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Promoting structural adjustment in agriculture: The economics of New Entrant Schemes for farmers

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  • Davis, John
  • Caskie, Paul
  • Wallace, Michael

Abstract

We examine the efficacy of incentives for new entrants to farming as an alternative to early retirement schemes for farmers. We briefly review previous studies on the effectiveness of Farmer Early Retirement Schemes in promoting structural adjustment in agriculture and conclude that the economic case for these schemes seems weak. We then employ a dynamic farm optimisation model, incorporating a realistic specification of farmer decision-making, on an original Northern Irish dataset to analyse ex ante the possible impacts of New Entrant Schemes. We find a more positive potential impact from these schemes, particularly the option of an interest rate subsidy on farm development loans. This is attributed to the dynamic effects of the farm investments associated with such schemes, a likely reflection of the long-term effects of differences in age related lifecycle goals. Younger farmers have a longer planning horizon and tend to invest more heavily in business growth than comparable older age groups.

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  • Davis, John & Caskie, Paul & Wallace, Michael, 2013. "Promoting structural adjustment in agriculture: The economics of New Entrant Schemes for farmers," Food Policy, Elsevier, vol. 40(C), pages 90-96.
    • Handle: RePEc:eee:jfpoli:v:40:y:2013:i:c:p:90-96
    DOI: 10.1016/j.foodpol.2013.02.006
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    1. Tammo Francksen & Martin Hagemann & Uwe Latacz-Lohmann, 2012. "Growth of milk production in German dairy farms: an empirical study based on event history analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 43(6), pages 671-685, November.
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    3. J. Davis & P. Caskie & M. Wallace, 2009. "Economics of farmer early retirement policy," Applied Economics, Taylor & Francis Journals, vol. 41(1), pages 35-43.
    4. Michael T. Wallace & Joan E. Moss, 2002. "Farmer Decision‐Making with Conflicting Goals: A Recursive Strategic Programming Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(1), pages 82-100, March.
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    9. Jack, Claire & Miller, Ana Corina & Ashfield, Austen & Anderson, Duncan, 2019. "New entrants and succession into farming: A Northern Ireland perspective," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 8(2), August.
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    11. Marie Šimpachová Pechrová & Ondřej Šimpach, 2020. "Do the Subsidies Help the Young Farmers? The Case Study of the Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(1), pages 255-262.
    12. May, Daniel & Arancibia, Sara & Behrendt, Karl & Adams, John, 2019. "Preventing young farmers from leaving the farm: Investigating the effectiveness of the young farmer payment using a behavioural approach," Land Use Policy, Elsevier, vol. 82(C), pages 317-327.
    13. Šimpach, Ondřej & Pechrová, M., 2015. "Development of the Czech Farmers’ Age Structure and the Consequences for Subsidy Policy," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(3), pages 1-13, September.
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