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1 – 10 of 656Weiliang Su, Chengfang Liu, Linxiu Zhang, Renfu Luo and Hongmei YI
– The purpose of this paper is to examine the impact of off-farm employment on agricultural fixed assets among households in rural China.
Abstract
Purpose
The purpose of this paper is to examine the impact of off-farm employment on agricultural fixed assets among households in rural China.
Design/methodology/approach
The authors drew on panel data from two rounds of household-level surveys of more than 2,000 households in rural China. The two surveys were conducted in 2008 and 2012 in five provinces. The authors used instrumental-variable Tobit model to test whether the current value of agricultural fixed assets differ between households with different levels off-farm employment.
Findings
The authors observe that off-farm employment has a negative effect on the current value of agricultural fixed assets at the household level in rural China.
Originality/value
The authors believe that the results will contribute positively to the assessment of the effect of off-farm employment on the investment in agricultural fixed assets at the household level in the context of China.
Michael Thomas Hayden, Ruth Mattimoe and Lisa Jack
The purpose of this paper is to contribute to a better understanding of the financial decision-making process of farmers and to highlight the potential role that improved farm…
Abstract
Purpose
The purpose of this paper is to contribute to a better understanding of the financial decision-making process of farmers and to highlight the potential role that improved farm financial management (FFM) could play in developing sustainable farm enterprises.
Design/methodology/approach
This paper adopts a qualitative approach with 27 semi-structured interviews exploring farmers’ financial decision-making processes. Subsequently, the interview findings were presented to a focus group. Sensemaking theory is adopted as a theoretical lens to develop the empirical findings.
Findings
The evidence highlights that FFM has a dual role to play in farmer decision-making. Some FFM activities may act as a cue, which triggers a sensebreaking activity, causing the farmer to enter a process of sensemaking whilst some/other FFM activities are drawn upon to provide a sensegiving role in the sensemaking process. The role of FFM in farmer decision-making is strongly influenced by the decision type (strategic or operational) being undertaken and the farm type (dairy, tillage or beef) in operation.
Originality/value
The literature suggests that the majority of farmers spend little time on financial management. However, there are farmers who have quite a high level of engagement in FFM activities, when undertaking strategic farm expansion decisions. Those FFM activities help them to navigate through operational decision-making and to make sense of their strategic decision-making.
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Teresa Serra, Barry K. Goodwin and Allen M. Featherstone
Off‐farm investment decisions of farm households are analyzed. Farm‐level data for a sample of Kansas farms observed from 1994 through 2000 are utilized. A system of censored…
Abstract
Off‐farm investment decisions of farm households are analyzed. Farm‐level data for a sample of Kansas farms observed from 1994 through 2000 are utilized. A system of censored dependent variable models is estimated to investigate the factors that influence the composition of farm households’ portfolios. The central question underlying the analysis is whether farm income variability influences off‐farm investment decisions. Previous analyses on the determinants of non‐farm investments have failed to consider the role of income variability. Results of this study indicate that higher farm income fluctuations increase the relevance of non‐farm assets in the farm household portfolio, thus suggesting these assets are used as farm household income risk management tools.
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Veronica Wachong Castro, Nico Heerink, Xiaoping Shi and Wei Qu
The purpose of this paper is to gain more insight into the relationship between off‐farm employment of rural households and water‐saving investments and irrigation water use in…
Abstract
Purpose
The purpose of this paper is to gain more insight into the relationship between off‐farm employment of rural households and water‐saving investments and irrigation water use in rural China.
Design/methodology/approach
Data from a survey held among 317 households in Minle County, Zhangye City, Gansu Province, covering the year 2007, are used for a probit analysis explaining investments in land leveling and for an ordinary least squares regression explaining irrigation water use per mu.
Findings
Off‐farm employment is not significantly related to investments in land leveling, but is negatively associated with water use per mu. In addition, the paper finds that the share of migrant students in a household is positively related to investments in land leveling. The results indicate the presence of major factor market imperfections in the research area, and confirm that the new economics of labor migration (NELM) approach is more relevant for analyzing off‐farm employment and agricultural production in China than neoclassical economic theory.
Originality/value
The paper expands the NELM approach towards the analysis of water‐saving investments and water use. In addition, it distinguishes migrant students as an important category that should be taken into account in analyzing farm household decisions making.
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Ashok K. Mishra and Mitchell J. Morehart
This investigation considers factors affecting off‐farm investment of farm households. A national farm‐level survey was used to evaluate the effects of various farm and operator…
Abstract
This investigation considers factors affecting off‐farm investment of farm households. A national farm‐level survey was used to evaluate the effects of various farm and operator characteristics on the likelihood of off‐farm investment. Results suggest differences in level of education, age of the operator, off‐farm income, household net worth, leverage, farm size, farm diversification, management skills, and location influence off‐farm investment decisions.
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Erwin Wauters, Yann de Mey, Frankwin van Winsen, Steven Van Passel, Mark Vancauteren and Ludwig Lauwers
Building on the risk balancing theory and on recent discussions the appropriateness of using farm income maximization as behavioural assumption, this paper extends the risk…
Abstract
Purpose
Building on the risk balancing theory and on recent discussions the appropriateness of using farm income maximization as behavioural assumption, this paper extends the risk balancing framework by accounting for business-household interactions. The purpose of this paper is to theoretically introduce the concept of farm household risk balancing, a theoretical framework in which the farm household sets a constraint on the total household-level risk and balances farm-level and off-farm-level risk.
Design/methodology/approach
The paper argues that the risk behaviour of farmers is better understood by considering risk at the household level. Using an analytical framework, equations are derived linking the farm activities, off-farm activities, consumption and business and private liquidity.
Findings
The framework shows that a farm household that wants to minimize the risk that total household cash flow falls below consumption needs, may exhibit a wide variety of behavioural responses to changes in the policy and economic environment.
Social implications
The framework suggests multiple ways for policy makers and individual farmers to support risk management.
Originality/value
Risk management is at the core of the agricultural policy and it is of paramount importance to be able to understand behavioural responses to market and policy instruments. This paper contributes to that by suggesting that the focus of current risk analysis and management studies may be too narrowly focused at the farm level.
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Yuying Liu, Alan Renwick and Xinhong Fu
The purpose of this paper is to examine the impact of off-farm income on food expenditure, using survey data of 493 rural households from Gansu, Henan and Shandong provinces in…
Abstract
Purpose
The purpose of this paper is to examine the impact of off-farm income on food expenditure, using survey data of 493 rural households from Gansu, Henan and Shandong provinces in China.
Design/methodology/approach
A two-stage least squares estimator is used to jointly estimate the determinants of off-farm income and the direct impact of off-farm income on food expenditure while controlling for the endogeneity issue associated with off-farm income variable.
Findings
The empirical results show that gender, education of household head, household size, farm size, the presence of children, smartphone use and asset ownership mainly determine off-farm income, and the off-farm income affects food expenditure of rural households significantly. In particular, the results show that a 1,000 yuan increase in per capita off-farm income increases per capita food expenditure by 61 yuan. Further estimations reveal that off-farm income has a larger effect on food expenditure of high-income rural households relative to their low-income counterparts.
Originality/value
Although poverty implications of off-farm income have been well documented, few studies have analysed the effects of off-farm income on food expenditure of rural households. To the best of the authors’ knowledge, there are no studies on this issue that focus on rural China. Therefore, the present study attempts to provide a first insight into the association between off-farm income and food expenditure of rural households in China, with the aim of providing useful evidence for policymakers in their efforts to reduce rural and urban food consumption gap and further increase social welfare.
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Simon Jetté‐Nantel, David Freshwater, Ani L. Katchova and Martin Beaulieu
For many farm families and operators across the OECD countries, off‐farm income has become a major determinant of their well‐being. The purpose of this paper is to investigate the…
Abstract
Purpose
For many farm families and operators across the OECD countries, off‐farm income has become a major determinant of their well‐being. The purpose of this paper is to investigate the potential role of off‐farm employment as a risk management tool among farm operators.
Design/methodology/approach
A two‐part model is applied to a longitudinal farm‐level data set for about 20,000 Canadian farms, from 2001 to 2006, in order to estimate the relationship between farm income risk and the decision to participate in the off‐farm labor market and the level of off‐farm employment income.
Findings
The variability of farm market revenue is found to be positively related to the likelihood of off‐farm work and the level of off‐farm employment income, in particular for operators of relatively large farms. Hence, farm operators' production decisions appear to be conditioned on an income portfolio that includes a substantial amount of off‐farm income for all sizes of farms.
Social implications
These results reinforce the need to consider the portfolio effect induced by the integration of farm resources within the non‐farm sector. This is particularly relevant to risk management farm policies that have typically considered decisions made in the agricultural sector in isolation.
Originality/value
This paper uses a true farm‐level panel data set to investigate the relationship between farm income risk and off‐farm work. The size of the data set also allows the robustness of the results across farm typologies and size to be tested. This study contributes to the understanding of structural changes in the farm sector, and their potential implications for both rural and agricultural policies.
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Kenneth Poon and Alfons Weersink
The purpose of this paper is to examine the factors affecting the relative variability in farm and off‐farm income for Canadian farm operators.
Abstract
Purpose
The purpose of this paper is to examine the factors affecting the relative variability in farm and off‐farm income for Canadian farm operators.
Design/methodology/approach
Variability of farm and off‐farm income is analyzed using a dataset of 17,000 farm operators from 2001 to 2006. Relative ranking of the coefficients of variation (CV) for farm and off‐farm income are compared across farm types and are regressed against factors conditioning the variations.
Findings
Greater reliance on farm income results in lower (greater) relative variability in farm (off‐farm) income. Larger commercial operations experience larger farm income volatility because they are less risk averse or they can manage more risk. Diversification and off‐farm employment appear to be risk management strategies for commercial operations.
Research limitations/implications
Government payments have a small, positive effect on farm and off‐farm income variability, indicating this support leads farmers to take on more risky activities and/or reduce the use of self‐insurance activities. Results could also be due to the lag between the time of the income reduction and the time in which the aid is received. Further research is necessary to decipher the effects of government support on farm decisions.
Practical implications
The results on relative variation in the farm and off‐farm income across farm type raises questions about whether government programs should target specific operations.
Originality/value
While income variation remains a focus of public policy, factors affecting its variability are not well‐understood. Studies have examined the level of farm income and the decision to participate in off‐farm employment but none has examined the variance in both income sources.
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The purpose of this paper is to examine the factors that lead to the controversy within the existing empirical literature on the relationship between land tenure and agricultural…
Abstract
Purpose
The purpose of this paper is to examine the factors that lead to the controversy within the existing empirical literature on the relationship between land tenure and agricultural investments in China.
Design/methodology/approach
This study conducts a meta-regression analysis (MRA) based on 265 samples from 29 selected studies. These studies are collected from different regions and populations; therefore, this study utilizes a random-effects meta-regression model to control between-study heterogeneity.
Findings
The empirical results show that the variable “land-related long-term investments” significantly affects the relationship between land tenure and agricultural investments. The variables: “ration land,” “land titling” and “land transfer rights” all have significant effects on this relationship, but at different levels. The study area (e.g. “western China,” “central/inland China,” “two regions contained”), “plot level,” “panel data,” “sample size,” “considered endogeneity” and “off-farm employment” variables all significantly influence the relationship. Additionally, the results show that the relationship is significantly affected by the survey time.
Practical implications
Policymakers should treat the existing research conclusions with caution and pay more attention to defining land tenure. The relationship between land tenure and agricultural investments also depends on regional resource availability. Therefore, land property rights policies should be region-specific in order to successfully encourage agricultural investments.
Originality/value
In this study, the author collectively examines existing empirical studies to investigate whether their inconsistent results are affected by research characteristics. To the author’s knowledge, this is the first study that analyzes land tenure and agricultural investments in China using MRA. Future research should refine the definition of land tenure, the selection of agricultural investment types, the research method and the method of data collection.
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