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The increasing importance of nonfarm income and the changing use of labor and capital in rice farming: the case of Central Luzon, 1979–2003

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  • Kazushi Takahashi
  • Keijiro Otsuka

Abstract

There have been sharp increases in nonfarm income among farm households in Central Luzon for the last few decades. This study attempts to identify the effects of the increasing nonfarm income on the use of tractors and threshers and on the employment of hired labor as a substitute for family labor. We found that while the increased nonfarm income positively affects the ownership of tractors, it has no significant impact on the use of agricultural machines due presumably to the development of efficient machine rental markets. We also found that the increased nonfarm income leads to the increased use of hired labor, thereby releasing family labor to nonfarm jobs.

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  • Kazushi Takahashi & Keijiro Otsuka, 2009. "The increasing importance of nonfarm income and the changing use of labor and capital in rice farming: the case of Central Luzon, 1979–2003," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 231-242, March.
    • Handle: RePEc:bla:agecon:v:40:y:2009:i:2:p:231-242
    DOI: 10.1111/j.1574-0862.2009.00372.x
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    2. Zhang, Xiaobo & Yang, Jin & Reardon, Thomas, 2020. "Mechanization outsourcing clusters and division of labor in Chinese agriculture," IFPRI book chapters, in: An evolving paradigm of agricultural mechanization development: How much can Africa learn from Asia?, chapter 2, pages 71-96, International Food Policy Research Institute (IFPRI).
    3. Wang, Huaiyu & Bin, Bing & Pede, Valerien O., 2023. "Adoption of ratoon rice and its impact on technical efficiency of rice farming in China," 2023 Annual Meeting, July 23-25, Washington D.C. 335541, Agricultural and Applied Economics Association.
    4. Bojnec, Štefan & Fertő, Imre, 2022. "Do different types of Common Agricultural Policy subsidies promote farm employment?," Land Use Policy, Elsevier, vol. 112(C).
    5. Tschirley, David & Reardon, Thomas, 2016. "Impact on Employment and Migration of Structural and Rural Transformation," Food Security International Development Working Papers 245895, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Rob Vos, 2018. "Agricultural and rural transformations in Asian development," WIDER Working Paper Series wp-2018-87, World Institute for Development Economic Research (UNU-WIDER).
    7. Takeshima, Hiroyuki & Houssou, Nazaire & Diao, Xinshen, 2018. "Effects of tractor ownership on returns-to-scale in agriculture: Evidence from maize in Ghana," Food Policy, Elsevier, vol. 77(C), pages 33-49.
    8. Al-Amin, A.K.M. Abdullah & Hossain, M.J., 2019. "Impact of non-farm income on welfare in rural Bangladesh: Multilevel mixed-effects regression approach," World Development Perspectives, Elsevier, vol. 13(C), pages 95-102.
    9. Kaat Van Hoyweghen & Goedele Van den Broeck & Miet Maertens, 2020. "Employment Dynamics and Linkages in the Rural Economy: Insights from Senegal," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 904-928, September.
    10. Lili Chen & Jiquan Peng & Yibei Zhang, 2022. "Research on the Impact of Rural Land Transfer on Non-Farm Employment of Farm Households: Evidence from Hubei Province, China," IJERPH, MDPI, vol. 19(23), pages 1-19, November.
    11. Silva, João Vasco & Reidsma, Pytrik & Lourdes Velasco, Ma. & Laborte, Alice G. & van Ittersum, Martin K., 2018. "Intensification of rice-based farming systems in Central Luzon, Philippines: Constraints at field, farm and regional levels," Agricultural Systems, Elsevier, vol. 165(C), pages 55-70.
    12. Silva, João Vasco & Pede, Valerien O. & Radanielson, Ando M. & Kodama, Wataru & Duarte, Ary & de Guia, Annalyn H. & Malabayabas, Arelene Julia B. & Pustika, Arlyna Budi & Argosubekti, Nuning & Vithoon, 2022. "Revisiting yield gaps and the scope for sustainable intensification for irrigated lowland rice in Southeast Asia," Agricultural Systems, Elsevier, vol. 198(C).
    13. Maligalig, R. & Umbeger, W. & Demont, M. & Peralta, A., 2018. "Farmer preferences for rice varietal trait improvements in Nueva Ecija, Philippines: A latent class cluster approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277476, International Association of Agricultural Economists.
    14. Benjamin Davis & Paul Winters & Thomas Reardon & Kostas Stamoulis, 2009. "Rural nonfarm employment and farming: household‐level linkages," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 119-123, March.
    15. Idelphonse O. Saliou & Afio Zannou & Augustin K. N. Aoudji & Albert N. Honlonkou, 2020. "Drivers of Mechanization in Cotton Production in Benin, West Africa," Agriculture, MDPI, vol. 10(11), pages 1-13, November.
    16. Rob Vos, 2018. "Agricultural and rural transformations in Asian development," WIDER Working Paper Series 87, World Institute for Development Economic Research (UNU-WIDER).
    17. Linxiu Zhang & Weiliang Su & Tor Eriksson & Chengfang Liu, 2016. "How Off-farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(3), pages 37-51, May.
    18. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.

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