Name

PARALLEL EMPLOYMENT

Brief definition

The percentage of Off-farm Income as a percentage of the Total Family Income (Family Farm Income plus Off-Farm Income)

Unit of measure

%

Type of Indicator

Driving Force

Objective

The indicator contributes to the definition of the socio-economic context of the area affected by desertification.

Importance with respect to desertification

There is a strong interdependence between poverty and degradation of natural resources. Poverty is a multidimensional phenomenon, characterized by a multitude of factors such as a deficiency in the enjoyment of human rights, a lack of sufficient income, a lack of power (i.e. lack of information, knowledge, participation in the political decision process), a lack of social integration and a lack of access to social services. The integration of the family members in the external labour market can be seen as a tool to avoid this negative interdependence in marginal areas. Many studies conducted in poverty-stricken rural areas show that agricultural activity, when it is the only source of income for the family, can accentuate the environmental degradation already present in these areas, by irreversibly exploiting the land. The off-farm labour opportunities provide the possibility of remaining on the land with better guarantees for the control of the territory in terms of resource preservation.

International Conventions and agreements

The UNCCD emphasized the importance of the measures to improve the economic environment with a view to eradicating poverty, increasing incomes and employment opportunities, especially for the poorest members of the community.

Secondary objectives of the indicator

This indicator, at both national and sub national levels, represents a fundamental indicator for decision- makers. The economic well-being of the household is clearly more dependent on what is happening to the economy in general than by the situation in agriculture, and supporting agriculture could be a particularly ineffective way of targeting these households.

Definitions and basic concepts

Off-farm income includes both earned and unearned sources, such as other employment (employment and self-employment), investments, pensions and social payments

Family Farm Income (FFI) is the residual remaining to the farmer and the other unpaid labour of the household after the deduction of interest payments, rent payments and the cost of remunerating paid hired labour. It represents the reward to the farmer and his/her family for the use of their own land, own capital and personal labour in agricultural activity on the farm.

Benchmarks Indication of the values/ranges of value

I° range: < Local Mean -St. Dev.
II° range: >Local Mean - St. Dev. < Local Mean
III° range: > Local Mean < Local Mean + St. Dev.
IV° range: > Local Mean + St. Dev

Methods of measurement

The ratio between Off-Farm Income and the Total Family Income, sum of Family Farm Income plus Off-Farm Income

Following the EU FADN explanatory note:

Family Farm Income (FFI) corresponds to farm net value-added, less other real costs in the accounting year: interest and financial charges, wages and social security costs paid and rent. The Farm Net Value-Added (FNVA) is the total output less intermediate consumption and depreciation, adjusted to take account of taxes, grants and subsidies linked to production. The FNVA is an indicator of the economic performance of the holding. It remunerates family and hired labour, own and borrowed capital and the management of the holding.

Limits of the indicator

The impact of non-farm income is not uniform across the enterprise types. In particular, dairy farming is relatively labour-demanding and exacting in time requirements, restricting the capacity for off-farm activity, so that the total income of farm households may be low, even where farming incomes are relatively high. Conversely the total incomes of large crop farms are often high because other activities are carried out in parallel, though this form of farming may not be particularly profitable (Hill, B., 2000).

Linkages with other indicators

EU production subsidies, Gross Margin

Data required to calculate the indicator

Off-Farm Income, Family Farm Income

Data sources

EUROSTAT, Direct Inquiry

Availability of data from national and international sources

FADN, EUROSTAT

Main institutions responsible

University of Basilicata, Italy

Other contributing organizations

Universities of Athens, Lisbon, Murcia, Basilicata

Bibliography

Quaranta, G. - Salvia, R. (2000): Peasant Agriculture and part-time farming: use of resources and landscape effects in a rural area of Southern Italy, Medit n° 1

Other references

Hill, B. (2000): Agricultural Incomes and the CAP

Contacts Name and address

University of Basilicata
Prof Giovanni Quaranta
email: quaranta@unibas.it