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What do Agricultural Income and Productivity Measurements Really Mean?

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  • Günther H. Schmitt

Abstract

Statistical data on labour productivity and income in agriculture reveal large discrepancies between various EC member states, both with respect to their absolute levels and in relation to non‐farm productivity and income in the respective countries. Insofar as they appear to reflect the failure of markets in allocating agricultural resources efficiently, and seem to be inconsistent with conventional wisdom concerning structural adjustment of agriculture, however, it can be seen that those data are misleading to a large extent. Based on a simple model of optimal time allocation between farm and non‐farm activities of members of farm households, it is demonstrated that farm labour productivity and income must be different according to differences in the relation of farm to non‐farm labour supply. The implications concerning international, interregional, intersectoral and intertemporal comparisons of income and productivity are discussed as well as the relevance of market failure in agriculture.

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  • Günther H. Schmitt, 1988. "What do Agricultural Income and Productivity Measurements Really Mean?," Agricultural Economics, International Association of Agricultural Economists, vol. 2(2), pages 139-157, October.
    • Handle: RePEc:bla:agecon:v:2:y:1988:i:2:p:139-157
    DOI: 10.1111/j.1574-0862.1988.tb00044.x
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    Cited by:

    1. Sharma, Govinda & Pandit, Ram & White, Ben & Polyakov, Maksym, 2015. "The Income Diversification Strategies of Smallholder Coffee Producers in Nepal," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202580, Australian Agricultural and Resource Economics Society.
    2. Dewbre, Joe & Mishra, Ashok K., 2002. "Farm Household Incomes And U.S. Government Program Payment," 2002 Annual meeting, July 28-31, Long Beach, CA 19780, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Giannakis, Elias & Bruggeman, Adriana & Zoumides, Christos, 2016. "Determinants of agricultural labour productivity across the European regions," 149th Seminar, October 27-28, 2016, Rennes, France 244899, European Association of Agricultural Economists.
    4. Giannakis, Elias & Bruggeman, Adriana, 2018. "Exploring the labour productivity of agricultural systems across European regions: A multilevel approach," Land Use Policy, Elsevier, vol. 77(C), pages 94-106.
    5. Elisabetta Croci & Silvia Sorana, 2013. "Le variazioni nei redditi agricoli ai tempi della Grande recessione," AGRICOLTURA ISTITUZIONI MERCATI, FrancoAngeli Editore, vol. 2013(3), pages 13-32.

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