Benedetto Rocchi Department of Agricultural and Resource Economics University of Florence

1. Gathering information on total household income within an “industry oriented” survey on agriculture Benedetto Rocchi Department of Agricultural and Resource Economics University of Florence FAO, Rome 12/06/2009

2. Summary • From an agricultural to a rural perspective • Agricultural households in a SAM framework • Structural linkages between industries and sectors at the production unit level • Getting data on THI: an “industry oriented” approach

3. A rural perspective • A focus on agriculture is no longer perceived as suitable in studying rural development • A “rural” perspective asks to study developing processes following a multi-dimensional, multi-sector, dynamic approach

4. Agriculture is still important in rural economies • Agriculture uses the largest part of rural space: country stewardship function • The contribution of agriculture to the economy is concentrated in rural areas • In developing economies farming still plays a fundamental role in livelihood strategies of rural households • Rural Development policy is usually part of agricultural policy

5. Linkages between agriculture and rural economy at the household level • Diversification of family farming towards non-agricultural activities (tourism, food processing) • Family labour allocation between farm and external rural-based activities • Livelihood strategies affects the way households manage farming

6. The SAM framework • “…a comprehensive, flexible and disaggregated framework that elaborates and articulates the generation of income by activities of production and the distribution and redistribution of income between social and institutional groups” (Round, 2003)

7. Agricultural hholds within the SAM framework • Two fundamental ways to disaggregate the economy in a SAM framework • Classifying activities of production by industriesfollowing technical criteria • Classifying institutions by sectorsfollowing socio-economic criteria • The group of agriculturalhouseholds results from crossing a sector with an industry • The proper level to study this structural linkage is the production unit: agricultural holding

8. Agricultural holdings in the SAM framework • Agricultural holding as socio-technical system working as an interface between institutional goals and technical features of the production process • Non-separability between production and consumption decisions For social accounting purposes it becomes necessary to gather joint information on production units and institutions

9. Gathering data on hholds income: “sector” oriented surveys • Shortcomings of LSMS in surveying income of agricultural households • Problems in the quantification of income from self-managed production activities • Technical problems in implementing an “agriculture” module within a multipurpose survey on households (recall period, technical aspects) • Biased sampling of the agricultural households sub-sector

10. Gathering data on hholds income: “industry” oriented surveys - 1 • A supplementary survey on a sampling frame of holdings during the periodical census (FAO, 2005: chapt. 10) to collect data on costs and revenues • A supplementary item to survey “…whether holding is part of an agricultural households” (FAO, 2005: item 0701)

11. Gathering data on hholds income: “industry” oriented surveys - 2 • The technical focus of the survey is likely to support more reliable estimates of mixed income from farming • A good estimate of mixed income could facilitate the valuation of other sources of income through comparison • A sample of holdings properly representing agriculture as an industry also ensure a sample of agricultural households with good statistical properties

12. An example: the ISTAT Farm Business Survey (REA) • A sample of agricultural holdings • Data on gross value added formation in agriculture for national accounting purposes (universe: agriculture as an industry) • Both structural (land and labour use) and economic data • A module for collecting information on total household income

13. A case study for Italy: including holdings accounts in the SAM • The REA dataset have been used to include accounts for agricultural holdings within a SAM of Italian economy for 2002 • Holdings have been classified into three groups: • self-consumption • capital constrained • professional • Households managing agricultural holdings have been classified by income quintiles and by composition of THI (agricultural vs. non agricultural)

15. The agricultural holdings account for Italy (2002, million of €)

16. The distribution of agricultural income in Italy (2002, million of €)

17. Household income nominal multiplier (Italy, 2002)

18. Concluding remarks • The inclusion of a set of questions on THI within questionnaires designed for industry oriented surveys as a “good practice” in a international system of statistics on agricultural households income and wealth • The 2010 Census Programme is an opportunity to test modules on THI for “industry based” surveys • The inclusion of item 0701 in 2010 censuses may represent a useful benchmark for future more specific surveys and should be strongly recommended and possibly tested in some countries

19. Concluding remarks • Design information to gather according to the general purposes of the survey (structural vs. business) and to country-specific features of agriculture • Contextual community-level surveys on markets and prices • Harmonized concepts of income

20. Tank you for attention benedetto.rocchi@unifi.it