7.0 FARMERS WITH OFF-FARM WORK: SEVEN CASE-STUDIES
Some of the policy implications described above were explored in more depth by carrying out seven case-studies of farmers who worked off the farm. Off-farm investment was not investigated, but the case studies highlight some interesting aspects of these farmers' investment decisions.
7.1 Methodology.
A case-study approach was taken in order to provide depth, detail and meaning to the survey results in Rhodes and Journeaux (1995), and to explore the validity of the individual decision-making model described in section two. Qualitative methods such as case-study research, are useful for their ability to address process and to reconceptualise the unquestioned or the taken for granted (Opie, in Davey et al, 1994). However, definitive conclusions cannot be drawn from qualitative research, only indicative trends, ie, the results cannot be generalised without reference to quantitative research, or other sources of validation [using the process of triangulation (Stake, 1995)]. However, useful and policy relevant conclusions are able to be drawn from case-studies, especially when combined with other sources of data (Patton, 1990).
Information-rich cases were purposefully selected (Patton, 1990). The study was narrowed to sheep and beef farmers who had recently taken on off-farm work, to obtain a degree of homogeneity [ However, it eventuated that two of the farmers had worked off the farm for some time. These farmers were nonetheless interviewed, and provided helpful insights.] . Within that group, a range of situations and locations [ All the farmers were located in the upper half of the North Island.] was selected in order to provide maximum variation. This process provides central themes that cut across a variety of circumstances (Patton, 1990).
The interviews were conducted during December 1996 and January 1997, using a semi-structured questionnaire, a copy of which may be found in Appendix 2. Where possible, both husband and wife participated in the interview.
7.2 The Case Study Farms.
All seven of the case-study farms were sheep and/or beef farms in the upper half of the North Island, and had off-farm income (both partners combined) exceeding $20,000 per year. In all seven cases, both husband and wife worked off the farm, although not all worked full-time, and not all worked throughout the year. Important features of the farms are summarised in Table 1. In order to preserve the anonymity of the farms, they have been designated as Farm A, farm B etc. The farms are described in more detail in Appendix 1.
Table 1: Features of the Case Study Farms
| A | B | C | D | E | F | G | |
| Number of stock units (s.u.) and nature of farm | 3000 s.u., intensive S&B |
1000 s.u., intensive S&B | 4000 s.u., (run by 2 families [ Only one of the families was interviewed. The family that was not interviewed are at a similar stage in life to the interviewed family, but only the male partner works off-farm.] ) intensive S&B& deer | 3000+ s.u., intensive S&B& deer | 4000+s.u. hard hill country, extensive S&B | 2000+s.u., Moderate hill country, extensive S&B plus stud sheep | 200 s.u.beef fattening on retained block,250 s.u. [ The leased block had formerly supported 350 beef cattle stock units.] dairy grazing on leased block. |
| Stage of development | Fully developed. and grassed | Partly developed, 1/4 bush. | Partly developed, 40% bush | Fully developed and grassed | Partly developed 20% bush & scrub | Fully developed and grassed | Fully developed and grassed |
| Stage in life | No dependent children | Children at university | Primary school age children | High school age child | pre-school age child | High school age children | No dependent children |
| Type of off farm work [ In this row, the abbreviations m. and f. refer to the male and female partners in the farming family interviewed.] | m. professional | m. professional, related to agriculture | m. professional, related to agriculture | m. professional | m. farm work | m. agricultural processing | m. agricultural contractor |
| f. clerical | f. professional | f. professional | f. manager | f. professional | f. professional | f. manager | |
| Off-farm work decision | late in farm career, partly a forced decision | purchased farm expecting to work off-farm | purchased farm expecting to work off-farm | voluntary decision, aims to serve community | purchased farm expecting wife to work off-farm, not husband | late in farm career, a forced decision | purchased farm expecting wife to work off-farm, not husband |
7.3 The Issues .
The following issues were explored with the seven case study farmers:
| (1) | The effect of off-farm income on the productivity and profitability (net farm income) of the farm in the short, medium and long term. |
| (2) | The effect of off-farm income on the rate of adoption of production-enhancing innovation, and labour-saving innovation. |
| (3) | The effect of off-farm income on the stress levels and social participation rates of the farmers and the farm household. |
| (4) | The attitude of the farmers to working off the farm, compared with working full-time on their farms, including their motivation; and their feelings on the attitudes of their communities/peers to off-farm work. |
| (5) | The effect of off-farm income on the biophysical risks on the farm, and the farmers' ability to handle adverse climatic events. |
| (6) | Whether the families had access to sufficient information to make the decision about taking on off-farm work, and access to training and education for off-farm employment. |
| (7) | Whether road conditions are a significant deterrent to their off-farm work, and whether there are health and safety implications of their off-farm work. |
7.4 The Case Study Farmers' Responses.
7.4.1 Off-farm work and the productivity and profitability of the farm.
Engaging in off-farm work could be expected to reduce the amount of time spent working on the farm, and the productivity and profitability of the farm, given the framework introduced in section 2.
All seven case study families reported that they were working fewer hours on-farm as a result of off-farm work. However, it proved difficult in most cases to obtain data which would enable the estimation of the change in net farm income. Such information as was available is presented in Table 2. Further details may be found in Appendix 3. In summary, the effect of off-farm work on the case-study farms' productivity and profitability was as follows:
- all seven case study farms, the total labour input to the farm by the farm family had declined as a result of off-farm work. However, hours worked in total had increased.
- three of the seven cases (Farms A, D, and F), gross farm output in dollar and volume terms has clearly declined as a result of taking on off-farm work. It is striking that only a 10-15% decrease in stocking rate has been required when labour hours were reduced by 25-38% in farms A and D.
- one case (Farm G) output from the land has been maintained by leasing some of the land out to another farmer. The stock type carried on the leased block has changed from beef to dairy cattle, and the stocking rate has fallen. It is likely that the output in dollar terms from the leased block has improved, given the current relative profitabilities of beef and dairy farming.
- one case (Farm E) output has been maintained because of the seasonal nature of the off-farm work, and to some extent, because of the compensating effect of employing a labour unit
- B and C are somewhat different to the others in that the farmers have always worked off the farm. In the case of Farm C, the farmers felt they would intensify production if they were not working off the farm, whereas the farmers on Farm B would not.
- farms A, C, E and F, extra farm contracting and labour costs have been incurred, to compensate for the reduction in labour hours applied by the farmers.
- the short term, net farm income from all the case study farms except Farm B is lower because of off-farm work, as a result of reduced output and/or increased costs
- the long term, the current use of off-farm income for farm operating costs and development on all the case study farms except Farm A, may result in higher output and net farm income from these farms than would otherwise have been the case, as illustrated by the historical performance of Farm B [ Five of the seven farmers stated that they would not give up off-farm work even if the farm fully supported the family (i.e, for these farmers, off-farm work was not seen solely as a temporary measure to provide income for farm development).] .Off-farm work did not seem to affect the amount of time spent on management tasks in any systematic way on the case-study farms.
In summary, all seven case study families devoted fewer hours to working on the farm because of their off-farm jobs, and most had developed strategies for reducing their on-farm workload, including reducing stock numbers, changing stock policies to stock classes or types requiring lower labour inputs, the use of contractors, the employment of labour, and leasing land to other farmers. Some of these strategies reduce physical production, and all tend to reduce the profitability of the case study farms.
However, these short term effects are likely to be offset in the long run by the use of off-farm income to maintain or develop six of the seven farms - expenditure which would not have occurred without off-farm work. This phenomenon is illustrative of the case study farmers' commitment to their farms, in the face of the poor returns from the land. For example on Farm B, the farmers viewed the productivity improvements they had been able to achieve through the investment of off-farm income in farm development, as a personal triumph. Similarly, on Farm C, the farmers viewed their off-farm jobs as the factor which enabled them to continue to farm and improve the land, which they were personally very attached to.
A further productivity implication of off-farm work on the case study farms is implied by the frustration of the two younger farmers in the study, at their inability to allocate sufficient time and energy to farm development. Farm development which is not carried out while the farmers are relatively young, is less likely to be completed when the farmer is older and less physically energetic and able-bodied. However, farm development may be carried out by contractors when the farmer is older, if the farmer has sufficient disposable income.
Table 2: Impact of Off-farm Work on Output from, and Inputs used, on the Case Study Farms
| FARM | |||||||
| A | B | C | D | E | F | G | |
| changes in total s.u. | 10-15% down | none | none | 10% down | none | none yet | 15-20% down |
| change in stock policy [ On Farms B and C (where the farmers had always worked off the farm), the entries indicate how the current stock policy is different from that which would be in place if the farmers did not work off the farm, rather than how they had changed their policy when off-farm work was taken on. ] due to off-farm work | sheep numbers reduced | none | more breeding cows, fewer dairy grazers | sheep numbers reduced | none | lambs sold store not fat | dairy grazers on leased block |
| changes in inputs necessitated by off-farm work | contract spraying & crutching | none | casual labour | part-time labour, contract shearing | labour unit, nanny | casual labour, contract fencing | none |
| changes in inputs allowed by off-farm work | - | capital fertiliser and fencing | capital fertiliser | maintenance fertiliser, R&M | weed spraying (farm develop-ment) | maintenance fertiliser | maintenance fertiliser & weed control |
| capital purchases | 4 wheel motorbike | 4 wheel motor-bike, utility, tractor, mower | utility | car | second vehicle | second vehicle | utility |
| % decrease in farm family labour input [ Details of labour hours are presented in Appendix 2.] | 25 | 45 | 23 [ This represents the decrease in labour applied by the family interviewed only. The change in labour hours applied by the other family involved in the operation of this farm is not known.] | 38 | 38 | 35 | 67 |
| Change in time spent on management tasks | increase | no change | increase | decrease | no change | increase | decrease |
7.4.2 The Adoption of Innovation.
As all seven case study farmers were working longer hours in total after taking on off-farm work, it seems reasonable to expect that they would not be interested in adopting labour-intensive production-enhancing innovations, but would quickly adopt labour saving innovation.
However, the case study farmers' answers to the questions posed about adoption of innovation illustrate the complexity of the relationship (if any) between off-farm work, and the adoption of innovations. Their responses are summarised in Table 3.
On three of the five farms where the male partner [ In all cases where off-farm work provided access to information that was useful on the farm, it was the male partner' s work that provided the information. This may partly be explained by the non-agricultural nature of the female partners' jobs on the case-study farms. ] had off-farm work that was both related to agriculture in some way, and provided useful information, production-enhancing/labour-intensive innovations were being adopted despite time constraints. Only one farmer (Farm F) reported no effect of off-farm work on the adoption of innovations as assessed by proxy measures (attendance at field days and use of consultants), and the direct questions on the subject.
Table 3: The Effect of Off-farm Work on the Adoption of Innovations on the Case Study Farms
| FARM | |||||||
| A | B | C | D | E | F | G | |
| Attendance at field days, etc | decreased to nil | decreased but still try and attend | decreased but still try and attend | no change (not a regular attender anyway) | no change | no change | no change |
| Use of consultants | no change (not used) |
no change (not used) |
no change (used consultant) |
no change (not used) |
no change (not used) |
no change (not used) |
no change (not used) |
| Access to useful information at work? | yes - a little | yes - large amount | yes | no | yes - a little | no | yes - a little |
| Type of information | business skills | technical and marketing information, research results | research results, observing other farmers' practices | - | observing other farmers' practices | - | observing other farmers' practices, people skills |
| Production enhancing adoption | decreased (less break feeding, but adopted scanning) | increased eg use of Fecundin, scanning, new breeds | increased (have to be seen to be "up with the play") | no change | no change | no change | small manage-ment changes |
| Labour saving adoption | increased eg four wheeler | increased eg four wheeler | increased eg stock handling and weighing systems | no change | no change | no change | small manage-ment changes |
7.4.3 Stress
As the case study farmers devote increased amounts of time to work (on- and off-farm combined), it is reasonable to expect that the farmer and the farm household will experience increased stress levels, and reduced social participation rates. If stress reaches a critical level, changes will be instituted by the farming household. These changes may have productivity implications, or may result in the sale of the farm and the loss of the farmer from the industry (with the accompanying loss of human capital). Similarly, if farming families reduce their participation in recreation, sport, family activities, and voluntary and community work in response to time pressure, the social fabric of rural areas is weakened. In the long term, this may make remote rural areas less attractive as places to live and work.
The case study farms showed a range of responses to the questions on stress and social participation (Table 4). For some of the case study farmers the reduction in financial difficulties and the challenge of the off-farm job more than compensated for the time and energy requirements. However, in 5 of the 7 cases, increased stress was experienced by the family [ In two cases (Farms E and F), the farmers volunteered the information that the female partner was happy to be working off the farm, and this may have been the case for some of the other female partners as well. However, on Farm A, the female partner would prefer not to work off the farm.] as a result of off-farm work. The reasons varied, but all of those reporting increased stress mentioned tiredness and lack of time as sources of stress. One farmer reported frequent acute fatigue because his job involves night shift work. Sleeping in the morning sometimes proved impossible because of the demands of running the farm business.
This situation was perceived as unsustainable by the farming family, and alternative options for the future were being considered [ By March 1997 the family had leased all but 50 ha of the farm, and were renting a home in the town where both partners work.] . Although farm sale was being considered [ It is ironic that the farmer' s children were enthusiastic about farming as a career, but were unlikely to be able to inherit the family farm, whereas anecdotal evidence suggests that many farmers with viable farms find that their children are not interested in farming as a career.] , the farmer was not planning to leave farming altogether, but to downsize the farming enterprise, so the industry would not completely lose the farmer's accumulated human capital. Another factor exacerbating this situation was that the farmer felt forced into off-farm work - the farm is a family farm that had previously supported a number of generations of the family, and the necessity for off-farm work had not been part of the family's expectations.
The case study farmers who had not expected to work off the farm when they purchased it, and felt forced into the decision, were the most obviously stressed, especially where the farming system had not been adapted in a planned manner to reduce the farmers' labour input. One farmer remarked on the sense of failure when the farm he had worked on for nearly thirty years of his life ended up as a business that was unable to support his family in the manner which he had strived for. On the other hand, stress appeared to be at more manageable levels on the case study farms where the family had expected to work off the farm from the time of purchase, and/or where adjustments to the farming system had been made before off-farm work was taken on.
A significant source of stress for four of the farmers was a sense of frustration that the farm was either deteriorating, or not progressing fast enough, because of insufficient time and/or labour that the farmer was able to put into the farm.
In four of the seven farms, social participation had decreased as a result of off-farm work. On one farm, social participation had increased, because part of the farm has been leased out, reducing both stress and time pressure.
Table 4: The Effect of Off-farm Work on Stress and Social Participation Levels of the Case Study Farm Families
| FARM | |||||||
| A | B | C | D | E | F | G | |
| Change in stress level | much higher | higher | higher | lower | higher | lower
(female) higher (male) |
lower |
| Sources of increased or decreased stress | farm
deteriorates, family friction, peer disapproval, tiredness, lack of time, |
conflict of
interest or loyalty, farm deteriorates, tiredness, lack of time, family suffers, but financial stress eased |
family
suffers, tiredness, lack of time, farm not progressing fast enough. |
Outside
interest, challenge |
farm suffers,
family suffers, tiredness, lack of time, conflicting role demands |
severe
fatigue, family suffers, but financial stress eased |
financial stress eased, but dissatisfied with status of off-farm job. |
| recreation & sport | no change | no change | no change | decrease | decrease | decrease | increase |
| family activities | no change | no change | no change | no change | decrease | decrease | no change |
| voluntary or community work | decreased | no change | no change | decrease | no change | decrease | increase |
7.4.4 Attitudes to Off-farm Work.
The trend towards engaging in off-farm work may be viewed by policy makers as desirable, on balance, for reasons such as the retention of rural communities and services. However, if farming communities view off-farm work in a negative light, some farmers will resist taking on off-farm work.
In response to questions about their motivation for working off-farm, six of the seven case study families cited financial reasons, ie, they were working off the farm because they considered that the return from off-farm work was better than the return they could achieve by devoting all their time to on-farm work. However, additional non-financial reasons for working off-farm were cited by all seven of the case study families.
All seven case study farmers were remarkably positive about their off-farm employment, while acknowledging the difficulties they experienced (Table 5). For six of the seven families, financial pressures necessitated off-farm work, but most of them valued the work for its non-financial benefits, as well as the income it generated. One farmer remarked that working off the farm fulfilled personal aspirations that could not be satisfied while full-time farming. Another valued the way that off-farm work widened the employment possibilities open to him when farm work was no longer physically possible. For three of the seven males, the only valued aspect of off-farm work was the money. As noted in the section on stress, those case study farmers who, at the time of the interview, felt that off-farm work had been forced on them, tended to have a more negative view of off-farm work than those who had expected to work off the farm from the outset.
The two younger male farmers of the seven were the only ones who would consider abandoning the off-farm job if economic circumstances permitted. The others stated that, on balance, they would continue to work off the farm, for various reasons. The two younger farmers were also distressed at the farm not progressing fast enough, because their time and labour are diverted away from the farm by their off-farm jobs.
One of the case study families had a positive view of all that they had been able to achieve because of off-farm work, but were nonetheless concerned that policy makers should not conclude that it was acceptable for ever growing numbers of farmers take on off-farm work.
Six of the seven farmers felt that the community was accepting or supportive of their decision to work off-farm, and most felt that the community's attitude to off-farm work had become more positive over the past 10-15 years.
Table 5: Attitudes to Off-farm Work on the Case Study Farms
| FARM | |||||||
| A | B | C | D | E | F | G | |
| Reasons for taking on off-farm work | children's education; falling output prices | capital generation for farm development | debt servicing | response to community need | financial survival | falling output prices; children's education | falling output prices |
| Positive aspects of off-farm work | male:
challenge, people contact, using personal abilities |
male: challenge, something different, people contact; female: people contact, working with children | male: stimulation, contact with non-farmers; female: independent career and money source, interest. | male: Challenge, stimulation, input to community | male: the
money, female: sanity, money |
male: the
money, people contact; female: freedom, people contact |
male: the money |
| Negative aspects of off-farm work | stress, loss of enjoyment of farm |
split loyalties | vehicle running costs, travel time, split focus | less leisure time | own farm suffers | stress, tiredness | low status of off-farm job |
| Stop off-farm work if possible? | no | no - keeps options open | male: maybe, female: yes |
no - insufficient challenge | male: yes, female: no |
no (couldn=t face another price downturn) | no - farm too small |
| attitude of community | Not 100% supportive"real farmers tough it ou", no change in last 10-15 years | Accepting, no change in last 10-15 years | encouraging, more accepting than 10-15 years ago, especially for young farmers | positive, more accepting than 10-15 years ago | supportive more accepting than 10-15 years ago |
positive more accepting than 10-15 years ago |
accepting, more accepting than 10-15 years ago |
7.4.5 Off-farm Work and the Biophysical Environment.
The case study farmers' responses to the questions on the biophysical environment and ability to handle adverse events were very varied (Table 6). While there is no clear pattern about the effects of off-farm work on the case study farmers' ability to handle adverse events, in general the case study farmers thought that off-farm work either had no effect on, or reduced their ability to engage in environmentally improving projects. However, all of the case study farmers expressed the opinion that the major constraint to such projects is not so much time, as money.
Although the case study farmers saw little connection between their off-farm work and the biophysical environment on their farms, there are some indications that there are indirect impacts. It seems likely that most of the case study farms are more resilient as a result of off-farm work - five of the seven farmers are applying more fertiliser because of their off-farm work, which may improve the vegetative cover, increase drought resistance (Cumberland et al, 1971) and reduce runoff (Lambert et al, 1985); and the farms tend to carry fewer stock and/or are less intensively farmed. In addition, three of the seven case study farms were being developed using off-farm income. Some of the impacts of this development have the potential to be positive in environmental, as well as economic terms, eg, fencing, which enables better control of stock grazing patterns.
Although the substitution of cattle for sheep is a labour saving strategy which may have some negative environmental effects (eg, increased potential for riparian damage and breaking up of the pasture cover), in the two case-study farms where the sheep to cattle ratio has been reduced, cattle numbers have not increased.
Table 6: The Effect of Off-farm Work on the Biophysical Risks on the Case study Farms
| FARM | |||||||
| A | B | C | D | E | F | G | |
| soil conservation | doing less | no change | no change | no change | doing less | no change | no change |
| afforestation | doing less | no change | no change | no change | no change | no change | no change |
| riparian fencing | doing less | no change | no change | no change | doing less | no change | no change |
| weed/pest control | no change | no change | doing less | no change | doing less | no change | doing more |
| ability to handle adverse climatic event | decreased | increased (better fertility) | increased (sharper focussed management) | no change | increased (sharper focussed management) | decreased | increased |
| response to short term event | ignore damage | work longer hours | work longer hours | not applicable (there are no such events in the district!) | work longer hours | ignore damage | work longer hours/ take time off to repair |
| response to long term event | ignore damage | work longer hours | work longer hours | not applicable | work longer hours | no change | destock |
| effect on environ-mental conditions | negative | positive | positive | no change | no change | no change | positive |
7.4.6 Education, Training and Information.
In section 6.5, it was noted that farmers need access to information about the likely costs and returns from working on- and off-farm in order to make the decision about working off-farm. In addition, the relationship between off-farm work and the education level of farmers was also highlighted.
The responses of the case study farmers to the questions on education, training and information are summarised in Table 7. The case-study farmers were strongly self-motivated and self-reliant in their search for information, training and further education.
Information, training and education were not viewed as significant off-farm work issues by the case-study farmers. Two of the farmers felt they had historically lacked information about product prices, and were therefore not well-prepared for the price downturns they had experienced. One farmer remarked on the importance of independent price forecasts.
Two of the farmers had undertaken extra training before obtaining their current jobs, and three felt the need for further training. However, the case study farmers felt that sufficient training had been (and continued to be) available to them [ Except for one farmer, who wanted to undertake night classes in a subject offered at a local school - however, the particular course had been cancelled because of lack of numbers enrolling.] , and viewed it as their own (or their employers') responsibility to pay for further training.
Table 7: The Need for Information, Education and Training on the Case Study Farms
| FARM | |||||||
| A | B | C | D | E | F | G | |
| Sufficient information on farm profitability? | yes | yes | yes | yes | no - slump in farm prices not predicted when bought farm | yes | no - beef price slump not well predicted |
| Sufficient information on jobs & wages? | yes | yes | yes | yes | yes | yes | yes |
| Method of provision | independent product price forecasts | ||||||
| Training done | yes | none since initial training | yes | none since initial training | no | no | no |
| More training required? | yes | yes | no | no | no | no | yes |
| Suggested method of provision | own responsibility | local school courses | extra-mural Massey course | ||||
7.4.7 Roading and Health and Safety.
One of the characteristics of farms is that they tend to be physically isolated from towns and cities where off-farm work is most likely to be available. The state of the roads used to travel to work may therefore be an important factor governing the decision to work off-farm. Farming is also a high-risk profession for accidents, and off-farm work may have an impact on farmers' susceptibility to accidents.
The responses of the case study farmers to the questions on travel, roading and health and safety are summarised in Table 8. Despite driving some long distances to off-farm work in some cases, roading was not a particularly important issue to the case study farmers, with five of the seven experiencing no real problems with travel [ Travelling to the farms in order to conduct this study entailed, in some cases, a long and difficult drive. It is surprising that more difficulties were not expressed by the farmers.] . However, the three farmers who travelled the furthest were concerned at the possibility of car accidents, especially as they drove when tired after work. Two of the farmers were concerned at travelling over unsealed portions of the road.
Health and safety implications are considered an issue by two of the seven case study farmers, where the off-farm work carries relatively high levels of injury risk, and on three of the farms where particularly long distances are travelled. Although the farmers themselves were not particularly concerned about health and safety aspects of off-farm work, the reported levels of fatigue (Table 3) combined with driving long distances and operating agricultural machinery on the farm, suggest that health and safety is likely to be an issue associated with off-farm work.
Table 8: Roading, Health and Safety Aspects of Off-farm Work
| FARM | |||||||
| A | B | C | D | E | F | G | |
| Distances travelled to work (one way) | male- 71 km, incl 5 km unsealed | male: 0-80 km; female: 10-40 km, incl short distance unsealed. | male: 20 km; female: 30 km, including short distance unsealed | male and female: 16 km, all sealed | male: 2-5 km; female: 65 km, incl 9 km on unsealed road | male and female: 40 km, of which 12 km is unsealed | male: ave 20 km; female: 8 km |
| Travel difficulties cited | 5 km of unsealed road | none | none currently | none | long travel times for female, unsealed section of road | none | none |
| Health and safety implications cited | driving when tired | safer in off-farm work than on-farm | farm must be "state of the art" in safety, as it is used in association with the off-farm job. | none | male: accident while working off-farm disastrous. Female: driving long distances | tiredness, especially when driving home | some risk of injury associated with male partner's job. |
7.4.8 Discussion.
The framework developed in section 2 suggests that farmers will work and invest off their farms if the return (at the margin) is higher. In relation to off-farm work, the framework suggests that the hours devoted to on-farm work, and farm output, will fall as a result of engaging in off-farm work, and that total hours worked are likely to increase.
The case study farmers followed the decision processes described by the demand and supply model to some degree. Six of the seven farmers were working off the farm because they were aware that they earned more by doing so [ The seventh (farm D) was also aware that he earned more off-farm than on-farm, but his motivation for working off-farm was entirely non-monetary.] . However, as noted in section 4.2, non-monetary factors were also very important to the case study farmers.
All the case study farmers worked longer in total, and fewer hours on-farm, as a result of off-farm work, as described by the model. However, in only three of the seven cases has output clearly declined in the short term, and in the longer term, output from six of the seven farms is likely to be higher as a result of off-farm work. The case study farms illustrate an aspect of farmer decision making that has not been captured by the economic model. The case study farmers were all either substituting other inputs (eg, employed labour, contractors) for their own labour, or investing off-farm earnings back into the maintenance or development of their farms, or both. These strategies are able to strongly offset any decline in output generated by the farmers' reduced labour input.
The case study farmers appeared to approach the input substitution strategy as a simple economic decision based on the relative costs and returns of the substitute inputs, and their own off-farm earnings rate ie, substitute inputs were used when the cost of doing so was less than the returns, and the final payoff was better than the farmer taking time off work and doing the job themselves.
Their approach to the second strategy was more complex. It is possible that the farmers were prepared to invest off-farm earnings back into their farms for sound economic reasons eg, they consider that investing in maintaining or improving their farms will yield the best possible monetary return. However, this was not the way the case study farmers presented the investment decision. For example, the farmers on farm B took enormous pride during the interview, in documenting the improvement in individual stock performance that had been achieved because of the investment of off-farm earnings in the farm - they did not refer at all to the profitability of the farm, nor the monetary return on the investment made.
The decision by six of the seven case study farmers to invest off-farm earnings in either farm maintenance or development appears to be driven more by a desire to make a good job of farming, rather than any immediate thought of the financial return. Non-monetary goals therefore appear to be highly significant in the case study farmers' investment decisions. Six of the seven families exhibited more flexibility in their labour allocation decisions than in their capital allocation decisions, ie, they were willing to work off the farm to achieve a higher return, but surplus capital was invested in the farm rather than elsewhere. This is supported by Gouin et al (1994) who suggest that farmers have a stronger degree of capital immobility than labour immobility.
The case study farmers also illustrate that adoption of innovation need not necessarily fall when off-farm work is engaged in. The increased exposure of some of the case study farmers to new ideas through their off-farm employment, acted as a spur to adopting innovation.
Five of the seven case study farmers reported that off-farm work increased their stress levels and reduced social participation. Stress appeared particularly acute when the farmer had not expected to work off the farm when the farm was purchased, and insufficient adjustment had been made to the farming system to reduce the work load for the farm family. Stress was therefore linked to the case study farmers' attitude to off-farm work - the farmers who felt that the decision to work off-farm had been forced on them, tended to view it as an acknowledgement of failure.
The case study farmers did not perceive a strong relationship between off-farm work and the biophysical environment. However, the effect of the increased fertiliser applications allowed by off-farm income on five of the seven farms may improve their resilience.
Education, training and information issues did not appear to be very significant to the case study farmers. They were strongly self-motivated and self-reliant in this area.
Similarly, roading, health and safety issues were not seen as significant issues related to off-farm work by the case study farmers. Although the farmers themselves were not particularly concerned about health and safety aspects of off-farm work, the reported levels of fatigue combined with driving long distances and operating agricultural machinery on the farm, suggest that health and safety is likely to be an issue associated with off-farm work.
The case studies indicate that off-farm work can be a positive development for farm families. The "model for success" appears to include the following:
- farm family feel that the decision to work off-farm is a positive choice on their part, rather than a decision forced on them by circumstances beyond their control.
- farm operation is consciously adjusted to reduce the labour demand on the farm family before off-farm work is begun, so that fatigue and stress are kept at manageable levels.
- and directions for the farm and family are developed by the farm family, and off-farm work is viewed as an aid to achieving these goals.
- family makes a priority of communicating with each other despite time constraints.
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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