Farm Household Income: Issues and Policy Responses

Foreword......Page 5
Table of Contents......Page 6
Executive Summary......Page 8
Part I.  Farm Household Income Issues in OECD Countries......Page 11
I.1. What are the income objectives?......Page 12
I.2. How can achievement of the different income objectives be measured?......Page 14
Graph.  Average income and net worth of farms in the first quartile (25% smallest farms) as a ratio.........Page 15
Diagram I.1. Components of farm household income......Page 16
Graph I.1. Total income of farm households as a ratio of that of all/other households......Page 17
What are the sources of farm household income? How important is agricultural income?......Page 18
Graph I.3. Percentage share of farm income in total income of farm households......Page 19
How stable are farm household incomes? How did they evolve in the 1990s?......Page 20
How large are income disparities?......Page 21
Graph I.5. Average gross receipts, net operating farm income and total income of the top quartile.........Page 22
Is low income more pervasive among farm households than in the rest of society?......Page 23
Graph I.8. Low-income gap......Page 24
I.4. What is the impact of agricultural support policies, fiscal and social policies on farm household.........Page 25
Graph I.11. Percentage share of support in gross receipts by farm type......Page 26
Graph I.12. Support in relation to net operating income, all farms and top quartile......Page 27
What is the impact of agricultural policy on income risk and income variability?......Page 28
What is the distributional impact of support?......Page 29
Table I.3. Gini coefficients......Page 30
What is the impact of taxation and social policies on the relative income situation of farm households?......Page 31
Graph I.15. Percentage share of social transfers and taxes in the disposable income of farm.........Page 32
I.5. Are policy measures effectively achieving the set objectives in terms of the level,.........Page 33
I.6. Which policy instruments would transfer income to farm households more effectively.........Page 35
Notes......Page 36
Bibliography......Page 38
Annex I.1.  Definition and Sources......Page 40
Graph AI.2.1. Evolution of farm income, total income of farm households andtotal income.........Page 47
Graph AI.2.2. Producer Support Estimate as a percentage of gross receipts, by country.........Page 50
Graph AI.2.3. The distribution of support, gross receipts and net operating income for selected.........Page 51
Graph AI.2.4. The distribution of income and net worth for selected OECD countries......Page 52
Part II.  The Incidence and Income Transfer Efficiency of Farm Support Measures......Page 53
II.1. Introduction......Page 54
Benefits......Page 55
Method, scope and limitations of analysis......Page 56
Effects on total revenues......Page 57
Effects on net farm factor earnings......Page 58
Leakages and length of run......Page 60
Taxpayer costs of deficiency payments......Page 61
Table II.1. Parameter values used and estimated results from transfer efficiency calculations......Page 62
Graph II.1. The incidence of deficiency payments......Page 64
Taxpayer costs of market price support......Page 65
Estimated results......Page 66
II.5. Transfer efficiency of factor subsidies......Page 67
Income benefits of an area payment......Page 68
Taxpayer costs of area payments......Page 69
Income benefits of subsidies to purchased inputs......Page 70
Estimated results......Page 71
II.6. Conclusions and policy implications......Page 72
Notes......Page 73
References......Page 74
Annex II.1.  Sensitivity of Transfer Efficiency Estimates to Selected Assumptions......Page 76
Table AII.1.1. Variables, parameters and equations of the transfer efficiency model......Page 77
Table AII.1.1. Equations of the transfer efficiency model (cont.)......Page 78
Table AII.1.2. Model parameters used in sensitivity analysis......Page 79
Table AII.1.3. Sensitivity of transfer efficiency to alternative assumptions......Page 80
Table AII.2.1. Share of farmed land owned by the farmer......Page 83