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Off-farm labour and the structure of US agriculture: the case of corn/soybean farms

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  • Richard Nehring
  • Jorge Fernandez-Cornejo
  • David Banker

Abstract

While the growing importance of off-farm earnings suggests large benefits accrue to farmers from efforts to expand off-farm income opportunities, economic well being also depends on greater efficiency. To comprehensively gauge the economic health of farm operator households' off-farm income is interpreted as an output along with corn, soybeans, livestock and other crops. To accomplish this task two related methodologies were used. First, using 2000 data, a multi-activity cost function was set up to analyse labour allocation decisions within the farm operator household and also to estimate returns to scale and scope. Second, using 1996-2000 data, an input distance function approach was followed to estimate returns to scale, cost economies and technical efficiency - and the relative performance of farm operator households with and without off-farm wages and salaries compared. The cost function and input distance function results both suggest that off-farm outputs and inputs can be modelled in a multi-activity framework and involve significant economies of scope.

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  • Richard Nehring & Jorge Fernandez-Cornejo & David Banker, 2005. "Off-farm labour and the structure of US agriculture: the case of corn/soybean farms," Applied Economics, Taylor & Francis Journals, vol. 37(6), pages 633-649.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:6:p:633-649
    DOI: 10.1080/0003684042000323582
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    4. Hudak, Michael, 2015. "Three studies on applying Positive Mathematical Programming and Bayesian Analysis to model US crop supply," ISU General Staff Papers 201501010800005844, Iowa State University, Department of Economics.
    5. Rupak Goswami & Soumitra Chatterjee & Binoy Prasad, 2014. "Farm types and their economic characterization in complex agro-ecosystems for informed extension intervention: study from coastal West Bengal, India," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 2(1), pages 1-24, December.
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    8. Huifeng Pan & Yingqi Liu & Hongwei Gao, 2015. "Impact of agricultural industrial structure adjustment on energy conservation and income growth in Western China: a statistical study," Annals of Operations Research, Springer, vol. 228(1), pages 23-33, May.
    9. Blank, Steven C. & Erickson, Kenneth W. & Nehring, Richard F. & Hallahan, Charles B., 2006. "Agricultural Profits and Farm Household Wealth: A Farm-level and Cross-sectional Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21436, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Chang, Hung-Hao & Boisvert, Richard N., 2006. "Participation in the Conservation Reserve Program and Off-Farm Work: Implications for Farm and Farm Household Productivity," 2006 Annual meeting, July 23-26, Long Beach, CA 21147, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    12. Chang, Hung-Hao & Boisvert, Richard N., 2009. "The Conservation Reserve Program, Off-Farm Work, and Farm Household Technical Efficiencies," Working Papers 57034, Cornell University, Department of Applied Economics and Management.

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