Part II – Agricultural Household Income and Wealth Handbook Chapters VIII to XIV

Part II – Agricultural household income and wealth VIII CONCEPTUAL FRAMEWORK - INTRODUCTION IXTHE AGRICULTURAL HOUSEHOLD – CONCEPTS AND DEFINITIONS XDEFINITIONS OF INCOME XIINCOME DISTRIBUTION AND POVERTY XIIWEALTH XIII INVENTORY OF AGRICULTURAL INCOME STATISTICS XIV FINDINGS AND GOOD PRACTICES

Chapter VIII – Conceptual Framework and Introduction

Chapter VIII – Conceptual Framework - Introduction VIII.1 Matching indicators to policy needs in countries at different levels of economic development VIII.2 Households as economic, social and cultural units and as agents for environmental change and conservation – controllers of resources and users of services VIII.3 Concepts of income and wealth and related indicators VIII.4 Households and other forms of institutional units within accounting and statistical systems

VIII.1 Matching indicators to policy needs in countries at different levels of economic development The “farm income problem” of OECD countries Poverty as a policy problem VIII.1.1 Types of income and wealth statistics needed (IAHS as guide)  Levels, compositions, distributions, comparisons with other groups  Parallel statistics on wealth

VIII.2 Households as economic, social and cultural units The most common institutional form in agriculture Units that both produce (agricultural and other activities) and consume Important agents of environmental character and change “Family farm” a politically weighty concept but not precisely defined “Triple bottom line” must be respected

VIII.3 Concepts of income and wealth and related indicators Statistics need to be based on appropriate concepts and for these to be operationalised correctly Wrong concepts will lead to poor information Total income, disposable income, net worth and economic status have roles to play Comparisons with other socio-professional groups require particular care

VIII.4 Households and other forms of institutional units within accounting and statistical systems Accounting frameworks  Aggregate (e.g. UN’s System of National Accounts – SNA93)  Microeconomic (e.g. Canberra Group recommendations, FADN/RICA) Different definitions of terms (e.g. disposable income)

VIII.4 Households and other forms of institutional units within accounting and statistical systems Accounting basis  Activities (e.g. for agriculture in NACE, ISIC)  Institutional units (households, corporations etc.)  SNA allows for both Complete sequence of accounts (and balance sheets) possible for accounts for households

Activity and institutional units HOUSEHOLDS - AGRICULTURAL OTHER HOUSEHOLDS REAL INSTITUTIONAL UNITS Mixed income (Operating surplus) of agricultural LKAUs Other income from independent and dependent activity, transfers etc. CORPORATIONS OTHER Entrepreneurial income from agricultural activity Other EI Kitchen gardens

VIII.4 Households and other forms of institutional units within accounting and statistical systems Complete sequence of accounts (and balance sheets) possible for accounts for households – balancing items include disposable income Activity accounts well established  aggregate Economic Accounts for Agriculture  Microeconomic FADN/RICA)

VIII.4 Households and other forms of institutional units within accounting and statistical systems Accounts and income measurements for agric. households not well established  Aggregate Eurostat IAHS statistics  Microeconomic – only some countries and no harmonised methodologyNon-agricultural  Household budget surveys  Tax data

VIII.5 Where we are in the provision of income indicators for agric. households Increasing awareness that lack of (micro) income statistics (and wealth) is a gap (EU Court of Auditors report 2003, OECD) Need to consider appropriate definitions (income, household, agricultural household etc.) and make recommendations Need to explore what statistics are currently available Need to explore data sources