Determinants of off-farm income and its local patterns: A spatial microsimulation of Dutch farmers

Abstract

Apart from their contribution to the local economy in terms of input, output and employment, farmers also play a major role in shaping and maintaining our (natural) environment and landscapes. However, with the (planned) decrease in agricultural subsidies, these activities are at risk. For that reason, it would be useful when farmers could benefit from rural development subsidies as well. An important link between farm households and the rural economy is through income from off-farm employment.Therefore, the aim of this research is to get more insight in how household, farm and spatial characteristics determine the share of off-farm income and how they affect spatial patterns of farmers that can benefit from it. However, this requires detailed spatial information about farm and related household characteristics. Therefore we developed SIMfarm, a novel combination of spatial microsimulation with GIS techniques, to provide the necessary information at the micro-level. The relevance of this study is that it gives a picture of off-farm income at the municipality level, based on individual behaviour in the context of the spatial situation.SIMfarm shows that the local pattern is mainly affected by the type and scale of the agricultural activities, as well as the accessibility of jobs. The household characteristics are least distinctive for the spatial patterns. The farmers that benefit most from off-farm job opportunities are the ones close to the larger cities, as well as the ones in the regions where the farmers are younger and where they are often involved in dairy or arable farming. But, in areas where the landscape is dominated by large-scale dairy farms with little access to jobs, a low level of off-farm income can be found. However, especially the arable and dairy farms are currently receiving a relatively large amount of agriculture payments from the EU.