The farm income problem in the European Union: a research framework and a longitudinal empirical evaluation

In this paper we first discuss the several empirical challenges that researchers had to face when considering the farm income problem. Therefore, we offer a brief but systematic review of the empirical literature on the farm problem since the seminal Gardner's paper of 1992. Taking into consideration the state of the art, we use data for the European countries from EU-SILC (Statistics on Income and Living Conditions) survey for the period 2005 - 2015 to carry out an empirical evaluation of the farm income problem in the European Union using a longitudinal panel approach to estimation and considering alternative definitions of the group of farm households. Similar to previous studies we don't find a strong evidence for the farm income problem in the European Union. The only exception is the group Central Eastern countries, where farm households are poorer that the rest of the population but only when they are defined according to a broad definition. Conversely, families mainly relying on farming as a source of income (narrow definition of agricultural households) show income levels similar to the rest of the population both at the EU level and across different geographic areas.