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The Implications of Common Agricultural Policy Reform for Irish Farmers’ Participation in off-farm Labour Markets

Author

Listed:
  • Thia Hennessy

    (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland)

  • Jasmina Behan

    (Skills and Labour Market Research Unit, FÁS, 25 Clyde Road, Dublin 4.)

  • Tahir Rehman

    (School of Agriculture, The University of Reading, UK)

Abstract

This paper assesses the impact of agricultural policy reform on the representation of Irish farmers and their spouses in the non-farm labour market. The 2003 reform of the Common Agricultural Policy involves the decoupling of direct income support from production. The hypothesis that decoupling is likely to result in a shift of labour out of farming and into the non-farm labour market is tested empirically. The results support the theory that decoupling will result in a decline in the marginal value product of farm labour and therefore in an increase in the number of farmers and their spouses seeking off farm employment. However, the analysis of farm household demographic profiles and the available forecasts for employment in rural labour markets suggest that farmers are likely to encounter considerable difficulties in securing off-farm employment while the outlook for farmers’ spouses, who are predominately female, is somewhat more positive.

Suggested Citation

  • Thia Hennessy & Jasmina Behan & Tahir Rehman, 2005. "The Implications of Common Agricultural Policy Reform for Irish Farmers’ Participation in off-farm Labour Markets," Working Papers 0504, Rural Economy and Development Programme,Teagasc.
    • Handle: RePEc:tea:wpaper:0504
    as

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    File URL: http://www.teagasc.ie/rural-economy/downloads/workingpapers/05wpre04.pdf
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    References listed on IDEAS

    as
    1. Huffman, Wallace E & Lange, Mark D, 1989. "Off-Farm Work Decisions of Husbands and Wives: Joint Decision Making," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 471-480, August.
    2. Lass, Daniel A. & Findeis, Jill L. & Hallberg, Milton C., 1989. "Off-Farm Employment Decisions By Massachusetts Farm Households," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 18(2), pages 1-11, October.
    3. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
    4. Weersink, Alfons & Nicholson, Charles & Weerhewa, Jeeveka, 1998. "Multiple job holdings among dairy farm families in New York and Ontario," Agricultural Economics, Blackwell, vol. 18(2), pages 127-143, March.
    5. Breen, James P. & Hennessy, Thia C. & Thorne, Fiona S., 2005. "The effect of decoupling on the decision to produce: An Irish case study," Food Policy, Elsevier, vol. 30(2), pages 129-144, April.
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    Cited by:

    1. Thia Hennessy & Mark O’ Brien, 2006. "The Contribution of Off-Farm Income to the Viability of Farming in Ireland," Working Papers 0613, Rural Economy and Development Programme,Teagasc.
    2. Darragh Clancy & A. Kazukauskas & C. Newman & Fiona Thorne, 2009. "An investigation of the level of structural change in the agrifood sector of Ireland, Denmark and the Netherlands," Working Papers 0915, Rural Economy and Development Programme,Teagasc.

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