The Nature of the Diversified Farm Household

This paper presents a theoretical approach that explains farm household diversification decisions by the relative attractiveness of both food production and family businesses. The empirical analysis of diversified activities of Swiss farm households shows that a low household income leads to diversification by off-farm activities, while a high income leads to diversification by on-farm activities. It is also shown that arable farms, mountain farms and farm households with a non-agricultural education are more likely to enter off-farm activities.diversification, Switzerland, household, Consumer/Household Economics, Industrial Organization, Labor and Human Capital, P42, Q12,

The Depopulation of Rural Areas and the Farming System

Depopulation of rural areas can entail negative externalities. This paper examines, inter alia, the influence of the farming system on depopulation processes. The population change in rural communities in Switzerland (family-based farming system) and in the German Land Mecklenburg-Western Pomerania (fordistic farming system) is explained through regression analysis by the proportion of persons occupied in the three economic sectors and by other variables. In Switzerland, a high proportion of locals occupied in farming affects population dynamics positively; in Mecklenburg- Western Pomerania, the situation is exactly opposite. This can serve as an argument to support small and networked farms in rural problem regions.Community/Rural/Urban Development,

Do retired farmers need a separate social policy?

Many European countries employ social policy instruments specifically designed for retired farmers. We present the German case and argue from a life course perspective that it may be justified, in principle, to employ specific social policy instruments for groups with their own social characteristics. The Swiss case where retirement policies for farmers do not yet exist, is used for examining the need for special social support instruments. A regression analysis of the financial situation of retired Swiss farmers and a Configural Frequency Analysis of several social parameters was carried out. It cannot be shown that Swiss retired farmers, in default of own social policy instruments, are generally in a precarious situation.Configural Frequency Analysis, life course approach, old age policy, Labor and Human Capital,

OCCUPATIONAL CHOICE AND STRUCTURAL CHANGE

The connection between average sectoral income, occupational choice and structural change has so far only been described vaguely for sectors dominated by small enterprises. Taking agriculture as an example, we first develop a theoretical model in which we explain the decision to take over a farm with the average agricultural household income in the past years and the number of farms with the patterns of occupational choice. We then estimate a regression in which we explain occupational choices by the sectoral income situation and rate of farm decline by earlier occupational choices. The results demonstrate that a good income situation increases the number of occupational choices in favour for farming, and that occupational choices for farming in turn slow down the decline in farm numbers.Occupational choices, Structural change, Agricultural income, Research paper, Labor and Human Capital,

Another look at the distribution of direct payments: The link with part-time farming

This paper contributes to the research about the relationship between off-farm employment and public support, by taking the issue upside down: does off-farm employment give an advantage to farms regarding the level of public support? Our hypothesis is that a higher degree of decoupling enables part-time farms to capture more easily direct payments than full-time farms. To test this, we compare the largely decoupled direct payment system in Switzerland in 2004, and the rather production-oriented payment system in France in 2003. Results show that Switzerland’s policy favoured farmers with an off-farm employment, while the French direct payment system had the opposite effect.direct payments, distribution, part-time farming, Switzerland, France

Defining elasticities for PMP models by estimating marginal cost functions based on FADN Data - the case of Swiss dairy production

The Swiss agricultural sectoral information and forecasting system (SILAS) is based on the PMP standard approach. The marginal cost functions are estimated by exogenous elasticities. Due to the lack of empirical data the elasticities were set for all activities to unity. Based on total milk production costs of FADN farms, regional supply functions were estimated. The results are used to adjust the marginal cost functions of organic and non-organic dairy cow activities in the model SILAS to the empirically estimated functions. The results show that the marginal cost functions in the sectoral model are in general a bit steeper than in the FADN estimations, when elasticities by the value one are applied. Major differences between organic and non-organic milk production could not be observed. Adjusting the slope of the marginal cost functions to the empirically estimated ones leads to slightly different forecast results. Mainly the number of organic cows is higher in the FADN adjusted scenario than in the reference scenario without any adjustments.Marginal cost function, milk production costs, PMP-based sectoral model, Demand and Price Analysis, Livestock Production/Industries,

OF FARMERS AND BUTCHERS - COMPARING THE DETERMINANTS OF EXIT IN SHRINKING SECTORS

Farmers and butchers in Switzerland both operate in shrinking sectors. The number of businesses and the sectoral turnover has decreased by about 40 per cent over the last twenty years for both sectors. It is, however, an interesting question whether the determinants of exit are the same for the primary sector and the secondary and tertiary sector. A regression analysis reveals that, for farmers, a larger part of exits can be traced back to economic factors if compared to butchers. For butchers, the profit of the business is the key determinant of structural change, whereas for farms, the level of prices is an important signal factor. Interest rates influence structural change for both sectors. The study points to the importance of sector-specific research.Agribusiness, Farm Management,

Labor constraints on choosing profitable products for part-time farmers in Swiss agriculture.

Based on a conceptual framework, we develop the hypothesis that part-time farmers invest in less profitable products than full-time farms, due to the necessary minimum labour requirements which entering and running profitable production processes require. Descriptive statistics for Swiss farms show some indications for this hypothesis, like a much lower total revenue and lower agricultural income of part-time farms, despite a comparable value of the farm’s assets. A regression analysis for the period 1996-2005 confirms that Swiss part-time farms tend to focus on products with low labour profitability. This may explain why part-time farming in Switzerland is less developed than in most other European countries, and raises the question whether part-time farming offers a solution for structural change process in small-structured agricultural systems affected by imperfections on factor markets.farms, part-time, profitability, Switzerland

Classification of agricultural systems based on pesticide use intensity and safety

An analysis of socio-economic driving forces in crop protection is proposed to improve the implementation of sustainable strategies. The analysis includes: (1) a classification of agricultural systems based on pesticide use intensity and safety, (2) an evaluation of the profitability of farming systems and identification of socio-economic factors that influence pesticide use and (3) formulation of policy recommendations. We find that for cereals and for fruit trees alike, crop yields are much higher for agricultural systems with high doses of pesticides. The safety of applied pesticides does not affect crop protection costs significantly. For cropping systems characterised by low-intensity in pesticide use, the application of safer products has a positive effect on reduction of crop protection costs.pesticide use, driving forces in crop protection, economic analysis of agricultural systems, Crop Production/Industries,

Generalized entropies and logarithms and their duality relations

For statistical systems that violate one of the four Shannon-Khinchin axioms, entropy takes a more general form than the Boltzmann-Gibbs entropy. The framework of superstatistics allows one to formulate a maximum entropy principle with these generalized entropies, making them useful for understanding distribution functions of non-Markovian or non-ergodic complex systems. For such systems where the composability axiom is violated there exist only two ways to implement the maximum entropy principle, one using escort probabilities, the other not. The two ways are connected through a duality. Here we show that this duality fixes a unique escort probability, which allows us to derive a complete theory of the generalized logarithms that naturally arise from the violation of this axiom. We then show how the functional forms of these generalized logarithms are related to the asymptotic scaling behavior of the entropy.Comment: 4 pages, 1 page supporting informatio