Benedetto Rocchi
Department of Agricultural and Resource Economics
University of Florence
Gathering information on total
household income within an
“industry oriented” survey on
agriculture
FAO, Rome 12/06/2009
Summary
From an agricultural to a rural
perspective
Agricultural households in a SAM
framework
Structural linkages between industries
and sectors at the production unit level
Getting data on THI: an “industry
oriented” approach
2
A rural perspective
A focus on agriculture is no longer
perceived as suitable in studying rural
development
A “rural” perspective asks to study
developing processes following a multidimensional, multi-sector, dynamic
approach
3
Agriculture is still important in
rural economies
Agriculture uses the largest part of rural
space: country stewardship function
The contribution of agriculture to the
economy is concentrated in rural areas
In developing economies farming still plays a
fundamental role in livelihood strategies of
rural households
Rural Development policy is usually part of
agricultural policy
4
Linkages between agriculture and
rural economy at the household level
Diversification of family farming towards
non-agricultural activities (tourism, food
processing)
Family labour allocation between farm
and external rural-based activities
Livelihood strategies affects the way
households manage farming
5
The SAM framework
“…a comprehensive, flexible and
disaggregated framework that elaborates
and articulates the generation of income
by activities of production and the
distribution and redistribution of income
between social and institutional groups”
(Round, 2003)
6
Agricultural hholds within the
SAM framework
Two fundamental ways to disaggregate the
economy in a SAM framework


Classifying activities of production by industries
following technical criteria
Classifying institutions by sectors following socioeconomic criteria
The group of agricultural households
results from crossing a sector with an
industry
The proper level to study this structural
linkage is the production unit: agricultural
holding
7
Agricultural holdings in the SAM
framework
Agricultural holding as socio-technical system
working as an interface between institutional
goals and technical features of the production
process
Non-separability between production and
consumption decisions
For social accounting purposes it becomes
necessary to gather joint information on
production units and institutions
8
Gathering data on hholds income:
“sector” oriented surveys
Shortcomings of LSMS in surveying
income of agricultural households



Problems in the quantification of income
from self-managed production activities
Technical problems in implementing an
“agriculture” module within a multipurpose
survey on households (recall period,
technical aspects)
Biased sampling of the agricultural
households sub-sector
9
Gathering data on hholds income:
“industry” oriented surveys - 1
A supplementary survey on a sampling
frame of holdings during the periodical
census (FAO, 2005: chapt. 10) to collect
data on costs and revenues
A supplementary item to survey
“…whether holding is part of an
agricultural households” (FAO, 2005:
item 0701)
10
Gathering data on hholds income:
“industry” oriented surveys - 2
The technical focus of the survey is likely to
support more reliable estimates of mixed
income from farming
A good estimate of mixed income could
facilitate the valuation of other sources of
income through comparison
A sample of holdings properly representing
agriculture as an industry also ensure a
sample of agricultural households with good
statistical properties
11
An example: the ISTAT Farm
Business Survey (REA)
A sample of agricultural holdings
Data on gross value added formation in
agriculture for national accounting purposes
(universe: agriculture as an industry)
Both structural (land and labour use) and
economic data
A module for collecting information on total
household income
12
A case study for Italy: including
holdings accounts in the SAM
The REA dataset have been used to include
accounts for agricultural holdings within a
SAM of Italian economy for 2002
Holdings have been classified into three
groups:



self-consumption
capital constrained
professional
Households managing agricultural holdings
have been classified by income quintiles and
by composition of THI (agricultural vs. non
agricultural)
13
Institutions
Activities
Activities
Intermediate
consumption
Agricultural Holdings
Gross Value
Added
payments to
holdings
Factors
Gross value
added
payments to
factors
Agricultural
Holdings
Households
Firms
Government
Final consumptions
Transfers to
agricultural
holdings
Net value
added
payments to
factors
Agricultural
incomes to
farmers
Hholds
Factors
Distribution of net
factor incomes to
institutions
Distributed profits, social security and other
transfers
Firms
Institutions
Governt
Net taxes and
transfers on
production and
imports
Taxes on
production and
imports
Taxes and transfer on
factors
Direct taxes
14
The agricultural holdings account
for Italy (2002, million of €)
self
consumption
capital
constrained
professional
Total
Gross value added at
market prices
Transfers to productions
525
214
2 734
305
15 800
2 251
19 059
2 770
Total inflows of agricultural
households
739
3 039
18 051
21 829
145
97
8
0
292
764
48
-46
1 448
6 255
845
-924
1 886
7 116
902
-970
489
1 980
10 426
12 895
Taxes on production
Wages
Rents for land
Corporate farms mixed income
Agricultural self employed
labour mixed income
15
The distribution of agricultural
income in Italy (2002, million of €)
self
consumption
capital
constrained
professional
Total
Agricultural self employed
labour mixed income
489
1 980
10 426
12 895
Agricultural hholds I
Agricultural hholds II
Agricultural hholds III
Agricultural hholds IV
Agricultural hholds V
Other hholds I
Other hholds II
Other hholds III
Other hholds IV
Other hholds IV
98
16
15
5
0
127
74
150
3
0
534
191
195
58
0
393
137
384
88
1
175
515
1 196
2 182
5 907
247
10
131
64
1
806
721
1 406
2 245
5 907
767
220
666
155
2
16
Household income nominal multiplier
(Italy, 2002)
self
consumption
capital
constrained
professional
Average
Agricultural hholds I
Agricultural hholds II
Agricultural hholds III
Agricultural hholds IV
Agricultural hholds V
Other hholds I
Other hholds II
Other hholds III
Other hholds IV
Other hholds IV
0.135
0.025
0.025
0.016
0.032
0.441
0.480
0.713
0.654
1.225
0.179
0.067
0.070
0.028
0.037
0.428
0.475
0.710
0.778
1.408
0.012
0.031
0.070
0.127
0.350
0.232
0.314
0.431
0.543
0.995
0.109
0.041
0.055
0.057
0.140
0.367
0.423
0.618
0.658
1.209
Total
Targeting index
3.745
6%
4.179
9%
3.105
19%
3.677
11%
17
Concluding remarks
The inclusion of a set of questions on THI within
questionnaires designed for industry oriented
surveys as a “good practice” in a international
system of statistics on agricultural households
income and wealth
The 2010 Census Programme is an opportunity to
test modules on THI for “industry based” surveys
The inclusion of item 0701 in 2010 censuses may
represent a useful benchmark for future more
specific surveys and should be strongly
recommended and possibly tested in some
countries
18
Concluding remarks
Design information to gather according
to the general purposes of the survey
(structural vs. business) and to countryspecific features of agriculture
Contextual community-level surveys on
markets and prices
Harmonized concepts of income
19
Tank you for attention
benedetto.rocchi@unifi.it