[Index]
Are
we measuring farmers’ standard
of living correctly?
Is farm
households’ standard
of living higher than that of
other households?
How do rural
households perform compared to urban
households?
The UNECE, in cooperation with FAO,
OECD, Eurostat and the World Bank, releases
a 590 page Handbook on Rural
Households’ Livelihood and Well-Being:
Statistics on Rural Development and Agriculture
Household Income. The Handbook
is available on the UNECE website at
the following address:
http://www.unece.org/stats/rural/
Below are some of the questions answered
in this Handbook:
Why the urgency for better statistics
on rural areas and farm household incomes?
Large amounts of public
funds are
used to support farmers and their households
in OECD countries. The current round
of multi-lateral trade liberalization
negotiations will almost certainly require
some degree of farm policy reform in
developed – if not developing – countries.
International trade agreements already
point in the direction of the likely
outcome - a requirement that domestic
farm support distorts world markets as
little as possible. To achieve this,
market interventions are often replaced
by direct payments to farm households.
Understanding the ultimate market impacts
of these direct payments depends on having
data on farm households that includes
the farm operation and also all their
other activities. Focus on farm
accounts and business is not sufficient.
Increasing sums are
being spent on rural areas, the livelihoods
and well-being of people who live there,
and conservation of the natural environment.
Agricultural policy reform is likely
to move spending further in this direction.
In the rural areas of developed economies
farms are often no longer the
mainstay of the economy, particularly
in OECD countries. Many of the problems
of farm families can only be addressed
by creating economic opportunities outside
agriculture. Statistics for rural
areas need to go far
beyond agriculture and cover
a wide range of economic, social and
environmental indicators.
Less developed countries, where agriculture
is still relatively important in rural
areas, poverty is a
major policy issue. In such circumstances
income may be displaced as an indicator
by consumption. Nevertheless, household
incomes are seeing changes that move
them towards the patterns observed in
the developed world. Economies in transition
face particular statistical challenges
concerning their agricultures and rural
development.
Accountability is
more than ever a requirement in governance,
in both developed and developing countries.
Objective assessment of the well-being
of a nation’s households is one
obviously important indicator of success.
The condition of the natural environment
is another. For rural areas, these dimensions
of the quality of life are important
in sustaining agriculture but also other
activities such as tourism. The need
to understand the causal linkages between
government actions and economic and environmental
well-being puts renewed emphasis on the
careful selection of indicators and their
policy relevance. Quantification is the
by-word of accountability.
What are the key issues in rural
statistics?
In rural development it is particularly
important to have clear understanding
of what “rural” means
and the geographical areas to
which it is applied (which may range
from the complete region to small local
areas). Good practice includes the use
of various levels to suit the problem
at hand; sometimes the concern will be
a large area (relevant to air quality
for example) while for others (such as
access to transport) something much smaller
might be needed. It is also good practice
to apply a system that covers the entire
territory, so that comparisons
are possible in a flexible way between
rural and non-rural or between rural
areas.
Indicators for the wide range of topics
that rural statistics cover need to be
drawn from many different data sources,
as it is rarely possible to set up anything
new. They must be reliable, timely and
avoid the pitfalls that come with the
need to work with existing data and to
mix sources. The Handbook lists the desirable
features of quality for
indicators.
What are the key issues in agricultural
household income statistics?
Similarly, when measuring agricultural
household income it is necessary
to settle on agreed definitions of
a household, what makes it an “agricultural
household” (for which several
bases of classification are possible)
and how income should be measured.
A concept of an agricultural household
that fits in OECD member countries
is unlikely to be appropriate for many
developing countries. Incomes of self-employed
farmers contain elements that are particularly
hard to value (such as food or fuel
produced and consumed on the farm)
yet which are of importance when comparing
the income situation of agricultural
households with that of other social
groups. The choice by statistical offices
on these fundamental methodological
issues can seriously affect the results.
Are we measuring
farmers’ standard of living
correctly?
The conventional way
of assessing incomes in agriculture has
been by measuring the rewards from farming.
This ignores the fact that many farm
families have multiple
income sources, receiving money
off-farm employment, business profits,
pensions etc. in addition to what they
make from the farm. For many, farming
may be only a minor part of household
income. Measuring profits from farming
alone is clearly inadequate for establishing
the standard of living of farm operators,
for indicating how many are in poverty
or for showing how their disposable incomes
fluctuate over time. Explaining their
savings and investments, and even the
way they use the land, also requires
a broader household view. A new approach
is needed that covers all income
and wealth sources for the complete household.
What statistics that exist on this basis
at national level are patchy, inconsistent
and inadequate.
Are farm households more wealthy
than other households?
The wealth of farm
households has usually been ignored when
assessing their well-being. This is highly
unsatisfactory as, in OECD countries,
farmers as a group are often wealthy
compared to the rest of society. Ways
of measuring wealth and of combining
it with income in a single measure are
considered in the Handbook.
How can we collect better data
on farm household income and wealth?
The provision of data is,
in practice, the most fundamental
problem facing the development
of statistics on the income and wealth
of agricultural households. Without data
the discussion of methodological issues
and identification of good practice loses
much of its relevance. Many OECD countries
do not have a single satisfactory microeconomic
data source, a group that contains several
EU Member States. The Handbook draws
attention to the relative advantages
and disadvantages of survey and censuses
of various kinds and administrative records.
In developing countries surveys of households
are often the only practical sources
of data, their costs also implying that
they must form part of a consistent framework
of surveys.
How does this Handbook help?
This Handbook acknowledges the need
for better data and indicators on
the environment, rural economies and
communities, and, very importantly,
the farm household itself which in
almost all countries is the most numerous
type of farm unit. Present
information is hampered by
large variations in how results
are calculated at national level, offering
the possibility of misrepresentation
and false conclusions. International
standards in statistics for
rural areas and agricultural household
incomes are crucial if meaningful comparisons
are to be made between countries. They
are also important to the establishment
of general patterns that hold true
for a range of countries. The Handbook
helps fill this major information gap
by setting out principles and pointing
to good practice.
By establishing the main elements in
the methodology of statistics on rural
development and agricultural household
income, it is hoped that the Handbook
will assist in identifying the direction
in which methodology and data systems
should be moving, if not the
exact path by which they should get there.
For more information about the publication
please contact:
UNECE Statistical Division
Palais des
Nations
CH-1211 Geneva 10, Switzerland
Phone: +41 (0) 22 917 3328
Fax: +41
(0) 22 917 0040
E-mail: [email protected]
Ref: ECE/STAT/05/P04