Cs4 p12 alasia bollman agri_rural

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Cs4 p12 alasia bollman agri_rural

  1. 1. The rural and agriculture interface:towards a quantitative framework Alessandro Alasia and Ray Bollman Rural Research Group 1st Annual Rural Research Workshop May 5, 2011, Ottawa
  2. 2. Outline-summary Why: it is one of the long-standing policy questions Literature: farm families are more dependent on rural communities that the other way around Our objective: assess economic flows between the farm sector and the local economy (focus on labour) Methods: spatial buffers of labour earnings and other economic flows Findings: farm household labour supply to the community is generally greater than the non-family labour demand generated by farm business2 Statistics Canada • Statistique Canada
  3. 3. Why are agriculture-rural linkages arelevant issue? Since the 70s the decoupling of agriculture and rural economy has become increasingly evident A set of questions has become recurrent in the literature and policy debate (Heady 1981, Otto 1986, Fuller and Bollman 1992, OECD 2006; OECD 2010): • Can agricultural policy be a rural development policy? Or vice versa. • What would be the impact of an agriculture shock on the rural economy? Or vice versa.3 Statistics Canada • Statistique Canada
  4. 4. Insights from the literature Over time, agriculture and agricultural policies have become less relevant to rural communities; while the rural economy has become increasingly relevant in sustaining farming families (Smith and Martin, 1972; Otto 1986). OECD (2010:7) “while agricultural policies are important for those who obtain their livelihood from the agricultural sector, the contribution of these policies to the economies of rural communities is tending to diminish.” OECD (2010:9) “the work conducted by the OECD suggests that a continued shift from a sectoral emphasis towards place-based policies is likely to lead to increased policy effectiveness.” OECD (2006), Coherence of Agricultural and Rural Development Policies (pag. 418) • An extensive review of concepts, theory and case studies. • Lack of data on agriculture-rural linkages, particularly when the focus is “place-base.”4 Statistics Canada • Statistique Canada
  5. 5. Our objectives A (preliminary) quantitative framework that can be used to assess the linkages between agriculture and the rural economy with: A focus on economic flows • Between the farm sector (farm) and the community • Between the community and the farm sector (household) A focus on communities (a place-based interface)5 Statistics Canada • Statistique Canada
  6. 6. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  7. 7. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  8. 8. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  9. 9. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  10. 10. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  11. 11. Where are the linkages?(With some simplification and a focus on labour and goods/services) Agriculture policy Other sectoral policy Sector /vertical Sector /vertical E.g. Price/income stabilisation E.g. Price Marketing Marketing Agricultural infrastructure Infrastructure Local organizations Municipalities Community organizations Rural development policy Place based/horizontal Infrastructure Farm businesses Non-farm businesses Business support Not-incorporated Agriculture related human capital Incorporated Non-agriculture related Others Farm families Non-farm families
  12. 12. Methods: a focus on communities The monetary value of the flow is tabulated for the all observations in the buffer zone The total population is tabulated in the buffer zone The calculated flow per capita is assigned to CCS: the CCS in the centre of the buffer zone Inverness, Québec This is repeated for each CCS Dissemination area centroid Dissemination area boundary Census consolidated subdivision centroid Census consolidated subdivision boundary Selected dissemination area centroids 50-km radius buffer zone12 Statistics Canada • Statistique Canada
  13. 13. Methods: data sources Census of Agriculture 2006 • Farm expenditures at the dissemination area level • Gross farm revenue at the dissemination area level Census of Population 2006 • Income by source of members of a farm household (household with a census-farm operator present), at the dissemination area level (Agriculture-population linkage database)13 Statistics Canada • Statistique Canada
  14. 14. Methods: nature of the flows Estimated value of labour demand generated by the farm business, computed as the value of: • Wages and salaries paid to non family members • 50% of (1) Custom work, contract work and hired trucking; (2) Veterinary services, drugs, semen, breeding fees, etc.; (3) Repairs and maintenance to farm machinery, equipment and vehicles; and (4) Repairs and maintenance to farm buildings and fences Estimated value of labour supply from the farm household to the community, computed as the value of: • wages and salaries received by household members with a non- agriculture related job (i.e. all NAICS except 111*, 112*, 1151, 1152) • non-farm self employment income for all members of a farm households Interest flows and other farm expenditures flows14 Statistics Canada • Statistique Canada
  15. 15. 15 Statistics Canada • Statistique Canada
  16. 16. Dollars per capita 0.0 – 180 181 – 460 461 – 935 936 – 1,600 1,601 – 2,500 2,501 – 4,000 4,000 – 7,300 Labour supply from the farm household (per capita) Dollars per capita 0.0 – 230 231 – 520 521 – 1,100 1,101– 2,000 2,001 – 3,000 3,001 – 4,000 4,001 – 7,000Labour demandfrom the farm business (per capita) 16 Statistics Canada • Statistique Canada
  17. 17. Towards a framework to assessflows: Communities with low, medium, high labourlinkages on the supply and demand side SUPPLY from farm household to community Low Total Medium HighDEMAND Labour supply Labour supply Labour supply CCSsFrom farm p.c. <$100 p.c. $100-$500 p.c. >$500to communityLowLabour demand p.c. 409 346 29 784 <$100MediumLabour demand p.c. 20 783 271 1074 $100-$500HighLabour demand p.c. 36 447 483 >$500Total CCSs 429 1165 747 234117 Statistics Canada • Statistique Canada
  18. 18. Toward a framework to assessflows: direction of linkages and community type Community type Agriculture is relatively Agriculture is relatively less important in the important in the community communityDirectionHigher farm to community Agriculture sector changes are Agriculture sector changes are linkages likely to have large impact likely to have a small impact on the rural economy on the rural economyHigher community to farm Rural development is likely to Rural development may still household linkages have a large impact on the have some impact on the farm households farm householdsSmall linkage in both Agricultural and rural initiatives Agricultural and rural initiatives directions are likely to be disjointed are likely to be disjointed18 Statistics Canada • Statistique Canada
  19. 19. Toward a framework to assess flows:Labour linkages (number of CCSs) Community type Gross farm receipts per Gross farm receipts per capita =>$1,602 capita <$1,602DirectionLabour D > labour S 319 CCSs 88 CCSs Higher farm to community linkagesLabour S > labour D 851 CCSs 678 CCSs Higher community to farm household linkagesSmall linkage in both … 409 CCSs directionsLabour supply and demand p.c. <$10019 Statistics Canada • Statistique Canada
  20. 20. Gross farm receipts Gross farm receipts per capita per capita <$1,602 Labour linkages between the Labour D > labour S =>$1,602 319 CCSs 88 CCSs farm sector and the community Labour S > labour D 851 CCSs 678 CCSs Small linkages … 409 CCSs20 Statistics Canada • Statistique Canada
  21. 21. Toward a framework to assess flows:Labour linkages (number of CCSs) Gross farm receipts per Gross farm receipts per capita =>$1,602 capita <$1,602Labour D > labour S Average demand p.c. = $679 Average demand p.c. = $162 Higher farm to community Average supply p.c. = $507 Average supply p.c. = $131 linkages D/S ratio=1.34 D/S ratio=1.24Labour S > labour D Average demand p.c. = $754 Average demand p.c. = $102 Higher community to farm Average supply p.c. = $1,432 Average supply p.c. = $294 household linkages D/S ratio=0.53 D/S ratio=0.35Small linkages Average demand p.c. = $36 Average supply p.c. = $57 D/S ratio=0.6321 Statistics Canada • Statistique Canada
  22. 22. Open issues Improve some of the current measures • Agriculture-population linkage database • Farm corporations and their reporting of agriculture income remain a challenge for this type of analysis Extend the analysis to other type of linkages (capital, land, other assets)22 Statistics Canada • Statistique Canada
  23. 23. Conclusions Overall, insights from the literature seems to apply to labour flows from/to farm sector and community, but not all places are the same If “place-based” is the new approach: we need to assess the place- based agriculture-rural interface(s) When we look at labour linkages, about 850 agricultural intensive communities have stronger linkages from the local economy to the farm households; about 320 agriculture intensive communities have stronger linkages in the opposite direction23 Statistics Canada • Statistique Canada
  24. 24. Thank you

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