OFF-FARM LABOR AND THE STRUCTURE OF U.S. AGRICULTURE: THE CASE OF CORN/SOYBEAN FARMS

Richard F. Nehring, Jorge Fernandez-Cornejo and David E. Banker

No 19763, 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: While the growing importance of off-farm earnings suggests large benefits accrue to farmers from efforts to expand off-farm income opportunities, survival still depends on greater efficiency. To comprehensively gauge the economic health of farm operator households we interpret off-farm income as an output along with corn, soybeans, livestock, and other crops. To accomplish this task we use two related methodologies. First, using 2000 data, we setup a multiactivity cost function to analyze labor allocation decisions within the farm operator household and also to estimate returns to scale and scope. Second, using 1996-2000 data, we follow an input distance function approach to estimate returns to scale, technical progress, cost economies, and technical efficiency--and compare the relative performance of farm operator households with and without off-farm wages and salaries. Our preliminary results suggest that over our sample period, scale economies are a primary factor driving up farm operator household size and decreasing the competitiveness of small farm operator households in the base farm operator household model where off-farm income is constrained to zero. But small farm operator households appear to achieve efficiency levels more comparable to larger farm operator households when off-farm income is accommodated. The evidence therefore suggests that while short-falls in these productivity components are decreasing the competitiveness of small farm operator households as agricultural structure changes, corn/soybean farm operator households have partially adapted to such pressures by increasing off-farm income and, therefore, achieving economies of scope.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 27
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/19763/files/sp02fe03.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea02:19763

DOI: 10.22004/ag.econ.19763

Access Statistics for this paper

More papers in 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().