Research Reports
An Analysis on Lower-Income Earning Farm Households' Economy
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AuthorPark, Joonkee
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Publication Date2005.04.01
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Original
The purpose of this study is to investigate economic situations and income of lower-income earning farm households with Farm Household Economy Survey Data in 1998~2003. In this paper, we analyzed the cross-section data in 2003 and the panel data of 2,348 identified farm households during 1998~2002.
Lower-income earning farm household can be defined as the farm household whose income is below 120% of the minimum cost of living annually published by the Ministry of Health & Welfare. In contrast, the high-income group is the top class among the 5 divided income brackets. According to the above definition, nearly 15% of whole farm households are classified into the low-income earning households in 2003.
In order to understand the cause of low income, we categorize the farm households with the fame size, the age of farm manager and farming type, and also divide income and expenditure by means of origin and use respectively.
The results of this study are summarized as follows. First, low-income farm households' economy mainly depends on non-farm income and transfer receipts rather than farm income in contrast to the high-income class. Second, the low-income households' average income is about half of their consumption expenditures. Conversely the high-income farm households' income is 1.6 times more than their expenditures.
Third, among the low-income farm households, some households that are managed by relatively young farmers and have over-average farming size must be motivated to increase profitability by systematic farming scheme and usage of accurate informations. On the other hand, the other households that are managed by elderly farmers and have below-average farming size must be subsidized with public aids and induced to retire from farming, which can accelerate the enlargement of farming size.
Finally, the analysis of panel data show that the rate of farm households which experienced lower-income situation over 4 years during 1998~2002 come to 5.7%. About 67% of these households have a small farming size below 1ha and 86% of them are managed by elderly farmer over 60 years old. Besides, during above 5 years, 2.3% of the whole farm households have been in the lower-income group every time.
Researchers: Joon-Kee Park, Eui-Sik Hwang and Han-Pil Moon
E-mail: jkpark@krei.re.kr
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