Savings of farmers: A cross-section analysis

Y. Leon and P. Rainelli

European Review of Agricultural Economics, 1976, vol. 3, issue 4, 501-522

Abstract: The concept of residual savings is not very realistic; saving should rather be considered as the result of deliberate action. This observation, valid for the majority of households, is even more relevant for farmers and, generally, for entrepreneurs who allocate an important share of their income to savings. For this reason the financial behaviour of farmers should be examined in relation to savings rather than to consumption. This article presents some results derived from studies based on French and Swiss farm accounts which included both the household and the farming business. The results indicate that: a) the incidence of saving depends essentially on the level of income, with non-farm income exerting a marked influence on small farms; b) the incidence of saving is more directly related to gross income than to net income after depreciation; c) old farmers save less than young farmers; d) after a certain stage, a greater degree of owned capital leads to a lower level of saving.

Date: 1976
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