Transcript Chapter IX THE AGRICULTURAL HOUSEHOLD – CONCEPTS AND DEFINITIONS        IX.1 Definition of the household … IX.2 Households of different sizes and compositions IX.3The rural and.

Chapter IX
THE AGRICULTURAL HOUSEHOLD –
CONCEPTS AND DEFINITIONS
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IX.1 Definition of the household …
IX.2 Households of different sizes and
compositions
IX.3The rural and urban household enterprise
IX.4 Definition of the agricultural householdfirm (enterprise)
IX.5 Households containing hired labour
IX.6 Relevance for the Less and More
Developed Countries and formerly socialised
agricultures
IX.7 Typologies of farm-households
Key issues
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Household is a major form of institutional unit
and a policy-relevant unit of living
Key issues
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Definition of a household
Classification of households into agricultural and
other groups
IX.1 Definition of the household
appropriate to accounting and statistics
SNA/ESA definitions (sector)
 A small group of persons who share the same
living accommodation, who pool some, or all,
of their income and wealth and who consume
certain types of goods and services
collectively, mainly housing and food. [The
criteria of the existence of family or emotional
ties may be added].
Household definition ctd.
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Microeconomic approach
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Household budget surveys (varies in EU)
Canberra Group recommendations (various
household concepts – dwelling, housekeeping
unit, unattached individuals, income units etc.
Handbook conclusion
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This handbook recognizes that a flexible but
transparent approach should be taken to the
definition of a household. While income
measurement on the basis of the complete
dwelling household should be undertaken to
facilitate comparisons, both internationally and
with national data sources, data should also he
available to allow the application of the concept
of the single budget household whicn in some
circumstances may be preferable
IX.2
Households of different
sizes and compositions
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Comparisons undermined by differences in
household composition
Comparisons of same compositions
restricting
Equivalence scales may be used to express
households in Consumer Units
Scales can vary between countries
Household size ctd.
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Results should be calculated per household, per
household member, per CU
Conclusion
This handbook recognizes that both of these
practices (the calculation of income per
household member and per consumer unit, and
the use of national equivalence scales) should
be followed. Details of Equivalence Scales
should be made available as meta-data.
IX.3
The rural and urban
household enterprise
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Links with rural definition (Part I)
Only a small fraction of rural households are
likely to be agricultural
Residence on a farm is not a suitable
criterion for selecting agricultural household
(farm-living non-farmers, and urban-living
farmers)
IX.4
Definition of the
agricultural household-firm
(enterprise) and those belonging
to other socio-professional
groups
Criteria for classification
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Income dependency, or labour input, or both
Household or individual basis
Broad or narrow definitions
De minimis levels
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Income in kind (hobby activity / subsistence
production)
Cash income
Farm size
Practicalities of classification
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System based on reference person more
practical than on the whole household
Consequences of income variation over time
– need for short-term stability
Shrinking size of agricultural household
sector over time
Conclusion
The handbook recognizes that data should be
available to develop estimates of income for
households ranging from those narrowly
defined based on the main income of the
household, suitably smoothed to take into
account the year-to-year variation, for which
averaging over three years is advised, to
households that earn any income from selfemployed farming activity.
Conclusion
The handbook recognizes that data should be
available to develop estimates of income for
households ranging from those narrowly
defined based on the main income of the
household, suitably smoothed to take into
account the year-to-year variation, for which
averaging over three years is advised, to
households that earn any income from selfemployed farming activity.
Where it is not possible to identify
households with main income from self
employed farming activity, the
handbook recognizes the use of a
reference person system, where this
person is normally the main income
earner. Studies should be undertaken
to assess the significance of adopting
alternative bases of classification.
Choice of other groups for
comparison
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National averages contain predominantly
household of dependent workers and many
single-person household (young, widowed
etc.)
Income of farm households a mix of factor
rewards
Interest in comparisons with other small
business operators
Conclusions on comparisons
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This handbook recognizes that steps should be
taken to avoid misrepresentations when drawing
comparisons between the income situation of
agricultural households and other socioprofessional groups. At the least, this should
include income comparisons per household
member and per Consumer Unit.
IX.5 Households containing hired labour
working in agriculture
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Agricultural households are traditionally
headed by self-employed farmers
Hired workers not target of agric. policy
Hired workers are a small fraction in many
countries (not UK, France)
Many family farm corporations can be
treated as quasi self-employed households
Great increase in significance as result of
enlargement of EU (bring in large units)
Conclusions
The income situation of the households of
hired agricultural workers should be
assessed as a separate and
supplementary exercise (a
recommendation to be taken with that of
the next section). An ability to analyse by
the type of business on which they are
employed should be incorporated (family
farm, corporate farm etc.).
This handbook recognises that the
income situation of the households of
hired agricultural workers on all largescale agricultural units should be
assessed as a separate and
supplementary exercise, including a
breakdown of the type of unit on which
they are found and the forms of income
they receive (wages, profit share etc.)
IX.7
Typologies of farmhouseholds
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Examples of typologies
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Eurostat IAHS – broad/narroww/marginal
ERS-USDA farm typology (USA)
ISMEA (Italy)
Impact on numbers of agricultural
households and income levels of subgroups
ERS-USDA farm typology
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Limited resource
Retirement
Residential/lifestyle
Farming occupation/lower sales
Farming occupation/higher sales
Large family farms
Very large family farms
Non-family farms
Conclusion
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The handbook recognises the value of the
typologies of agricultural households that
reflect the needs of users and encourages
their development. The basis of the
typology should be flexible so that
different needs can be met. Consideration
should be given to the international
application of classification based on the
USDA-ERS.