167

PART T I M E FARMING- IMPLICATIONS FOR F A R M FAMILY INCOME

Nigel Robson, Ruth Gasson and Berkeley Hill*

The Common Agricultural Policy has been more successful at securing food supplies than at providing adequate incomes for small farmers. Among proposals for resolving the problem, part time furming is a promising option. T o date, agricultural policy has at best ignored farms below (he 'full time' threshold, at worst discriminated against them. The new Agricultural Structures policy embodies a more positive approach, however. Robson's paper calls for better information on farm households with other gainful activities. Statistics f rom the.1983 Farm Structure Survey provide insight into the nature and extent of parr time farming in the European Communi f y .

Neglect of part time farming in the U K up to now may have sremmed f r o m its perceived irrelevance fo r agricultural policy. Now that ii i s being viewed in a more favourable light, policy makers need t o be appraised o f the facts. Currently about one third of main agricultural holdings in England and Wales are part time farms in the sense ihat farmer or spouse combines another paid job with farming. Casson's paper explores the nature of these other jobs and features o f their distribution. Following trends in other developed countries, non-farm activities are becoming increasingly important for U K farming families.

Growth in part time farming has obvious implications fo r income .support, widely agreed to be the fundamental objective of agricultural policy in western Europe. Existing farm income measures are not adequate for assessing the extent of the income problem in agriculture. Data f rom the Inland Revenue's Survey of Personal Incomes and the Wye College part time farming survey fill some o f the gaps left in official measurements. Non-farming earnings, pensions and investment income contribute significantly to farm household incomes. A majority of part time farming families in England and Wales make more f rom other sources than f r o m furming. Although average incomes of part time farmers may exceed [hose of full timers, Hill's paper identifies a section of part time farming families with inadequate incomes from allsoirrces.

Introduction (Ruth Gasson, Wye College) According to the OECD study published in 1978, part time farming has taken on such proportions in the world's developed countries that it can no longer be ignored. The U K has been slower than manv of its neighbours to grasp the ' Address f o r corrcspondcncc, Dr Ruth Gasson. Department of Agricultural Economics. Wye

Ctrllcgc. Wyc. Ashford. KcntTN25 5AH

168 NIGEL ROBSON. RUTH GASSON AND BERKELEY HILL

significance of the phenomenon which is still associated in many minds with non-viable holdings. Now, however, it is being mooted as a possible solution to the looming problems of production surpluses and falling farm incomes and as a means of ameliorating the impact of modern farming practices on rural employment, communities and the environment. The time was therefore opportune for the Agricultural Economics Society to discuss part time farming, a subject last given a good airing by the late Professor Ashton and Dr Cracknell in a paper to the Society in 1961.

A one day conference was held in December 1985. Nigel Robson set the scene by describing trends in European agriculture. Against the background of mounting surpluses, downward pressure on farm incomes and increasing regional disparities, part time farming seems to be one of the few real options. The door is therefore open for better statistics and more research into the phenomenon of farm households with other gainful activities. While presenting data from the 1983 EC Farm Structure Survey, Robson is highly critical of part time farming research carried out by individual countries, drawing particular attention to lack of agreement on definitions and non- comparability of results. He finds that the UK is lagging far behind other countries, especially West Germany and France.

Ruth Gasson argues that this neglect can be attributed to the perceived irrelevance of part time farming for goals of increasing food production, greater self sufficiency and improved productivity which have dominated UK agricultural policy since the Second World War. With income and welfare goals coming to the fore, it makes better sense to define part time farming in terms of the existence of another gainful activity for the farm household. On this count part time farming in Britain is neither insignificant nor confined to non-viable holdings. Data from a Wye College survey are presented in an attempt to f i l l the gap which Robson has identified.

Robson also calls for the systematic collection of better income statistics and Berkeley Hill develops this theme. He examines existing income measures and their uses and concludes that more detailed analysis of farm family incomes from all sources is urgently needed. His analysis of farm household incomes from the Inland Revenue’s Survey of Personal Incomes and the Wye College Survey illustrates the argument.

The main thrust of these papers is that part time farming is an important but neglected component of the agricultural structure of developed countries. Its relevance for the goals of a reformed agricultural policy highlights the need for better information, and all three authors give most weight to their empirical results. In a one day conference it was impossible to do more than draw attention to salient issues and sketch the nature and extent of part time farming in broad outline. This selection of papers gives most weight to the relevance of part time farming for farm household incomes. This is not to say that other aspects, including its impact on rural employment, the structure of rural communities and the environment, are not equally important in their implications.

The Changing Role of Part Time Farming in the Structure of Agriculture (Nigel

Trends in European Agriculture The essential problem of European agriculture is that the Common Agricultural policy is attempting to resolve two distinct problems with a single * Any opinions ex ressed in this paper are those of the author and are not to be understood as thc

Robson, Commission of the European Communities*)

official view orthe Commission of the EC.

THE CHANGING ROLE OF PARTTIME F A R M I N G I N THE STRUCTURE OF AGRICULTURE 169

policy instrument, that of guaranteed common prices with market support mechanisms. The problem of providing food for the 272 million people in t h e Community of Ten is more than resolved. The problem of an adequate standard of living for the small farmers who constitute the majority of the agricultural community is not. Indeed the small farms may now be relatively worse off vis u vis the large farms than was the case in the past.

Over the years, various proposals have been made to resolve the problem, starting with the Mansholt Plan in 1968 and including most recently the Commission Green Paper Perspectives f o r the Common Agricultural Policy (Commission, 1985a) and the memorandum on adjustments for the market for cereals (Commission, 1985b). Using drastic price cuts to bring markets back into equilibrium is almost excluded from the outset because of the size of cut necessary. Simulation with models suggests that in order to achieve something like the desired result in the cereal sector, prices would have to be reduced by around 20 per cent. Before milk quotas were proposed, an econometric study of supply response in that sector also indicated that price cuts of 20 to 25 per cent would be needed to achieve equilibrium. Apart from being politically unacceptable, they would strike hardest at the weakest farmers. Direct income support is another possibility. This is already being practised in the Less Favoured Areas and a more general application of this principle is discussed at some length in the Perspectives Green Paper.

Radical structural reform is also difficult to envisage unless very strong regional and social policies are developed. Already the CAP is extended and distorted for reasons which have little to do with the most efficient production of agricultural products but more to do with regional and social problems. The structure of European agriculture is not only outmoded but almost totally irrational in terms of social equity, since the good land is mainly in very large farms and the poor land is in small farms. In the absence of alternative investment, non-farm employment and overall economic support, the immediate consequence of radical structural reform would be rural depopulation. In some areas of the Community this would be on a massive scale, adding to the already substantial demand for jobs and houses in urban areas. Against this back round, part time farming in combination with an Outside Gainful Activity tOGA), is worth pursuing as a possible solution.

Policy and the Part Time Farmer To date, agricultural policy has at best ignored farms below a defined ‘full time’ threshold, at worst discriminated against them. The various UK grant schemes such as the Small Farmer Scheme and the Farm and Horticultural Development Scheme were aimed at ‘full time’ farms where farming was the main occupation and source of revenue (defined as at least half the working time on the farm and at least half the income derived from the farm). Up until the adoption of the new EC Structures Regulation in March 1985, an additional condition applied for having access to financial aid, namely that at the end of the development plan the farm had to achieve an income comparable to the non-farming population of the region. These conditions meant that it was almost impossible for a genuine part time farmer to benefit from the olicy (although paradoxically a ‘full time’ farmer with an outside activity could!y

When the new Structures Regulation was being drafted, reform was felt to be necessary for a number of reasons. Not only had the 1972 Structure Directives expired but the economic environment had changed radically. The growth of farm incomes had slowed down and regional disparities had increased. Farm development plans, which normally had the effect of expanding production,

NlCEL ROBSON 170

were increasingly inappropriate in the face of mounting surpluses. Besides this, the schemes for farmer retirement and land reallocation had fallen far short of expectations. The new Agricultural Structures policy has other priorities: -improvement or safeguarding of farm incomes, particularly of those in the

lower income bracket, and the improvement of living, working and production conditions;

-maintenance of employment in agriculture; -encouragement of productivity improvements which will not stimulate

production of additional surpluses; -intensification of efforts at regional level.

As regards on-farm investment aids, the new policy extends aid to a much wider range of farmers than heretofore, particularly those in the lower income bracket. The conditions for qualifying for aid have been simplified and, in particular, farmers are no longer required to show that they can achieve a fixed income target. In the Less Favoured Areas the provisions of Directive 7512681 EEC have been strengthened by means of improvements in the system of compensatory allowances, by increases in aid for tourist and craft activities and by more generous benefits for joint investment schemes by two or more farmers.

The relaxing of conditions applied in structural policy seems to be the beginning of a new political realism which has been much reinforced in the Perspectives Green Paper. In particular, it stresses the fact that agricultural policy and structural reform need to be integrated into the general economy of the region and that regional development needs to be pursued more vigorously. The financial imbalance which has developed is evident i f one considers that the European Regional Development Fund has resources equivalent to only 8 per cent of the European Agricultural Guidance and Guarantee Fund and the European Social Fund has only 7 per cent of the 1985 budget. Some reallocation of resources towards a more integrated programme is clearly both possible and necessary.

The Perspectives Green-Paper goes on to examine the whole question of income aids and the need for them in a situation of low and possibly declining farm incomes which strikes most forcefully at the smaller enterprise. It examines four options of action, namely, -a pre-pension for farmers of 55 years and older; -a structural approach; -a social approach which takes into consideration the total income of the

-a buying out approach. The third option is most relevant in the present context and the thinking behind it will be elaborated. The basic idea is that although structural change in agriculture should not be hampered, it has to be canalised in a way that avoids intolerable social pressures. As long as no alternative income and employment possibilities are available, an income aid acheme for farmers should help to avoid social hardship, thus attenuating adjustment pressures without, however, neutralising them completely. Such a system should be a last resort. It would therefore have to be highly selective (in other words concentrate on those who are really poor) and intervene only when other mechanisms of solidarity, especially the solidarity between members of the same household, have played the role one can reasonably expect them to play.

house hold;

T H E CHANGING ROLE O F PARTTIME FARMING IN T H E STRUCTURE O F A G R I C U L N R E 171

The total income of farmers (farm plus off-farm) would be compared to the comparable income (average gross wage income) at the regional level. Only those farmers could benefit from the aid whose total income would be x per cent or more below the comparable income. The difference between total income and the x per cent of the comparable income would be paid in the form of an income aid, after deducting a flat rate sum calculated for family members living in the farmhouse with OGAs. This sum should at least in some way represent their ‘benefits’ from living in the household but should not be so high as compared to their off farm incomes as to discourage the search for outside activities.

This somewhat radical proposal was received by farmers with less than full enthusiasm in discussions on the Green Paper. They distrusted direct income aids as ‘welfare’ and feared that such income support would isolate them from economic activity rather than integrate them into what could be, for many, a multiple activity. The subse uent document A Future for Community

with the Green Paper (Commission, 198%) noted that ‘Farmers in particular are fearful of being forced out of the mainstream of society, and they are anxious to take part in current developments in the technical, economic and social fields; they are ready to make their contributions to this process, and, while emphasising certain specific aspects peculiar to farming, look forward to growing integration into the rest of the economy’.

Community politicians and institutions, then, have expressed a positive attitude to dual economic activity by farmers as an important element of agricultural and rural policy reform. The door is now wide open for better statistics and more research into the phenomenon of farm households with outside gainful activities. On the first, the Statistical Office of the EC is already taking initiatives. On the second, the field is clear for more research and for co- ordination on definitions and analysis at the European level.

Agriculture: Commission guide 1 ines following the consultations in connection

Available Statistics on Part Time Farming

The phenomenon of part time farming in conjunction with an Outside Gainful Activity is much more widespread than most economists realise. This is partly due to poor statistics and partly to the fact that this is often considered as ‘farming on the fringe’ and therefore not ‘real’ farming. If one looks at the phenomenon at the European level, however, statistics do exist and they are improving rapidly. This is largely the result of the EC Farm Structure Surveys but much more work has been done on the topic in other countries, especially in Germany and France, than in the UK. As well as EC survey data which is described below, a study has recently been completed for the Commission which attempts to collect all existing data on Outside Gainful Activities (Commission, 1986).

The first problem encountered in any discussion of part time farming and outside revenues is that of definition. Part time farming is indeed a multi- dimensional activity. The farm can be classified as full time, part time or spare time, the farmer likewise and then there is the question of whether he or she has an OGA. The picture can be further complicated by including OGA’s of the spouse and/or other members of the family. Even the first three can produce several hundred permutations since there are full time farmers on part time farms (hidden unemployment) while ‘real’ full time farmers may also have OGA’s. There is a pressing need for a common definition.

NlGEL ROBSON 172

The EC Farm Structure Surveys produce comparable data across all Member States; other sources are frequently non-comparable. The EC data presented in this paper are from the 1983 Farm Structure Survey. Table 1 gives the proportion of farmers with OGAs by Member State. Variations can be explained in terms of average size of holding in each Member State and the relative availability of OGAs. Table 1 Country per cent of farmers Country per cent of farmers

Germany 43.1 United Kingdom 24.6 France 32.5 Ireland 24.9 Ttalv 29.4 Denmark 33.9

Proportion of Community Farmers with an Outside Gainful Activity in 1983.

with OGAs with OGAs

Neiherlands 19.3 Belgium 32.5 Luxembourg 18.9

Greece 39.5

Community ofTen 32.6

Source: Eurostat

This basic indicator can be analysed in great detail. Information on OGAs in the survey covers the holder, hisher spouse and members of the family. It can be further broken down by the holder’s time spent on the farm, by size of holding, by the age of the holder and by the agricultural area, the area owner- farmed as well as the total number of Annual Work Units. The OGA can also be analysed by seventeen types of farm and by nine economic size groups measured in ECU. It is clear that much detailed analysis is possible but one rapidly runs into large volumes of tables. To analyse Outside Gainful Activity by type of farm and by Member State plus the Community of Ten, for example, involves 187 tables!

Table 2 breaks down holdings by reference to the presence or absence of an OGA and the time the holder spends on the farm. From this table it is possible to obtain the distribution of holdings by full time, part time or s are time categories and the relationship of holding size to the pursuit of an 8 GA. For example, 47 per cent of holdings surveyed in Germany were spare time (defined as those where the holder worked less than 50 per cent of his time) and of those 75 per cent of holders (35/47 x 100) had another occupation. By contrast, in Italy 73 per cent of holdings fall into the spare time category but only 37 per cent of their occupiers had outside jobs. To put this in absolute terms, out of 6.3 million holdings in the Community, occupiers of 2.1 million have an Outside Gainful Activity. The data also shows whether this is the occupier’s principal or secondary occupation.

Table 2 Holders by Proportion of Normal Working Time Worked on the Farm and Presence or

Country Per cent of normal working time on the farm All Numberof

Absence of an Outside Gainful Activity, 1983

0>50 50>100 100 holders holders A B A B A E 000s

oer cent of holders D 3 5 4 11 8 5 5 2.9 2.2 4 2 2 i o o n 750 ~

F I NL

-~ ~~ ~~. .~ ~~

14.2 14.8 5.8 9.7 12.4 43.1 100.0 I,O?5 27.1 45.4 2.0 13.9 0.2 11.4 100.0 2,760 7.2 4.1 7.6 6.2 4.5 70.4 100.0 135

B 27.4 0.9 3.3 3.8 1.9 62.7 100.0 100 L 11.5 7.1 4.1 5.2 3.4 68.7 inn n 4

EUR-10 25.4 29.7 4.1 12.1 3.1 25.6 100.0 6,313 Souice: Eurostat A = with OGA B = without OGA

THE CHA NG lNG ROLE 0 F PA RT-TTM E FA RMTNG IN THE STRUCTURE OF AGRICULTURE 173

It would be interesting to know whether having an OGA is related to a particular type of farm, that is to say whether there is a tendency to combine certain farm enterprises with outside jobs. As can be seen from Table 3, holders with OGAs are more frequently found in those types of farming with lower labour requirements, for example cereals, vineyards, permanent crops and grazing livestock. As may be expected, they are much less prominent in activities with high labour requirements such as horticulture, field crops and in particular dairy farming. On the other hand cattle rearing and fattening and intensive livestock (pigs and poultry) seem to combine well with the demands of another occupation, since the percentages are the same for farmers with an OGA as for all farmers.

The EC Structure Surveys do not reveal the precise nature of the Outside Gainful Activity itself nor the revenue obtained from it. The 1983 Farm Structure Survey asked some questions about the nature of the outside activity in relation to a limited classification as shown Table 4. This question was addressed to both the holder and spouse.

Table 3 1983

Type of Farming and Existence of Outside Gainful Activities in the Community of Ten,

Type offnrming Holders wirh OGAs All holders per cenr per cent

Cereals 11.3 9.2 Field crops, other 12.7 12.6 Horticulture 1.7 2.1 Vineyards 11.6 9.7 Fruivpermanent crops, other 20.5 17.8 Cattle, dairying 6.8 11.2 Cattle, rearingfattening 4.0 4.0 Cattle, mixed 1.5 2.3 Grazing livestock, other 6.5 6.2 Pigs 0.8 0.7 Pigs and poultry, other 0.5 0.5 Horticulture and permanent crops 0.2 0.2 Fixed cropping, other 10.6 10.4 Partially dominant grazing livestock 2.5 3. I Fixed livestock, other 0.6 0.8 Field crops and grazing livestock 5.4 6.3 Crops-livestock, other 2.8 2.6

All types 100.0 100.0 Source: Eurostat

Table 4 Categories ofoutside Gainful Activities of Farm Occupiers in EEC Member States, 1983

Country Activities on the holding Activities off the holding All activities

tourism industry orher farm work fishing other craft forestry or

percent of holders wirh OGAs

D 1.4 2.7 3.8 2.1 3.3 86.7 100.0 F 1.5 4.7 40.3 10.1 2.1 41.3 100.0 I 0.1 2.0 0.7 20.8 0.R 75.6 100.0 NL B L 1.1 0.8 5.1 0.6 4.6 87.8 100.0 UK 5.9 1.4 7.5 18.5 2.4 64.3 100.0

~~~ .. .~ ~~

0.8 0.0 5.8 9.5 0.7 83.2 100.0 0.1 0.4 1.7 2.7 0.4 94.7 100.0

IRL 1.4 0.6 11.3 6.3 2.8 77.6 100.0 DK 0.0 0.0 0.0 7.8 0.8 91.4 100.0 GR 0.5 0.1 0.8 13.0 3.1 82.5 100.0

EUR-10 0.9 2.1 8.3 13.5 1.9 73.3 100.0 Source: Eurostat

NlGEL ROBSON 174

Research into published and unpublished data on the nature of the OGA shows that a much wider range of occupations is involved than was indicated by the 1983 Farm Structure Survey. This is confirmed by Table 4 which shows that 73 per cent of activities of the Community of Ten did nor fall into the classes specified. Some Member States collected more detailed information on this matter than others, so the results are rather heterogeneous. Full details of what has been collected will be published in the report prepared for the Commission. Meanwhile, Table 5 gives some brief indications of the wide range of other activities of part time farmers. These results need to be treated with great caution because not all countries are covered and because definitions and classifications are not necessarily uniform across the countries. Agricultural and forestry activities are included in some countries and not others and there is inevitably an arbitrary allocation of occupations in some cases.

Table 5 Nature of Outside Gainful Activities of Part Time Farmers Type of Activity Belgium France Germany Ireland Italy U K

1970 1979 1976 1978 1980 I983 percent of OGAA

Forestry, fishing, fish farms - 0.6 - - - \ not

Farm wage work Craftsmen self employed Small traders Large traders, industry and liberal professions Senior executives Middle executives Employees Blue collar workers Other

All activities * Some rnis-allocations probable

3.0 4.9

17.1

1 .o - - 61.7

12.3 -

100.0

7.0 6.8 8.2

2.3 2.1

22.1 - 40.7 9.6

100.0

?'

6.0' -

> - 1.0 j

17.0 -

22.0' - 100.0

9.2 - - 17.7

29.1

44.0 -

-

100.0

27,0 ) included

5.0 26.9

5 . 0 1 19.0

27.0 23.4

36.0 30.7

- - -

- -

100.0 100.0

If Table 5 indicates anything at all, i t is the pressing need for a common classification system! Apart from that, it suggests that except in the case of Italy, a small proportion of OGAs are in agnculture, 20 to 30 per cent are in salaried non-manual employment and 30 to 40 per cent in skilled or semi- skilled manual occupations, with varying proportions in small businesses and self employment. There is undoubtedly some confusion between industry- based and other types of classification scheme in certain countries.

The next question must be 'How much does the farmer earn from his OGA?' This immediately raises further complications as one has to decide whether the question covers farmers only, farmers and spouses or all members of the family who have OGAs. Again, the quality and quantity of information available varies greatly from country to country. The results obtained in the previously mentioned study are presented in such a miscellany of analysis that it is im ossible to combine them in a common framework. Some results from

The total revenue of part time farms in Denmark for 198213 was only 48 per cent of that on full time farms but half of it was obtained from OGAs. In Ireland, 78 per cent of the income on part time farms was from OGAs. Detailed information available for France indicates that 30 per cent of the total income of all farms came from non-farm activities and pensions in 1970 and that by 1981 this figure had risen to 42 per cent. The proportion of total income from OGAs in Germany in 1981/2 was 6 per cent for full time farms, 52 per cent for part time farms and 85 per cent for spare time farms. Incidentally it is

in B ividual countries, however, are worthy of note.

THENATURE AND EXTEhTOFPARTTIMEFARMING IN ENGLAND AND WALES 175

interesting to note that the total revenue of part time farms in Germany in that year was 14 per cent higher than that of full time farms while spare time farms had even higher incomes. The data show a clear tendency for total incomes of part time and spare time farms to rise while full time farm income is stable.

The general conclusion is that total earned income from farm and non-farm sources of part time farmers is high relative to full.time farmers and this is probably a major explanation for the growth of second occupations. Levels of farm and non-farm earnings are clearly related to the size of holding and to the proportion of time spent on and off the holding. Generally speaking, however, the income information is of poor quality and where available is often dated and from one-off surveys. The systematic collection of better income statistics should be the concern of policy makers since so many policies have either explicit or implicit income objectives.

Finally, it would be interesting to know whether part time farming combined with OGAs is a phase of transition for those entering farming or those leaving the industry. In addition, the motivation for adopting this way of life needs to be understood. From the evidence collected it seems as if the part time farm plus outside occupation is a stable situation which is likely to continue for long periods of time. Indeed, 95 per cent of part time farmers questioned in Ireland could not foresee themselves giving up farming and were well satisfied with their dual activity status. The primary motivating force would seem, from the limited evidence collected, to be economic necessity. In most cases, the farm produced an income which was inadequate for requirements and so an additional outside activity was seen as the best solution.

The Nature and Extent of Part Time Farming in England and Wales (Ruth Gasson, Wye College*) ‘Governments’ opinions on part time farming range from qualified favourable to strictly neutral and rather unfavourable, depending on whether the main aspects of part time farming do fit in or do not fit in with the general objectives of their agricultural policies . . . A better knowledge of the facts and of the broad implications for agricultural, social, rural development and environmental policies may induce decision makers in governments and farmers’ interest groups to define or to redefine their osition with respect to part time farming more

(OECD, 1978: 3) precisely to the bene P it of both the rural and the urban society.’

The Growing Relevance of Part T ime Farming As the OECD report suggests, official attitudes towards part time farming depend on whether it fits in with the general objectives of agricultural policy. Hitherto the United Kingdom, unlike many of the world’s highly developed countries, has not paid much attention to it. This neglect may owe less to the insignificance of part time farming in this country than to its perceived irrelevance for agricultural policy. During and after the Second World War, the small, part time holding could be dismissed as contributing little to the nation’s food production. When agricultural policy entered its next phase, the part time farmer may have been seen as a stumbling block in the drive for higher productivity, using resources wastefulIy and impeding progress towards an improved structure of large, full time farms. * I am grateful to the Ministry of Agriculture, Fisheries and Food who commissioned this study

and provided the sample, and to Berkeley Hill for his comments on an earlier draft of the paper. The views expressed here are nevertheless my own.

176 RUTH GASSON

At the present time, as Robson has indicated, dual job holding by farmers is being considered more positively as an important element in agricultural and rural olicy reform. According to the Perspectives Green Paper (Commission, 1985a5, ‘The growing importance of part time farming with gainful outside activities corrects to some extent the overall picture of low agricultural incomes’. Public concerns relating to agriculture are not confined exclusively to agriculture’s productive function but embrace preserving the environment and maintaining a rural-urban balance (Tracey, 1984). In this regard the Perspectives paper argues that ‘The Community must ensure . . . that the social fabric of rural regions is not destroyed by an accelerated departure of the agricultural workforce . . . The maintenance of a significant number of persons in agriculture is not, however incompatible with the development - which should be encouraged - whereby a part of their income is derived from non- agricultural sources’. Besides helping to stem rural depopulation, ‘ . . . most part time holdings can reasonably be regarded as making a valuable contribution to that variety of life which makes living in a highly industrialised society more rewarding’ (Ashton and Cracknell, 1961).

Concepts and Definitions Robson has drawn attention to &he sticky problem of definitions. Part time farming can be defined in terms of the holding, how the farmer spends his time or the existence of other paid work. A definition is chosen to serve a particular purpose. The National Farm Survey of 1941/3, for example, recorded where a farmer had another job, the inference being that he could not devote all his energies to food production. When the Small Farm Scheme was introduced, it became necessary to identify the viable smaller farm, holdings below the cut- off point of 275 standard man days being designated ‘non-viable part time farm businesses’. Since 1970 the agricultural census has recorded numbers of farmers, partners and directors under whole time and part time categories. Here a part time farmer is one who devotes less than forty hours a week to farming, an appropriate criterion for policy objectives concerning labour productivity. In their economic survey of Buckinghamshire agriculture, Thomas and Elms (1938) distinguished between full time, part time, spare time and hobby farmers on the basis of their reliance on farming for a living.

For EC Farm Structure Surveys, Member States are obliged to provide information on numbers of farmers and spouses who have other paid work in addition to their work on the holding. For purposes of assessing the income and welfare of farm families, this approach is a great improvement on definitions of part time farming based on the use of the occupier’s time or the sub-viable holding. It is an improvement on the Reading approach in that it takes account of paid work by spouses. Less satisfactory features of the definition currently used are that it applies at the level of the physical holding and not the farm business, excludes company farms, is limited to the activities of the ‘principal’ occupier if more than one and to farmers and their spouses who have other paid work in addition to their work on the holding. For income and welfare purposes it is the existence of another income source which is important, not the way household members allocate their time.

Ideally, if the concern is the extent to which agricultural holdings provide income and employment for farm families, all working members of the farm household who contribute to the family budget ought to be included in the definition. The farm household is the consumption unit, the social group with labour to deploy which is involved in making a living. A Wye College Workshop defined part time farming as ‘the practice of a farm based household in which one or more members are gainfully engaged in work other than, or in

THENATURE A N D EXTENTOFPARTTIME FARMING INENGLAND AND WALES 177

addition to, farming the family’s holding’ (Centre for European Agricultural Studies, 1977). The definition employed in the latest EC Structure Survey falls short of this comprehensive farm household approach.

Dismissive attitudes towards part time farming in the past may have followed from the way the subject was approached. Defining the part time holding as a non-viable business suggests that the part time farmer is a hopeless case. Definitions based on the use of the occupier’s time conjure up a picture of a dilettante dabbling at farming but not really committed to it. The current obsession with ‘diversification’ implies that movement into the part time farming category is all one way. Focusing instead on the household which combines farming with other paid work shows part time farming in a new and perhaps more favourable light.

Extent of Part Time Farming in England and Wales As part of the 1983 EC Structure Survey, the Ministry of Agriculture conducted a Labour Input Inquiry, by post, of a stratified random sample of agricultural holdings. The sample excluded minor holdings and those where the occupier was not a ‘natural person.’ One question concerned the activities of the occupier (or principal occupier) and spouse over the period June 1982,’ May 1983: ‘As well as farm work on the holding does he or she do any other paid work?’

A total of 52,600 holdings, 31 per cent of all holdings in England and Wales as defined for EC purposes, excluding those where the occupier was not a ‘natural person’, recorded an OGA for farmer or spouse. This was made up of 20 per cent for the farmer only, 5 per cent for the spouse only and 6 per cent for both. (Throughout this discussion, statistics refer to holdings with natural persons as heads. The level of part time farming on the 10,000 or so company farms is not known, but may be quite high).

Despite its relative neglect up to now, the level of part time farming in this country is neither insignificant nor out of line with that in other developed countries (see Robson, Table 1 and Arkleton Trust, 1985, Appendix 2). Holdings where the farmer or spouse have OGAs are predominantly but not invariably small. Some 40 per cent are rated below 4 European Size Units, in theory unlikely to keep one person fully occupied throughout the year. With increasing size of business, the percentage of holdings with OGAs declines but shows some tendency to rise again among the very largest farms (Table 6). Harrison (1975) also drew attention to this U-shaped distribution of part time farms.

Table 6

Sire of farm Holdings wirh OGAs OGA holdings as business in ESU Number Percenr per cent all holdings

Distribution of Holdings with OGAs by Size of Business in ESU. England and Wales, 1983

Under4 4 - 8 8 - 1 6 I6 - 40 40 - 100 100 and ovei

21,134 8,914 7.101 7:744 5,278 2,419

30.2 17.0 13.5 14.7 10.0 4.6

48.0 44.8 32.3 20.1 15.1 19.8

All holdings 52,600 100.0 30.7 Source: Ministry of Agriculture, Fisheries and Food provisional results of 1983 Labour Input

Inquiry. Although many are small, OGA holdings are estimated to occupy 2 million

hectares, about one sixth of the total agricultural area of England and Wales. More than half the holdings specialise in cattle and sheep production. Dairying

R U T H GASSON I78

is difficult to combine with other employment, as Robson has noted, but the remaining types of farming appear in roughly the same proportions as on full time farms.

Combining farming with a second job is most common in the south east of England, least so in the north, north west and Wales (Table 7). This suggests that part time farming owes more to a prosperous regional economy than to a concentration of low income farms. The unique influence of London on farmer's activities has been described elsewhere (see, for instance, Harrison, 1966; Gasson, 1966). Harrison (1975) estimated that 37 per cent of England's part time farmers, but only 23 per cent of its farms, were located within a 60 mile radius of London.

Table 7 Distribution of Holdings with OGAs by Standard Region. England and Wales, 1983 _ _ ~ ~~

Standard Region Holdings with OGAs OGA holdings ns

North 3,035 5.8 27.1 YorkshireiHumberside 4.558 8.7 29.1 East Midlands 4,670 8.9 29.8 East Anglia 3,808 7.3 32.5 South East 8,959 17. I 38.8 South West 10,995 21 .o 32.4 West Midlands 5.561 10.6 30.0 North West 3.178 6.0 26.3 Wales 7 676 14.6 26.2

England & Wales 52.440 100.0 30.7 Source:

Number Per cent per cent all iioklings

Ministry of Agriculture, Fisheries & Food provisional results of I983 Labour Input Inquiry.

Information gathered in the Labour Input Inquiry showed the extent of part time farming in England and Wales according to a restricted definition and its distribution by region, farm size and type. A second stage survey, carried out at Wye College", was intended to update and supplement this information, its terms of reference being to: (a) (b) (c)

identify the nature of the main OGAs of farm families, measure their importance to the total income of the family, and measure, as far as possible, differences in (a) and (b) by region and farm size.

The Ministry provided a random sample of 700 holdings recording an OGA for farmer or spouse in the 1983 Labour Input Inquiry, stratified by Standard Region and size of business, together with a replacement sample. Farms were visited during 1984 and the farmer or spouse interviewed using a semi- structured questionnaire. Over 85 per cent of those approached in the main sample agreed to take part, no size group or region achieving less than an 81 per cent response. Results have been raised to national level,

The Nature of Other Gainful Activites Robson has drawn attention to the vast range of occupations which people manage to combine with farming. For convenience of the present enquiry they have been classified according to whether they are pursued on or off the holding, with sub-divisions within each category.

Activities occurring off the holding have been divided into work on other farms and off farm work. The second, easily the largest category, has been broken down further into business, professional, other white collar and manual '* Fordetailsofthemethodandresultsof thisstudy,seeGasson( 1986).

THE NATURE AND EXTENTOF P A R T T I M E FARMING IN ENGLAND A N D WALES 179

jobs. Work on other farms has been sub-divided into agricultural contracting, wage work on other farms and management, the last including those earning a fee or salary for management advice and also those who are partners or directors in other, quite separate farm businesses. Work taking place on the holding has been divided into farm based ente rises and home businesses. Farm bused enterprises are activities other than ‘F arm production which make use of resources like land, produce or a farm setting. Providing accommodation covers the letting of caravan sites and self catering units as well as bed-and- breakfast enterprises. Activities adding value to farm products and those catering for recreational and sporting interests are also included here. Home businesses are also run from the holding but do not depend on a farm base. Examples are activities camed out in a home workshop or office (crafts, machinery repairs, designing and building farm trailers) and agencies run from the farm. The growing band of private agricultural consultants come into this category as do local agents and organisers of ATB, CLA and so on.

Table 8 shows that off farm work accounts for nearly as many OGA holdings as the other three categories put together; elsewhere in the European Community off farm employment is more important still. White collar and manual jobs head the list, followed by professions and ‘home workshop’ activities. Farm based recreation and tourism and adding value to farm products are much less important, but more significant here than elsewhere in the Community, according to Robson. Farm wage work features less prominently in England and Wales today than on small holdings in the late 1950s (Ashton and Cracknell, 1961) or on Scotland’s ‘Grey Zone’ holdings in the mid-1960s (Dunn, 1969).

Table 8 Estimated Numbers of Holdings with Household Members involved in Other gainful Activities in England and Wales, 1983

Type of acrivity Numbers* TypeofActivrty Numbers

Business 6,781 b t Providing accommodation 4,489 c Profession 7,086 b Adding value to products 3,823 c Other white collar 11,109 b Sporting and recreation 3,125 c Manual 9,420 b

All farm based 1 1,437 b All off farm work 34,396 a Managing another farm 2,582 c Home workshop 7,090 b

Farm wage work 4,957 c

All work on other farms 12.468 b All home businesses 12,085 b

Agncultural contracting 4,929 c Farm agent 4,995 c

Source: Wye College survey * Holdingscan appear more than once in the table t 95 per cent confidence limits for this estimate are (a) within 10 per cent of the estimate, (b) within 20

per cent or (c) within 33 percent.

Off farm employment and home businesses are typical of the smaller farms, though not confined to them, while work on other farms and farm based enterprises are more characteristic of larger holdings (Table 9). Activities particularly associated with holdings below 100 smds are professional work (for farmers), other white collar jobs and ‘home workshop’ enterprises. Most likely to be found on holdings above 500 smds are professional work (for spouses), managing another farm business, agricultural contracting and providing tourist accommodation. Fewer than 5 per cent of all OGA holdings below 100 smds but more than 20 per cent above 500 smds were providing accommodation in some

180 RUTHGASSON

form. These relationships may help to account for differences in the distribution of OGAs between the UK and other Member States which can be seen in Table 4 (Robson’s).

Table 9 Proportion of OGA Holdings involved in Categories of Work in England and Wales, 1983 by Size of Holding. Raised Results

Size ofhoiding Work on other Farm based in smds Offfarm work farms enrerprise Home Business

per cent of OGA holdings involved ~~~ ~~ ~

Under 100 72.9 15.8 16.6 25.7 100 to 249 58.4 30.9 22.2 23.8 250 to 499 60.3 31.5 25.7 20.2 500 and over 53.7 37.2 36.7 15.4

All sizes 65.7* 23.8’ 21.8’ 23.1 Source: Wye College survey * Association between this activity and size of holding is significant at 1 per cent level of Chi

square.

Trends in Part Time Farming As Harrison (1975) has pointed out, ‘There is a tendency, no doubt natural, among agricultural economists and others dealing directly and mainly with farmers, to assume that farming will tend to rank hi her in order of priority than other sources of earned income’. The bulk of evi dp ence suggests that this is not so. For one thing, some 70 per cent of farmers with a second job are self employed and only 30 per cent employed by others. This indicates that on the majority of part time farms there is a second business competing for funds, management ex ertise and the proprietor’s presence as a supervisor or worker (Harrison, 19’75f*

Previous studies in England and Wales (Ashton & Cracknell, 1961; Harrison, 1975; Gasson, 1983), Scotland (Scola, 1961; Dunn, 1969; Wagstaff, 1970), Northern Ireland (Moss, 1980) and the Irish Republic (Higgins, 1983) have suggested a general tendency for part time farmers to work full time in the other job and to regard it as their main activity. The current survey confirmed these trends. It showed, too, that for 45 per cent of farmers on OGA holdings, the other job had come first chronologically and that, for almost 40 per cent, farming had never been more than a subsidiary occupation. It also revealed, in line with other studies, that the majority of households with OGAs were mainly dependent on the other activity for their livelihood.

A number of countries distinguish between Class I and Class 11 part time farms. In Class I, the farmer or household spends more than half the working time on the farm andor more than half the household income is earned from farming, Class I1 households being those mainly dependent on other sources of income and employment. In the Wye College sample, Class I1 was further divided into Class IIa, reporting a positive farm income for the latest financial year, and Class IIb where farm income before tax was negligible or negative. * Britain is unusual in having a high proportion of self employed among its part time farmers.

According to the 1975 E C Structure Survey, the proportion of farmers working outside agriculture who were self em lo ed was 45 percent in the UK, 26 er cent in the Community as a whole (Commission, 1680j. The larger average size of U R holdings may be partly responsible since the likelihood of the farmer running a second business increases with farm size.

,

THENATURE AND EXTENTOFPARTTIMEFARMING IN ENGLAND A N D WALES 181

In countries where statistics have been collected over time, part time farming is generally increasing and making inroads into the larger farm size groups, with Class I1 tending to increase relative to Class I and full time farms. Table 10 compares the extent to which farm households in England and Wales today depend on other sources of income, with the distribution of all holdings of 5 acres and above by economic type of occupier in the 1941/3 National Farm Survey. That survey used the classification developed by Thomas and Elms. Class I holdings correspond to Thomas and Elms’ ‘part time occupiers’ who rely mainly on farming for income but draw additional income from other sources. Class IIa is equivalent to their ‘spare time occupiers’ who farm as a source of income but have some other main employment while Class IIb are the ‘hobby and other’ category occupying land for convenience or pleasure rather than for profit.

Table 10 Distribution of Holdings in England and Wales by dependence on Other Sources of Earned Income, 1941/3 and 198314

Economic type No. (OOOs) Part time farming No. (Ooos) of occupier 194113 a Per cenl clan 198314 b Percent biaxlW

Full time 216 74.3 No. OGA 119 69.3 55.1 Part time 33 11.2 Class I 18 10.6 54.5

9.8 Class Ila 18 81.0 Spare time 28 Hobby/other 14 4.7 Class Ilb 17 9.5

All holdings 29 I 100.0 170 100.0 58.4 Sources: Ministry of Agriculture and Fisheries (1946) Table I

Wye College Survey

Making due allowance for differences of definition and coverage between the two surveys, the result seems to be in line with the general trend in other developed countries. The total number of holdings fell by almost half between the two dates, due mainly to small holdings being excluded from the census, going out of agricultural use or being absorbed by larger farms. This should have had the effect of removing many part time units from the total, yet the proportion of part time farms has actually increased slightly. The most likely explanation is that part time farming must have encroached on what were formally full time farms. As the last column in Table 5 shows, numbers of full time and Class J part time holdings have been nearly halved, numbers in Class I1 decreasing by only one fifth.

Conclusions The fact that twenty-four years have elapsed since the Agricultural Economics Society last discussed part time farming seems to imply that the subject has little relevance for agricultural policy. Dismissive attitudes have no doubt been reinforced by the way part time farming has been defined, suggesting that the part time farmer is half-hearted, inefficient or a failed farmer. As circumstances change, part time farming is being seen in a more favourable light. It may have a role to play in supporting farm incomes, retaining families on small farms and thereby helping to sustain rural employment and rural communities and protect the rural environment. Before we can answer the kinds of questions policy makers ask, we must have better information. The aim of this paper has been to describe the rrature of part time farming in England and Wales in broad terms, as a foundation on which more policy-oriented studies may build.

BERKELEY HILL 182

The most important question remains unanswered: is part time farming increasing or decreasing in this country? Periodic surveys like the EC Structure Surveys could answer the question if they employed consistent definitions and sampling methods. A crude comparison of present results with the 1941/3 National Farm Survey suggest that Class I1 part time farms may be increasing relative to Class I part time farms and full time farms, a tendency observed in other developed countries. On present trends, part time farming will at least maintain its position in England and Wales and probably increase, becoming more prominent in the economic and social structure of rural areas.

Multiple Sources of Income: Implications for Family Incomes and Farm Income Support (Berkeley Hill, Wye College*) Income Support and Agricultural Policy There seems to be general agreement among academics working in the policy area that income support is the fundamental objective of agricultural policy in contemporary western Europe. A statistical survey of European agricultural economists confirmed the view that ‘the CAP mainly aims at supporting farm incomes, whereas the other objectives of the Treaty of Rome receive little attention’ was relatively clear-cut (Herrmann et a f , 1985). And CAP-watchers have little difficulty in identifying the importance of incomes to policy; to quote Fennel1 (1985), ‘Concern with the inadequate level of agricultural incomes has been a dominant feature of farm policy in all developed countries since about the mid-1950s. . .’

The Perspectives Green Paper (Commission, 1985a) amply reinforced the fundamental concern of the CAP with living standards and contained the first tentative estimates of the numbers of farmers who would be beneficiaries of an attack on poverty through direct income support and of the costs involved. It is widely recognised that there are great difficulties in assaying standards of living (Dinwiddy, 1980), especially in agriculture. Living costs, family needs, taxation, fringe benefits and other non-traded items should be taken into account. The current desired shift in policy demands, however, that some attempt be made. At the very least it is necessary to include within the command-over-resources side the income of the farmer and spouse, and possibly of other members who contribute to a common household budget, from farming and from other sources such as non-farming gainful activities and pensions. This fact was acknowledged long ago (see for example OECD, 1964; Anstrand, 1969).

In industrialised economies where data have been collected for a number of years, non-farm incomes of farm operators seem to be rising universally in comparison with returns from their farms (OECD, 1978; Arkleton Trust, 1985; European Association of Agricultural Economists, 1986). According to Larson, the various sources of data available for the United States now

‘help researchers to demonstrate that the notion of farm family income being closely tied to size of farm business is no longer valid. The number of persons dependent on farming as a primary source of income is now a relatively small proportion of all people with

* Much of the material in this paper is derived from tabulations repared by Ruth Gasson as part of the MAFF commissioned study of holdings with other g a i n h activities. That contribution and her comments on a draft of this paper are gratefully acknowledged. Responsibility for the way in which the data have been used must rest with me.

,

MULTIPLE SOURCES OF INCOME: IMPLICATIONS FOR INCOME SUPPORT 183

farm earnings. A significant change in the economic conditions in the farming sector may mean only a minor change in income of many people engaged in farming.’

(Larson, 1975: 663).

While such a position may not yet have been reached in the UK, Gasson suggests that the trend is for part time farming to increase and to encroach on ever larger farms. In future other forms of income are likely to feature more prominently in living standards of UK farmers, a trend with obvious attractions for policy makers concerned with the problem of rural poverty.

Existing Income Measures and their Use Macro-economic and micro-economic indicators for UK agriculture are prepared both by national government agencies and by the European Commission. The aggregate indicators are, of course, incapable of giving information on the distribution of the income and relate to income solely from agricultural activity wherever it takes place. They do not indicate the sum of the personal or household incomes of those engaged in farming.

At the micro-economic level, the Farm Management Survey and the FADN share a common base in that data provided to FADN comes from a sub-set of FMS co-operators. Thus while they use different income concepts in presenting the information, neither national nor EC micro-indicators extend to income derived from non-farming activities. University staff who work with FMS generally seem to view the exercise as one of monitoring the prosperity of the industry rather than of the incomes of farmers; to enquire into other sources of income would be both unnecessary for the purpose as perceived and likely to result in a severe problem of non-co-operation by farmers in this voluntary exercise. The latest round of surveys has included a limited extension of

uestions to embrace income derived from non-farming use of farm resources. 8 u r present survey shows this to be only a minor source of additional income, however.

While available data for the UK from national and EC sources may be perfectly satisfactory in the world of practical policy making, they seem to be inadequate to answer the important questions related to incomes policy (or rather to answer the questions which academics not closely involved with the political system think are important). There is an awakening interest in absolute income measurement, appropriate for welfare-oriented studies. The European Parliament has criticised FADN for its inability to reveal what is ha pening to individual earnings (European Parliament, 1983). Even within

illustration of the economic condition’ of farms (Mortensen, 1984). And among the cabinet of the Agricultural Commissioner the need for a more detailed analysis of farm family incomes, includin that from non-agricultural sources, has been described as urgent (Avery, 19857.

Given that official measures of income presently available are incapable of providing the sort of information which is required to assess the extent of the income problem in agriculture, it is necessary to turn to supplementary sources. The remainder of this paper is concerned with the finding of two such sources, the Survey of Personal Incomes (SPI) and the Wye College study of part time farming. Together these fill in some of the more important gaps left in official measurements and add perspective to our conception of the income situation of British farmers.

C 8 PA this information is seen as necessary in order to obtain a ‘proper

184 BERKELEY HII.1.

The Survey of Personal Incomes

The basic nature of the SPI as it relates to agricultural incomes has been described by Lund and Watson (1981) and Hill (1984). The SPI covers other forms of income such as income from employment, investments and pensions. The 1986 Farm Incomes report (Ministry of Agriculture, Fisheries and Food, 1986), in its first public use of the SPI data, shows that over the period 1976/82 self-employment income represented between 51 and 64 per cent of total income of farmers and spouses, not all of which would have been earned from agriculture. Employment constituted 14 to 20 per cent, pensions 4 to 6 per cent and investment income 18 to 23 per cent. There are problems with timing but movements in the relative importance of the latter three compared with the former bear an obvious relationship to the trends in farming income over the period as revealed by other indicators.

The availability of an anonymised public use tape of the SPI for the tax year 1982/1983, corresponding to profits earned mainly in 1981, enables a more flexible analysis to be made than hitherto. According to the raised SPI estimates, some 288,000 individuals or couples received self-employment earnings from agriculture in the UK. This compares with 294,000 farmers, partners and directors in the 1982 June Census (spouses are not included so the figure approximates to couples plus single farmers) and 261,000 holdings, to which might be added a further 91,000 ‘minor’ holdings. As noted by Hill (1984), the SPI cannot detect the incomes of farmers who arrange their businesses as companies, since they technically do not receive self-employment income from their farms, although other enterprises could bring them into the net. In 1982 there were about 10,000 agricultural companies (Hansard 14.3.85).

These 288,000 farmers or couples correspond to the broadest definition of farmer used here, in that it encompasses those entirely dependent on farming for their livelihood and those partly dependent in various degrees. It is unsatisfactory for policy purposes to treat all persons who engage in farming as falling within the net of intended beneficianes. Excluding those cases where farming is not the main self-employment income source produces one possible interpretation of ‘farmer’ for policy purposes. Applying this definition to the SPI has the effect of excluding 13 per cent of cases. Other exclusions are, of course, possible but are not pursued here. Substantial regional differences are evident, the personal income after tax per case being lowest in Northern Ireland and highest in East Anglia, the latter being about double the former (Hill, 1986). Average incomes are generally higher for the broader than the narrower definition. This suggests that non-farming incomes raise the average incomes of part time farmers above those of full timers, an interpretation mirrored by findings in the USA, Canada, France, Sweden, Japan and elsewhere and noted by Robson.

The SPI clearly shows that pensions are important among low income earners and that investment income, while not insignificant at lower levels, rises to over a quarter of the total by the f15,000 to f20,000 band and continues to increase at higher income levels, a situation familiar in the wider economy (Table 11). Neither category of reward should therefore be ignored when assessing the overall income position of farmers.

The value of this approach is amply illustrated by selecting a group of farmers defined according to one criterion and noting the effect on income distribution o f taking wider categories of income. In Table 12 the criterion is that both members of a couple have agriculture as their main self-employment income

MULTIPLE SOURCES OF INCOME: IMPLICATIONS FOR INCOME SUPPORT 185

Table 11. Composition of Total Income by Income Level, 1982/3. Survey of Personal Incomes, Agricultural Sub-set.

Income Earned Income Investment Income Pensions Total Income fOO0s percent of totalincome

Negativehi1 (-157 1< 2 69 2< 4 69 4< 6 79 6<10 77

10<15 78 15<20 69 2 0 ~ 3 0 69

30 and over 64

+ 39 13 1 1 12 17 19 27 28 35

+18) 18 19 9

100 100 100 100 100 100 100 100 100

~~ ~

Total 73 21 6 100

Source: derived from SPI Public UseTape

Notes Total Personal Income is the figure on which tax is calculated. It is after allowances for capital consumption, losses and stock relief. Single persons or couples are brought into this table if there is a self-employment income trade classification ‘agriculture or horticulture’ for the main or subsidiary self-employment source of the single person or husband, or the main source of the spouse. Farmers who arrange their businesses as companies and who receive salary rather than profits, and whose spouses also receive no agricultural self-employment income, will not be included in the table. Such cases are most likely to occur on the larger farms. In this and subsequent tables, totals may not add up due to rounding.

source or that one has and the other has no self-employment income. On the basis of their business income alone there were 92,000 cases with incomes below f2,000,36 per cent of all cases. Taking other forms of earned income into account reduces the number of cases falling below the threshold to 78,000 (30 per cent) while including investment income to achieve a ‘total income’ measure reduces numbers to only 38,000 (15 per cent). Taking a broader definition of farmer produces a substantially similar pattern. Obviously, to take only the self-employment earnings from agriculture as an indication of the extent of low incomes is to risk a serious misrepresentation of the real position.

Table 12. income Distribution of Farmers According to Partial and Total Income Measures, 19W8.3. Survey of Personal Incomes, Agricultural Sub-set. Cases with Agriculture as the Main Source of Self-Employment Income of Farmer or Couple.

income Self-employment income Earned income Total income fOO0s No. cases percent No. cases percent No. cases percent

000s 000s 000s

Negativeinil 30 12 21 8 5 2 1 < 2 62 24 57 22 33 13 2< 4 64 25 61 24 62 24 4< 6 38 15 38 15 48 19 6<10 35 14 44 17 55 22

11 lO<lS 15 6 21 8 L I 7 7

15<20 5 20<30 5 30 and over 2

2 2 1

h 2 11 5 2

2 1

8 5

4 3 2

Total 255 100 255 100 255 100

Source: derived from SPI Public Use Tape

BERKELEY HI1 L 186

The Wye College Survey

The Wye College survey of farmers with other gainful activities provides information of a more qualitative nature which complements the anonymous statistics of the SPI. The basic characteristics of this survey and its general findings are covered in Gasson’s paper. Questions relating to income and some of the issues raised are the main focus here.

In a questionnaire touching on many aspects of the farmer and spouse’s activities, designed to be completed in under an hour, it would not be possible to aim for the degree of precision sought by FMS staff. In venturing into this potentially sensitive area it was necessary to strike a balance between more probing and detailed questions on income and maintaining the goodwill and co- operation of respondents.

In line with this broad approach, questions were of the sort which could be answered without recourse to farm accounts. Farmers were asked to indicate which occupation, the farm or the OGA, provided the main source of earned income of the farming couple. Where other family members made contributions, the respondent was asked how their earnings affected the position. Respondents were invited to indicate broad income bands into which their farm and non-farm incomes fell for the latest year for which figures were available and the question was repeated for any unearned income. The income figure sought was taxable income before payment of tax. There may well be a temptation to understate the farm income in answering this sort of question, more so than with wage or salary income. Recognising that farm incomes are subject to considerable year-to-year variation, respondents were asked if the year to which they referred was typical. Admittedly this approach is a rough and ready way of assessing the income position of farmers and less confidence can be attributed to information on absolute levels of income than on main sources. Nevertheless the uestions elicited some guide to farmers’ perceived

Contrary to the preconceptions of some researchers, farmers proved to be generally willing to discuss income-related matters. Indications of income levels from both sources were declared by 566 respondents on 81 per cent of the farms visited.

dependence on farming an 8 other sources of income.

Farming Couples and Households

One problem frequently encountered when attempting to assess farming incomes is that other family members make contributions which materially alter the size of the household’s potential spending. Gasson has made the point that for welfare purposes a household rather than an individual farmer or couple should be the basic unit of analysis. Evidence from the resent survey suggests that it makes little difference whether earnings of ot I: er household members are taken into account or not, at least in part time farming families. All but 20 respondents replied to the question. In 453 households there were no earners apart from the farmer and spouse. In 227 cases there were other household members earning, usually sons and daughters working off the farm, but in 103 cases no direct contribution was made to household income. In only 14 households out of 124 where other members made a significant contribution to the family budget, in a total sample of 700, was that contribution sufficient to swing the main source of income from farming to another occupation.

MULTIPLE SOURCES OF INCOME: lMPLICATlONS FOR INCOME SUPPORT 187

Main Source of Earned Income

When survey results were raised to national level, there were about two part time farms with earnings mainly from other sources to every one with the farm as the main source (Table 13). Assuming the sam le was truly representative, then for every ten farms in England and Wales Gxcluding those arranged as companies and limited partnerships) there must be about seven where the family derives earned income wholly from the farm, one where the main source is the farm and two where the main source is an OGA.

Table 13. Distribution of OGA Holdings by Main Source of Earned Income for Farmer and Spouse and Farm Household. England and Wales 1984, Raised Results.

Main Source of Farmer and Spouse Farm Household Earned Income Number Der cent Number oer cent

Farming at Home b 17,086 32.6 b 16,393 31.3 Half and Half 1,555 3.0 1.289 2.5 OGA a 32,560 62.2 a 33.209 63.5 No Earned Income 322 0.6 330 0.6 No reply 820 1.6 1,124 2.1

All OGA holdings 52,343 100.0 52,345 100.0 Source: Wye College survey. Totals not always the same due to raising. 95percentconfidencelimitsfor theseestimatesare(a)within lOpercentand(b)within20percent of the estimate.

As would be expected, the proportion of OGA households for whom farming was the main income source in the latest year increased with farm size. At the small farm end of the size spectrum one is tempted to ask more about those holdings which do not have supplementary sources of earned income; in the 1983 Labour Input Inquiry occupiers of 55 per cent of holdings of less than 250 smd did not declare another source. Unearned income must be important here, as the earlier study by Ashton and Cracknell (1961) revealed. Its influence in reducing numbers of low income farmers in the SPI has already been discussed.

Levels of Income

In general part time farms do not generate high income for their occupiers. This is not surprising in view of the predominantly small size of part time farms which Gasson has described. The position with regard to other sources of income is very different. While only 17 per cent of farm incomes were estimated on survey evidence to be above f5,000 and 8 per cent above €10,000, some 58 per cent of other incomes were above 25,000 and 36 per cent above f10,OOO. At the lower end of the range, only 7 per cent of part time farming families appeared to have made nothing from the non-farm occupation in the latest year compared with 38per cent from farming.

Althou h high non-farm earnings tend to be associated with low farm incomes ?Table 14), the pattern is not simple. Of those households earnin nothing from the farm in the latest financial year, more than a fifth (21 per cent? claimed to be receiving less than f2,000 from other sources. At the other

188 BERKELEY HILL.

Table 14. Distribution of Part Time Farming Households by Level of Farm and Other Earnings in the Latest Financial Year. England and Wales 1984, Raised Results.

Farm Income Earnings from other sources (fOOOs) f 000s under2.0 2.0t04.9 5.0109.9 1O.Oandover Toral

per cent where income disclosed

Losdn i I Under 2.0 2.0 to4.9 5.0andover 5.7 4.1 2.2 4. I 16.1

All households 21.3 20.3 21.7 36.7 lOO.O* Source: Wye College survey *Significant at or beyond 5 per cent level of Chi square

extreme, almost four out of ten households with farm incomes over 25,000 were also receiving other earned incomes in excess of 25,000. In terms of total numbers, farmers earning less than 22,000 from farming and less than 22,000 from other sources constituted 10 per cent of the OGA population (based on cases where complete income information was supplied). At the other extreme, households with at least f5,000 from farming and at least as much from other sources formed 6 er cent. The conclusion must be that there is no

classification can nevertheless act as a useful starting point in distinguishing those who are disadvantaged from those who are not (see Harrison, 1977).

simple substitution of non- P arm for farm income. This two way income

Distribution of Low Income OGA Households

The south west stood out as the region where families earning less than 22,000 from the farm and less than f2,000 from other sources were concentrated; this region contained 21 per cent of all OGA holdings but 32 per cent of those with low incomes. Not surprisingly, low income O G A households were to be found mainly on smaller farms (Table 15). Yet 30 per cent of households with earnings of less than 24,000 from both sources were on holdings larger than 250 smd and 10 per cent of more than 500 smd. The proportion of households claiming low incomes was greater in the two middle farm size groups than among the very small farms or those above 500 smd, with some suggestion of more above than below 250 smd. This supports the belief that income problems are felt most acutely among farms on the margin of full time occupation, too large to allow the occupier to have another full time job yet too small to generate a satisfactory income from full time farming.

Conclusion

If the objectives for agricultural policy contained in the Treaty of Rome, which refers to a ‘fair standard of living’ for the agricultural population, really form the basis for action by the Community and, in that they are accepted by MAW, for national activity, the importance of assessing the standards of living of the agricultural population is self-evident. A step in this direction is afforded by two data sources covered in this paper. Both amply illustrate that the income position of farmers cannot be adequately understood by a narrow approach

MULTIPLE SOURCES OF INCOME: IMPLICATIONS FOR INCOME SUPPORT 189

Table IS Distribution of OGA Holdings with Low Incomes by Size and Region. England and Wales 1984, Raised Results

Size Group OGA Holdings withEarned Incomes Below All OGA smd €4,000’ €7, OOOt Holdings

percent of OGA holdings

Under 100 100-249 250-499 500 and over

44.3 25.3 20.8

9.6

48.0 53.7 20.9 18.0 16.5 13.1 14.6 15.2

Total 100.0 100.0 100.0

North Yorkklumber E. Midland East Anglia South East South West W. Midland North West Wales

4.3 5.3 7.8 0.0

21.3 31.5 10.6 9.0

10.2

4.9 6.4 6.5 6.7

18.9 30.7

6.4 9.4

10.0

5.8 8.7 8.8 7.2

16.9 21.1 10.6 6.1

14.7

Total 100.0 100.0 100.0

Source: Wye College survey. ‘Farm income in latest year less than €2,000 and income from other sources less than f2,OOO. ?Farm income in latest year less than €5,000 and income from other sources less than €2,000. or vice

vena. Omitted from this column are farm households with total incomes of less than f7.000 achieved in other combinations, such as more than €5,000 from non-farm sources but less than f2,000 from the farm or vice versa , or where incomes from both sources exceed €2,000 but sum to less than €7,000.

which ignores the non-farm incomes they receive. They also suggest that ‘unearned’ sources must be covered as they seem to make an important contribution in many farm households, but one which is imperfectly understood. Currently the official farm income monitoring system, both in the UK and Europe generally, restricts interest to the income from farming. The relative importance of the several strands of agricultural policy have altered since the information-collecting mechanisms were set up and it now seems necessary to revise these mechanisms because the assessment of important policy options is being blocked by inadequate information on incomes. Fuller coverage of the income position of UK farmers may raise a question of national interest but, if policy is to be formed increasingly on this basis, i t is desirable that the information on the living standards of UK farmers is reliable. To this end the UK should adopt a regular and systematic collection of data on the multiple income sources of its farmers.

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