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Assessing the Impact of the 'Decoupling' Reform of the Common Agricultural Policy on Irish Farmers' Off-farm Labour Market Participation Decisions

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  • Thia C. Hennessy
  • Tahir Rehman
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    Abstract

    This paper assesses the impact of the 'decoupling' reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision-making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers' time allocation decisions. The relationship postulated is that 'decoupling' of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off-farm employment market and that the amount of time allocated to off-farm work will increase. Copyright 2008 The Authors. Journal compilation 2008 The Agricultural Economics Society.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Agricultural Economics.

    Volume (Year): 59 (2008)
    Issue (Month): 1 (02)
    Pages: 41-56

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    Handle: RePEc:bla:jageco:v:59:y:2008:i:1:p:41-56

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    Cited by:
    1. Kallas, Zein & Serra, Teresa & Gil, Jose Maria, 2009. "Effects Of Policy Instruments On Farm Investments And Production Decisions In The Spanish Cop Sector," 2009 Conference, August 16-22, 2009, Beijing, China 49971, International Association of Agricultural Economists.
    2. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2011. "Does Common Agricultural Policy Reduce Farm Labour Migration? A Panel Data Analysis Across EU Regions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114597, European Association of Agricultural Economists.
    3. Loughrey, Jason & Hennessy, Thia & Hanrahan, Kevin & Donnellan, Trevor & Raimondi, Valentina & Olper, Alessandro, 2013. "Determinants of Farm Labour Use: A Comparison between Ireland and Italy," Working Papers 157119, Factor Markets, Centre for European Policy Studies.
    4. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
    5. Zier, Patrick, 2013. "Econometric impact assessment of the Common Agricultural Policy in East German agriculture," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 71, number 71.
    6. Chang, Yang-Ming & Huang, Biing-Wen & Chen, Yun-Ju, 2012. "Labor supply, income, and welfare of the farm household," Labour Economics, Elsevier, vol. 19(3), pages 427-437.
    7. Peter Howley & Emma Dillon & Thia Hennessy, 2014. "It’s not all about the money: understanding farmers’ labor allocation choices," Agriculture and Human Values, Springer, vol. 31(2), pages 261-271, June.
    8. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, . "Reallocation of Agricultural Labor and Farm Subsidies: Evidence From the EU Regions," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126645, International Association of Agricultural Economists.
    9. Olper,Alessandro, & Raimondi,Valentina & Cavicchioli,Daniele & Vigani,Mauro, 2012. "Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions," Factor Markets Working Papers 133, Centre for European Policy Studies.
    10. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2013. "The Impact of CAP Payments on the Exodus of Labour from Agriculture in Selected EU Member States," Factor Markets Working Papers 180, Centre for European Policy Studies.
    11. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2012. "Key Issues in Agricultural Labour Markets: A Review of Major Studies and Project Reports on Agriculture and Rural Labour Markets," Working Papers 122847, Factor Markets, Centre for European Policy Studies.
    12. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2013. "The Impact of CAP Payments on the Exodus of Labour from Agriculture in Selected EU Member States," Working Papers 160742, Factor Markets, Centre for European Policy Studies.
    13. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair Creation-Date: 2012-02, . "Key Issues in Agricultural Labour Markets: A Review of Major Studies and Project Reports on Agriculture and Rural Labour Markets," Factor Markets Working Papers 126, Centre for European Policy Studies.

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