Factors affecting variability in farm and off-farm income
AbstractPurpose – The purpose of this paper is to examine the factors affecting the relative variability in farm and off-farm income for Canadian farm operators. Design/methodology/approach – Variability of farm and off-farm income is analyzed using a dataset of 17,000 farm operators from 2001 to 2006. Relative ranking of the coefficients of variation (CV) for farm and off-farm income are compared across farm types and are regressed against factors conditioning the variations. Findings – Greater reliance on farm income results in lower (greater) relative variability in farm (off-farm) income. Larger commercial operations experience larger farm income volatility because they are less risk averse or they can manage more risk. Diversification and off-farm employment appear to be risk management strategies for commercial operations. Research limitations/implications – Government payments have a small, positive effect on farm and off-farm income variability, indicating this support leads farmers to take on more risky activities and/or reduce the use of self-insurance activities. Results could also be due to the lag between the time of the income reduction and the time in which the aid is received. Further research is necessary to decipher the effects of government support on farm decisions. Practical implications – The results on relative variation in the farm and off-farm income across farm type raises questions about whether government programs should target specific operations. Originality/value – While income variation remains a focus of public policy, factors affecting its variability are not well-understood. Studies have examined the level of farm income and the decision to participate in off-farm employment but none has examined the variance in both income sources.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Agricultural Finance Review.
Volume (Year): 71 (2011)
Issue (Month): 3 (November)
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Other versions of this item:
- Poon, Kenneth & Alfons, Weersink, 2011. "Factors Affecting Variability in Farm and Off-farm Income," Working Papers 102064, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Euan Phimister & Esperanza Vera-Toscano & Alfons Weersink, 2002. "Female Participation and Labor Market Attachment in Rural Canada," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 210-221.
- Enjolras, Geoffroy & Capitanio, Fabian & Aubert, Magali & Adinolfi, Felice, 2012.
"Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy,"
123rd Seminar, February 23-24, 2012, Dublin, Ireland
122478, European Association of Agricultural Economists.
- Geoffroy Enjolras & Fabian Capitanio & Magali Aubert & Felice Adinolfi, 2014. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," Working Papers 258074, Institut National de la Recherche Agronomique, France.
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