DETERMINANTS OF PART-TIME FARMING AND ITS EFFECT ON FARM PRODUCTIVITY AND EFFICIENCY

Little attention has been given in the agricultural economics literature to the impact of off-farm work on farm productivity and efficiency. More knowledge about what determines part-time farming and whether farm productivity and efficiency are affected by part-time farming could help policy makers introduce better targeted rural development policies. This paper aims to fill the above-mentioned gaps by first analysing factors that influence the choice of off-farm work; and then examining how off-farm work influences productivity and technical efficiency at the farm level. An unbalanced panel data set from 1991 to 2005 from Norwegian grain farms is used for this purpose. The results show that the likelihood of off-farm work and the share of time allocated to it increase with increasing age (up to 39 years), and with low relative yields (compared to others farms in the surrounding area/region). The level of support payments is not significantly associated with the extent of off-farm work. Large-scale farms and single farmers tend to have a lower likelihood of off-farm work. Average technical efficiency was found to be 79%. Farmers with low variability in farm revenue were found to be more technically efficient than farmers with high revenue variability. We did not find any evidence of off-farm work share affecting farm productivity − the predicted off-farm work share was not statistically significant. In other words, we did not find any systematic difference in farm productivity and technical efficiency between part-time and full-time farmers.