Skip to main content
SpringerLink
Log in

Farm Household Microsimulation Modelling: Viability

  • Chapter
  • First Online:
Farm-Level Microsimulation Modelling

Abstract

Farm incomes exist within a household situation, where there may be alternative income sources and different household members. In this chapter, we link farm survey data with household survey data and assess the income situation in households. Combining a farm and household microsimulation model, we consider the differential impact of the economic crisis in Ireland on the farm and non-farm households. While much of the literature has focused on measures of gross income, we compare in this chapter the structure of net income, which is closer to a truer measure of welfare than a gross-based income measure. We utilise statistically matching methods to combine the farm survey data with a household survey dataset and utilise the tax-transfer model to simulate net household incomes. The result is a static microsimulation model with a farm household unit of analysis. Our analysis highlights the sensitivity of the farm viability measure to differences in definition. We note in particular that utilising net income, a truer measure of welfare results in lower viability rates than the gross measure. It opens the debate as to whether we should start to incorporate the data necessary to measure and model net income in farm datasets.

Co-authored with Ricky Conneely, Simon Devisme and Mary Ryan.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 129.00
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 129.00
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Adelaja, S., Lake, M. B., & Pennington, S. (2004). Agricultural viability in the State of Michigan. Presentation at Michigan Land Use Summit, Michigan State University, February 2004.

    Google Scholar 

  • Aggelopoulos, S., Samathrakis, V., & Theocharopoulos, A. (2007). Modelling determinants of the financial viability of farms. Research Journal of Agriculture and Biological Sciences, 3(6), 896–901.

    Google Scholar 

  • Argilés, J. M. (2001). Accounting information and the prediction of farm non-viability. The European Accounting Review, 10(1), 73–105.

    Article  Google Scholar 

  • Atkinson, A. B. (1983). The economics of inequality (Vol. 2). Oxford: Clarendon Press.

    Google Scholar 

  • Atkinson, A. B. (1998). Poverty in Europe. Oxford: Blackwell.

    Google Scholar 

  • Atkinson, A. B., Rainwater, L., & Smeeding, T. M. (1995). Income distribution in OECD countries: Evidence from the Luxembourg Income Study.

    Google Scholar 

  • Bacon, C. (2005). Confronting the coffee crisis: Can fair trade, organic, and speciality coffees reduce small-scale farmer vulnerability in Northern Nicaragua? World Development, 33(3), 497–511.

    Article  Google Scholar 

  • Barr, N. (1998). The economic of the welfare state (3rd ed.). Oxford Press: Oxford.

    Google Scholar 

  • Barnes, A. P., Hansson, H. H., Manevska, T. G., Shrestha, S., & Thomson, S. G. (2014). The influence of diversification on short term and long-term viability in the Scottish and Swedish agricultural sector. Paper presented at the EAEE 2014 congress, Ljubljana, Slovenia, 2014.

    Google Scholar 

  • Barnes, A., Toma, L., Hall, C., & Willock, J. (2007). Implementing the action programme for nitrate vulnerable zones in Scotland: Farming practices and awareness. Edinburgh, UK: The Scottish Government.

    Google Scholar 

  • Brown, J. P., Goetz, S. J., & Fleming, D. A. (2012). Multifunctional agriculture and farm viability in the United States. Presented at Agriculture and Applied Economics Association Annual Meeting, Washington.

    Google Scholar 

  • Cocciarelli, S., Smalley, S., & Hamm, M. (2011). Farm viability and development: Michigan good food work group report no. 4 of 5. In K. Colosanti (Ed.) East Lansing, MI: C.S. Mott Group for sustainable food systems at Michigan State University.

    Google Scholar 

  • Commins, P. (1985). Continuity and change on the land. An Irish Quarterly Review, 74(295), 252–266.

    Google Scholar 

  • Controller, & Auditor General. (2014). Report on the Accounts of the Public Services 2013: Farm Assist. Available at: http://www.audgen.gov.ie/viewdoc.asp?fn=/documents/annualreports/2013/Report/En/ReportIndex.htm.

  • Cousins, B., & Scoones, I. (2010). Contested paradigms of ‘viability’ in redistributive land reform: Perspectives from Southern Africa. The Journal of Peasant Studies, 37(1), 31–66.

    Article  Google Scholar 

  • DAFM. (2012). Factsheet on Irish Agriculture. Department of Agriculture, Food and Marine. Available at: https://www.agriculture.gov.ie/media/migration/publications/2012/FactSheetIrishAgriculture150113.pdf. Accessed March 31, 2015.

  • Decoster, A., De Rock, B., De Swerdt, K., Flannery, D., Loughrey, J., O’Donoghue, C., & Verwerft, D. (2007). Comparative analysis of different techniques to impute expenditures into an income data set. Mimeo.

    Google Scholar 

  • D’Orazio, M., Di Zio, M., & Scanu, M. (2006). Statistical matching: Theory and practice. Chichester: Wiley.

    Google Scholar 

  • Easterlin, R. A. (1995). Will raising incomes of all increase the happiness of all? Journal of Economic Behaviour and Organisation, 27, 35–47.

    Article  Google Scholar 

  • European Court of Auditors. (2003). Special Report No 14/2003 on the measurement of farm incomes by the Commission Article 33(1)(b) of the EC Treaty. Official Journal of the European Union, Brussels.

    Google Scholar 

  • Frawley, J. P., & Commins, P. (1996). The changing structure of Irish farming: Trends and prospects. Rural Economy Research Series No. 1, Sandymount.

    Google Scholar 

  • Fuller, A. M. (1990). From part-time farming to pluriactivity: A decade of change in rural europe. Journal of Rural Studies, 6(4), 361–373.

    Article  Google Scholar 

  • Haase, T., & Pratschke, J. (2005). Deprivation and its spatial articulation in the Republic of Ireland: New measures of deprivation based on the census of population, 1991, 1996, and 2002. Dublin: Pobal.

    Google Scholar 

  • Healy, A. (2014). Two out of three farms need off-farm income to survive. Irish Times, September 2014. Accessed at: http://www.irishtimes.com/business/agribusiness-and-food/two-out-of-three-farms-need-off-farm-income-to-survive-1.1932587. Accessed March 23, 2015.

  • Healy, A. (2015). New national farm organisation to launch in February. Irish Times, January 2015, Accessed at: http://www.irishtimes.com/news/ireland/irish-news/new-national-farm-organisation-to-launch-in-february-1.2072379. Accessed March 23, 2015.

  • Hennessy, T. C., & Rehman, T. (2007). An investigation into factors affecting the occupational choices of nominated farm heirs in Ireland. Journal of Agricultural Economics, 58(1), 61–75.

    Google Scholar 

  • Hennessy, T., & Rehman, T. (2008). Assessing the impact of the ‘decoupling’ reform of the common agricultural policy on Irish farmers’ off-farm labour market participation decisions. Journal of Agricultural Economics, 59(1), 41–56.

    Article  Google Scholar 

  • Hennessy, T., Shresthra, S., & Farrell, M. (2008). Quantifying the viability of farming in Ireland: Can decoupling address the regional imbalances. Irish Geography, 41(1), 29–47.

    Article  Google Scholar 

  • Hill, B. (1999). Farm incomes, wealth and agricultural policy. Aldershot: Ashgate.

    Google Scholar 

  • Hill, B. (2000). Farm incomes, wealth and agricultural policy (3rd ed.). Ashgate Publishing Limited.

    Google Scholar 

  • Hill, B. (2008). Using the Wye Group Handbook to develop EU statistics on the incomes of agricultural households. Paper presented at WYE city group meeting, York, April 2008.

    Google Scholar 

  • Howley, P., Buckley, C., O’Donoghue, C., & Ryan, M. (2014). Explaining the economic ‘irrationality’ of farmers’ land use behaviour: The role of productivist attitudes and non-pecuniary benefits. Ecological Economics, 109, 186–193.

    Article  Google Scholar 

  • Jenkins, S. P., & Cowell, F. A. (1994). Parametric equivalence scales and scale relativities. The Economic Journal, 104, 891–900.

    Google Scholar 

  • Joint Labour Committee. (2010). Employment Regulation Order, Agricultural Workers Joint Labour Committee. Statutory Instruments, 164/2010.

    Google Scholar 

  • Kahneman, D., & Krueger, A. B. (2006). Developments in the measurement of subjective well-being. Journal of Economic Perspectives, 20(1), 3–24.

    Article  Google Scholar 

  • Li, J., O’Donoghue, C., Loughrey, J., & Harding, A. (2014). Static models. In Handbook of microsimulation modelling (pp. 47–75). Emerald Group Publishing Limited.

    Google Scholar 

  • Ligon, E., & Schechter, L. (2003). Measuring vulnerability. The Economic Journal, 113(486), 95–102.

    Article  Google Scholar 

  • Matus, S. L., & Paloma, S. G. (2012). Farm viability of (semi) subsistence smallholders in Sierra Leone. African Journal of Agricultural and Resource Economics, 9(3), 165–182.

    Google Scholar 

  • Meert, H., Van Huylenbroeck, G., Vernimmen, T., Bourgeois, M., & Van Hecke, E. (2005). Farm household survival strategies and diversification on marginal farms. Journal of Rural Studies, 21(1), 81–97.

    Google Scholar 

  • Miceikiene, A., Savickiene, J., & Petkute, E. (2015). Tendencies in variation of economic viability of farms in Lithuania. European Scientific Journal, 11(4), 95–109.

    Google Scholar 

  • Moran, C. (2014). Only 35% of farms economically viable last year. Agriland, September 2014, Accessed at: http://www.agriland.ie/farming-news/35-farms-economically-viable-2013/. Accessed March 23, 2015.

  • Moxnes Jervell, A. (1999). Changing patterns of family farming and pluriactivity. Sociologia Ruralis, 39(1), 110–116.

    Article  Google Scholar 

  • Odening, M. (1996). Estimating viability and competitiveness of farms in transformation countries-concepts, indicators, and difficulties. Zeitschrift fur Auslandische Landwirtschaft, 35(1), 28–49.

    Google Scholar 

  • Phimister, E., Roberts, D., & Gilbert, A. (2004). The dynamics of farm incomes: Panel data analysis using the farm accounts survey. Journal of Agricultural Economics, 55(2), 197–220.

    Article  Google Scholar 

  • Phimister, E., & Roberts, D. (2006). The effect of off-farm work on the intensity of agricultural production. Environmental and Resource Economics, 34, 493–515.

    Article  Google Scholar 

  • Rodgers, W. L. (1984). An evaluation of statistical matching. Journal of Business & Economic Statistics, 2(1), 91–102.

    Google Scholar 

  • Salant, P., Smale, M., & Saupe, W. (1986). Farm viability: Results of the USDA family farm surveys, USDA: Economic research service, rural development report no. 60.

    Google Scholar 

  • Savickiene, J., Miceikiene, A., & Jurgelaitiene, L. (2015). Assessment of economic viability in agriculture. Local versus global, 411.

    Google Scholar 

  • Scott, J. (2001). The Nova Scotia genuine price index soils and agriculture accounts—Farm viability and economic capacity in Nova Scotia. 1st Data release: Kings County Genuine Progress Index.

    Google Scholar 

  • Slavickiene, A., & Savickiene, J. (2014). Comparative analysis of farm economic viability assessment methodologies. European Scientific Journal, 10(7), 130–150.

    Google Scholar 

  • Smale, M., Saupe, W. E., & Salant, P. (1986). Farm family characteristics and the viability of farm households in Wisconsin, Mississippi, and Tennessee. Agricultural Economics Research, 38(2), 11–27.

    Google Scholar 

  • Vanclay, F. (2004). Social principles for agricultural extension to assist in the promotion of natural resource management. Australian Journal of Experimental Agriculture, 44, 213–222.

    Article  Google Scholar 

  • Vrolijk, H. C. J., de Bont, C. J. A. M., Blokland, P. W., & Soboh, R. A. M. E. (2010). Farm viability in the European Union: Assessment of the impact of changes in farm payments. LEI, Part of Wageningen UR, The Hague.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Rural Economy and Development Programme, Athenry, Galway, Ireland

    Cathal O’Donoghue

Authors
  1. Cathal O’Donoghue
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Cathal O’Donoghue .

Rights and permissions

Reprints and permissions

Copyright information

© 2017 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

O’Donoghue, C. (2017). Farm Household Microsimulation Modelling: Viability. In: Farm-Level Microsimulation Modelling. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63979-6_11

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-63979-6_11

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-319-63978-9

  • Online ISBN: 978-3-319-63979-6

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation