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What do Agricultural Income and Productivity Measurements Really Mean?
Author(s) -
Schmitt Günther H.
Publication year - 1988
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1988.tb00044.x
Subject(s) - productivity , agriculture , economics , farm income , agricultural productivity , agricultural economics , relevance (law) , labour economics , production (economics) , microeconomics , macroeconomics , geography , archaeology , political science , law
Statistical data on labour productivity and income in agriculture reveal large discrepancies between various EC member states, both with respect to their absolute levels and in relation to non‐farm productivity and income in the respective countries. Insofar as they appear to reflect the failure of markets in allocating agricultural resources efficiently, and seem to be inconsistent with conventional wisdom concerning structural adjustment of agriculture, however, it can be seen that those data are misleading to a large extent. Based on a simple model of optimal time allocation between farm and non‐farm activities of members of farm households, it is demonstrated that farm labour productivity and income must be different according to differences in the relation of farm to non‐farm labour supply. The implications concerning international, interregional, intersectoral and intertemporal comparisons of income and productivity are discussed as well as the relevance of market failure in agriculture.