Sixty-seven of the interviewed households were present in both surveys and this panel allows comparison between the two points of time. The initial descriptive analysis is complemented with an econometric analysis of the relationships between household assets and income sources. The results show that, on average, 30 per cent of the households income originated from sources outside their own agriculture. There was a slight increase in the proportion of non-farm income from 1985/86 to 2003, but total income clearly declined mainly on account of diminishing crop income. The land area the household was able to cultivate, which is often dependent on the available labour, was the most significant factor affecting both the household-income level and the diversification patterns. Diversification was, in most cases, a coping strategy rather than a voluntary choice. Measured as income/capita/day, all households were below the poverty line in 2003. The agricultural reforms in Zambia, combined with other trends such as changes in rainfall pattern, the worsening livestock situation and the incidence of human disease, had a negative impact on agricultural productivity and income between 1985/86 and 2003. Sources of non-farm income were closely linked to agriculture either upstream or downstream and the income they generated was not enough to compensate for the decline of agricultural income. Household assets and characteristics had a smaller impact on diversification patterns than expected, which could reflect the lack of opportunities in the remote rural environment.

Determinants of farmer retirement and farm succession in Finland

In the past decade, the Finnish agricultural sector has undergone rapid structural changes. The number of farms has decreased and the average farm size has increased when the number of farms transferred to new entrants has decreased. Part of the structural change in agriculture is manifested in early retirement programmes. In studying farmers exit behaviour in different countries, institutional differences, incentive programmes and constraints are found to matter. In Finland, farmers early retirement programmes were first introduced in 1974 and, during the last ten years, they have been carried out within the European Union framework for these programmes. The early retirement benefits are farmer specific and de-pend on the level of pension insurance the farmer has paid over his active farming years. In order to predict the future development of the agricultural sector, farmers have been frequently asked about their future plans and their plans for succession. However, the plans the farmers made for succession have been found to be time inconsistent. This study estimates the value of farmers stated succession plans in predicting revealed succession decisions. A stated succession plan exists when a farmer answers in a survey questionnaire that the farm is going to be transferred to a new entrant within a five-year period. The succession is revealed when the farm is transferred to a suc-cessor. Stated and revealed behaviour was estimated as a recursive Binomial Probit Model, which accounts for the censoring of the decision variables and controls for a potential correlation between the two equations. The results suggest that the succession plans, as stated by elderly farmers in the questionnaires, do not provide information that is significant and valuable in predicting true, com-pleted successions. Therefore, farmer exit should be analysed based on observed behaviour rather than on stated plans and intentions. As farm retirement plays a crucial role in determining the characteristics of structural change in agriculture, it is important to establish the factors which determine an exit from farming among eld-erly farmers and how off-farm income and income losses affect their exit choices. In this study, the observed choice of pension scheme by elderly farmers was analysed by a bivariate probit model. Despite some variations in significance and the effects of each factor, the ages of the farmer and spouse, the age and number of potential successors, farm size, income loss when retiring and the location of the farm together with the production line were found to be the most important determi-nants of early retirement and the transfer or closure of farms. Recently, the labour status of the spouse has been found to contribute significantly to individual retirement decisions. In this study, the effect of spousal retirement and economic incentives related to the timing of a farming couple s early retirement decision were analysed with a duration model. The results suggest that an expected pension in particular advances farm transfers. It was found that on farms operated by a couple, both early retirement and farm succession took place more often than on farms operated by a single person. However, the existence of a spouse delayed the timing of early retirement. Farming couples were found to co-ordinate their early retirement decisions when they both exit through agricultural retirement programmes, but such a co-ordination did not exist when one of the spouses retired under other pension schemes. Besides changes in the agricultural structure, the share and amount of off-farm income of a farm family s total income has also increased. In the study, the effect of off-farm income on farmers retirement decisions, in addition to other financial factors, was analysed. The unknown parameters were first estimated by a switching-type multivariate probit model and then by the simulated maxi-mum likelihood (SML) method, controlling for farmer specific fixed effects and serial correlation of the errors. The results suggest that elderly farmers off-farm income is a significant determinant in a farmer s choice to exit and close down the farm. However, off-farm income only has a short term effect on structural changes in agriculture since it does not significantly contribute to the timing of farm successions.

The effects of aquaculture on farm household economy: a case study in Omon District, Cantho Province, Vietnam

A study of the farming systems in the Mekong River Delta (Vietnam) indicate that fish culture brings to the household a higher level of net farm income and family labor use. In general, adoption of fish culture is strongly affected by: (1) decline of wildfish; (2) location of the farm; (3) farm size per person and available water bodies within the farm; (4) income of farm, excluding income from fish; (5) guidance from agricultural extension workers; (6) policies of local government on the development of agriculture including aquaculture.

Farm Poverty in Kerala: A case study of Alappuzha, Trissur, Palakkad and Wayanad

The present study was an attempt to analytically approach the problem of farm poverty in Kerala from an entirely different angle by incorporating an independently developed and reformulated definition of poverty line in terms of physical units of operational holdings (say, acre). The entire discussion on farm poverty emerged out of proper co-ordination of two important factors popularly considered as the distinct features of Ifarm productivity. This brief analytical study on farm poverty, conducted in the light of inter regional variations in farm productivity tried to highlight various grave issues deserving thorough introspection.

Evaluation of the agricultural vocational training programmes conducted by the Krishi Vigyan Kendras (Farm Science Centres) in Indian Punjab

Krishin Vigyan Kendras-KVKs (Farm Science Centres) have been established by the Indian Council of Agricultural Research in 569 districts. The trust areas of KVKs are refinement and demonstration of technologies, and training of farmers and extension functionaries. Imparting vocational trainings in agriculture and allied fields for the rural youth is one of its mandates. The study was undertaken to do a formative and summative (outcome and impact) evaluation of the beekeeping and mushroom growing vocational training programmes in the Indian state of Punjab. One-group pre and post evaluation design was employed for conducting a formative and outcome evaluation. The knowledge tests were administered to 35 beekeeping and 25 mushroom cultivation trainees, before and after the training programmes organized in 2004. The trainees significantly gained in knowledge. A separate sample of 640 trainees, trained prior to 2004, was selected for finding the adoption status. Out of 640, a sample of 200 was selected by proportionate sampling technique out of three categories, namely: non-adopters, discontinued-adopters and continued-adopters for evaluating the long-term impact of these training programmes. Ex-post-facto one-shot case study design was applied for this impact analysis. The vocational training programmes have resulted in continued-adoption of beekeeping and mushroom cultivation enterprises by 20% and 51% trained farmers, respectively. Age and trainee occupation had significant influence on the adoption decision of beekeeping vocation, whereas education and family income significantly affected the adoption decision of mushroom cultivation. The continued adopters of beekeeping and mushroom growing had increased their family income by 49% and 24%, respectively. These training programmes are augmenting the dwindling farm income of the farmers in Indian Punjab.

Poverty targeting and income impact of subsidised credit on accessed households in the Northern Mountainous Region of Vietnam

This paper uses the data of 1338 rural households in the Northern Mountainous Region of Vietnam to examine the extent to which subsidised credit targets the poor and its impacts. Principal Component Analysis and Propensity Score Matching were used to evaluate the depth of outreach and the income impact of credit. To address the problem of model uncertainty, the approach of Bayesian Model Average applied to the probit model was used. Results showed that subsidised credit successfully targeted the poor households with 24.10% and 69.20% of clients falling into the poorest group and the three bottom groups respectively. Moreover, those who received subsidised credit make up 83% of ethnic minority households. These results indicate that governmental subsidies are necessary to reach the poor and low income households, who need capital but are normally bypassed by commercial banks. Analyses also showed that ethnicity and age of household heads, number of helpers, savings, as well as how affected households are by shocks were all factors that further explained the probability at which subsidised credit has been assessed. Furthermore, recipients obtained a 2.61% higher total income and a 5.93% higher farm income compared to non-recipients. However, these small magnitudes of effects are statistically insignificant at a 5% level. Although the subsidised credit is insufficient to significantly improve the income of the poor households, it possibly prevents these households of becoming even poorer.

Farming systems methodology for efficient resource management at the farm level: a review from an Indian perspective

Farming systems research is a multi-disciplinary holistic approach to solve the problems of small farms. Small and marginal farmers are the core of the Indian rural economy Constituting 0.80 of the total farming community but possessing only 0.36 of the total operational land. The declining trend of per capita land availability poses a serious challenge to the sustainability and profitability of farming. Under such conditions, it is appropriate to integrate land-based enterprises such as dairy, fishery, poultry, duckery, apiary, field and horticultural cropping within the farm, with the objective of generating adequate income and employment for these small and marginal farmers Under a set of farm constraints and varying levels of resource availability and Opportunity. The integration of different farm enterprises can be achieved with the help of a linear programming model. For the current review, integrated farming systems models were developed, by Way Of illustration, for the marginal, small, medium and large farms of eastern India using linear programming. Risk analyses were carried out for different levels of income and enterprise combinations. The fishery enterprise was shown to be less risk-prone whereas the crop enterprise involved greater risk. In general, the degree of risk increased with the increasing level of income. With increase in farm income and risk level, the resource use efficiency increased. Medium and large farms proved to be more profitable than small and marginal farms with higher level of resource use efficiency and return per Indian rupee (Rs) invested. Among the different enterprises of integrated farming systems, a chain of interaction and resource flow was observed. In order to make fanning profitable and improve resource use efficiency at the farm level, the synergy among interacting components of farming systems should be exploited. In the process of technology generation, transfer and other developmental efforts at the farm level (contrary to the discipline and commodity-based approaches which have a tendency to be piecemeal and in isolation), it is desirable to place a whole-farm scenario before the farmers to enhance their farm income, thereby motivating them towards more efficient and sustainable fanning.

Bayesian clustering of farm types using the mixtures model

A Bayesian method of classifying observations that are assumed to come from a number of distinct subpopulations is outlined. The method is illustrated with simulated data and applied to the classification of farms according to their level and variability of income. The resultant classification shows a greater diversity of technical charactersitics within farm types than is conventionally the case. The range of mean farm income between groups in the new classification is wider than that of the conventional method and the variability of income within groups is narrower. Results show that the highest income group in 2000 included large specialist dairy farmers and pig and poultry producers, whilst in 2001 it included large and small specialist dairy farms and large mixed dairy and arable farms. In both years the lowest income group is dominated by non-milk producing livestock farms.

Budgetary implications of, and motives for, converting to organic farming: Case study farm business evidence from Great Britain

This paper explores the financial implications of converting to organic farming in Great Britain through a case study of farmers considering conversion in 2002. Most study farmers were motivated to convert for financial, not ideological or life-style reasons; organic meat production was the most common planned enterprise, although those choosing to produce milk, vegetables and cereals were also studied in depth. At the time of study, organic beef and sheep meat production was particularly profitable. It was found that, in these product sectors, a large improvement in Family Farm Income would result if organic production was introduced on the case study farms. With few exceptions, a fall in Family Farm Income during the conversion period would not be an obstacle to farmers changing to organic methods. Fixed cost changes would also not deter conversion but expensive investment in new livestock and appropriate buildings would be required by some of those businesses studied. These findings are, however, dependent upon the price premia assumptions used and, whilst these premia have dropped slightly since the time of study, this would lessen the financial shortfall during the conversion period. There is also the possibility that reversion to conventional agricultural production might occur, perhaps at a faster rate than the original conversion process that was taking place around the turn of the century.

2006 Michigan Dairy Farm Business Analysis Summary

This report summarizes the financial and production records of 139 dairy farms from throughout Michigan in 2006. To be included, the farms must have produced at least 50 percent of gross cash farm income from milk and dairy animal sales. The records came from Michigan State University’s TelFarm project and the Farm Credit Service system in Michigan. The values were pooled into averages for reporting purposes. The farms are larger than would be the average of all dairy farms in Michigan. While considerable variation in the data exists, average values are reported in the summary tables and discussion that follows.

EC71-854 Income Statement (Revised)

This extension circular is an income statement form that covers the following areas: Cash Farm Income (grain/hay sales, livestock sales, livestock product sales, government payments, custom work); Cash Farm Expenses (cash operating, breeding livestock purchases, gross cash farm expenses); Adjustment (inventory, machinery/equipment depreciation, fixed farm improvements depreciation, capital gain or loss on machinery/equipment, gross sales of machinery/equipment, real estate sold); and Non-Farm Income (operators's wage, wife's wage, interest/dividend income, gifts/inheritances, gain or loss on security, non-farm inventory change, net income on other farms owned and non-farm real estate).

Classification criteria and commercial profile re-definition of the Family Farm Agriculture in Chile, Maule region

In Chile, small-scale farmers are classified according to old approaches from 1993 that do not include changes occurred in the last two decades. Maule is the region with most rural population in Chile which represents a significant stratum for development, innovation and competitiveness. This study explores a new approach of small-scale farmers -associated with Family Farm Agriculture (AFC) - classification in Chile and it describes a commercial profile or AFC-1 for famers of the Maule Region. A Cluster analysis to determine AFC-1 farmers is used. The analysis includes four association variables: Total Assets, Farm Income, Production Costs and Management Indicators. The results suggest that 16.4% of the farmers have a commercial profile and they could stay out support provided by the National Institute for Agricultural Development (INDAP). This group of farmers would not belong to AFC in short terms. This fact could bring restriction to AFC-1 farmers such as lack of credit access, less investment incentives and technical assistance. Thus, it would expect low process of technology adoption and welfare improvement. New agrarian policies must be warranted to support this important group of famers with a commercial profile.