Do decoupled payments really encourage farmers to work more off farm? A micro-level analysis of incentives and preferences

According to neo-classical theory, farm operators’ labour allocation is determined by the relative wage they can earn from their labour on and off the farm. At the equilibrium, time should be allocated so that the marginal returns from on- and off-farm work are equal. Thus, a move from coupled to decoupled payments should have important impacts on labour allocation, as it reduces the return to farm labour and increases the unearned income of operators. However, empirical studies on decoupling have shown so far only limited impact from decoupling and sometimes contradictory findings. In this paper, individual preferences and constraints are taken into account to try and identify potential barriers to labour allocation adjustment. Empirical analysis based on the intentions to adjust to decoupling of a sample of French farmers confirms a limited impact of the change in policy and calls for further investigation of the potential barriers to adjustment.Decoupling, time allocation, farm operators, Agricultural and Food Policy, Labor and Human Capital,

Present at the transition: remembering Professor Oleh Havrylyshyn

Renowned scholar of post-communist transition, Professor Oleh Havrylyshyn, passed away on 20 September 2020. In this piece, Dr Elodie Douarin pays tribute to his work as a scholar and colleague, reflects on the contributions of his last book, Present at the Transition, and shares her experience of working with him on their recent co-edited collection, Palgrave Handbook of Comparative Economics. Present at the Transition: Remembering Professor Oleh Havrylyshy

Poverty, Livelihoods and War Legacies: the Case of Post-War Rural Kosovo

This paper examines the effects of war on livelihood portfolios and welfare outcomes of rural households in Kosovo using the 2000 Kosovo Living Standards Measurement Survey. We question to what extent the legacy of war was experienced through selection into low return livelihood activities or through decreases in welfare generally. We first identify portfolios using a clustering algorithm which groups households pursuing similar combinations of activities. The emerging clusters are comparable to those described in more qualitative studies for Kosovo in the immediate post-conflict period. We then examine the determinants of livelihood portfolio choice and the consequences of these for welfare outcomes, controlling for war legacies and selection into specific portfolios. We find evidence of a relationship between a household’s war experience and their livelihood choices and that war exposure has different impacts on household welfare depending on the livelihood portfolio adopted. We also identify significant selection effects on welfare for three out of four of our livelihood clusters, highlighting the fact that selecting into a specific portfolio raised or lowered welfare above expected levels.

Impact of the CAP Single Farm / Area payments on farmers’ decisions : Preliminary results of a farm-level survey

This paper deals with the potential impact of the introduction of the SFP in EU-15 and of the SAP in NMS on farmers’ decisions. A survey conducted in Sweden, Lithuania and Slovakia in 2005 investigates farmers’ intentions over the next 5 years in two scenarios: introduction of SFP/SAP, and if the previous policy (Agenda 2000 or pre-accession national policy) remains in place. Results of the survey reveal that the global effect of the CAP switch on Swedish sector seems to be a reduction in production and in the willingness to remain a farmer. By contrast, in Slovakia and Lithuania individual farmers are willing to stay longer in farming and to increase their UAA. As for farmers’ expectation regarding the future of the CAP, the survey results show that in the three countries the most probable policy is continuing decoupled payments. However, the second most probable option is payments recoupled to production activities for Slovakian and Lithuanian farmers, but no payment at all for Swedish farmers

Is the post-communist transition over?

Support for economic liberalization reforms is essential, but it grows stronger only where societies experience the effects of reversing these reform

Can the CAP payments facilitate the growth of individual farms in the NMS post-EU accession?

The impact of the introduction of the EU Single Area Payments (SAP) on farm strategy is investigated for a sample of Lithuanian farms, utilising farm accounting and survey data. The applications of two investment models demonstrate that the credit market in Lithuania was imperfect prior to accession and that some farms were financially constrained. The introduction of the SAP has a significant, positive influence on farmers’ intentions to expand their farm area compared to a baseline scenario of the continuation of pre-accession policy. The switch in policy has a more pronounced effect on farms that were previously credit constrained. While the SAP has been presented as a policy support that is decoupled from production, its introduction will nevertheless have ex post coupled effects, most notably an income multiplier effect on credit constrained farmers.Single Area Payments (SAP), Common Agricultural Policy (CAP), credit, Lithuania,

Farm expansion in Lithuania after accession to the EU: The role of CAP payments in alleviating potential credit constraints.

The impact of the introduction of EU Single Area Payments (SAP) on farm expansion strategy in Lithuania is investigated, utilizing farm accounting and survey data. The introduction of the SAP has a positive influence on farmers’ intentions to expand their area compared to a baseline scenario of the hypothetical continuation of pre-accession policy. The switch in policy has a more pronounced effect on farms that were previously credit constrained. While the SAP has been presented as a support that is decoupled from production, its introduction may have ex post coupled effects, through an income multiplier effect on credit constrained farmersSingle Area Payments (SAP), Common Agricultural Policy (CAP), credit, investment, Lithuania

Can the CAP payments facilitate the growth of individual farms in the New Member States post-EU accession?

The impact of the introduction of EU Single Area Payments (SAP) on farm strategy in New Member States is investigated for a sample of Lithuanian farms, utilizing farm accounting and survey data. The application of two investment models demonstrates that the credit market in Lithuania was imperfect prior to accession and that some farms were financially constrained. The introduction of the SAP has a significant, positive influence on farmers’ intentions to expand their farm area compared to a baseline scenario of the continuation of pre-accession policy. The switch in policy has a more pronounced effect on farms that were previously credit constrained. While the SAP has been presented as a policy support that is decoupled from production, its introduction will nevertheless have ex post coupled effects, most notably an income multiplier effect on credit constrained farmers.Single Area Payments (SAP), Common Agricultural Policy (CAP), credit, Lithuania, Agricultural and Food Policy, Farm Management,

The Feminisation U, cultural norms, and the plough

The Feminisation U describes the tendency of female labour force participation (FLFP) to first decline and then rise in the process of economic development. While the Feminisation U is often presented as a ‘stylised fact’ of development, empirical support for it is mixed. Here, we show that cultural norms inherited from ancestral plough use exert a moderating influence on the shape of the Feminisation U. Specifically, we find a significantly U-shaped path of FLFP only in countries whose ancestors employed a plough-based agricultural technology. The shape of the U-curve becomes progressively more muted as the share of a country's ancestors that practiced plough agriculture decreases. In countries with little or no legacy of historical plough use, the time path of FLFP is effectively flat. This pattern of results is robust to correcting for dynamic panel bias, instrumenting for per-capita income, and controlling for other potential effect modifiers. Our findings are compatible with a nuanced reading of the main theoretical models proposed in the literature to explain the Feminisation U

Integrated Pest Management Portfolios in UK Arable Farming: Results of a Farmer Survey

BACKGROUND. Farmers are faced with a wide range of pest management (PM) options which can be adopted in isolation or alongside complement or substitute strategies. This paper presents the results of a survey of UK cereal producers focusing on the character and diversity of PM strategies currently used by, or available to, farmers. In addition, the survey asked various questions pertaining to agricultural policy participation, attitude toward environmental issues, sources of PM advice and information and the important characteristics of PM technologies. RESULTS. The results indicate that many farmers do make use of a suite of PM techniques and that their choice of integrated PM (IPM) portfolio appears to be jointly dictated by farm characteristics and Government policy. Results also indicate that portfolio choice does affect the number of subsequent insecticide applications per crop. CONCLUSIONS. These results help to identify the type of IPM portfolios considered adoptable by farmers and highlight the importance of substitution in IPM portfolios. As such, these results will help to direct R&D effort toward the realisation of more sustainable PM approaches and aid the identification of potential portfolio adopters. These findings highlight the opportunity a revised agri-environmental policy design could generate in terms of by enhancing coherent IPM portfolio adoption.Pest management; pesticide alternatives; technology and portfolio approaches;