Is Growth in Land-based Wealth Sustaining Part-time Farming?
AbstractSmall-scale farm holdings in many EU countries have shown remarkable resilience in the face of declining real farm incomes and a widening gap between farm and non-farm earnings. This article examines the extent to which favourable off-farm labour market conditions coupled with growth in land values has contributed to the observed resilience of small-scale family farms. Using Northern Ireland data, our analysis indicates that farm household behaviour is influenced not just by current farm income, but also expected capital asset returns. Increased wealth, associated with continuing land ownership, gives rise to the proposition that the link between off-farm incomes, increased land values and remaining in farming may be associated with farmers pursuing wealth maximizing objectives, whilst still maintaining a rural way of life. In this context, the capitalization of agricultural support payments into land values, under successive CAP reforms, has encouraged farmers to hold land back from the market in expectation of future gains. In addition, preferential tax arrangements in the treatment of land also impede adjustment. Alongside increased wealth through land ownership the study confirms off-farm sources of income and, in particular, income from off-farm employment, as being of paramount importance in ensuring the sustainability of small farms. Copyright (c) 2009 The Authors. Journal compilation (c) The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2009.
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Bibliographic InfoArticle provided by The Agricultural Economics Society in its journal EuroChoices.
Volume (Year): 8 (2009)
Issue (Month): 3 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1478-0917
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- Mela, Giulio & Longhitano, Davide & Povellato, Andrea, 2012. "The evolution of land values in Italy. Does the influence of agricultural prices really matter?," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122479, European Association of Agricultural Economists.
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