The Demand for Home‐Produced Food by Rural Families

Abstract

consumption in 1965 was only $66 for the 33% of the households engaged in this activity (USDA, p. 7). However, interest in home food production has increased sharply in recent years. Some 44% of all households had a vegetable or fruit garden in 1976 (Kaitz, p. 20). Home production has remained an important source of food for many rural families and is for some the dominant food source. A survey of rural families in 1971 found the average family produced $124 of food at home per year at retail value. Some 60% of the families surveyed produced at least some food for home consumption with an average value of $206 per year for producing families. The value of home-produced food was as high as $1,868 for one family. The role of home food production in satisfying rural family food needs has definite policy implications. The widely used Orshansky poverty index, which is based upon the minimum income a family needs to obtain an adequate diet, takes account of the amount of food households raise for themselves. The poverty threshold for farm families was set at 70% before 1969 and is currently set at 85% of the nonfarm threshold for each family type. This differential is based on the assumed cost savings from home-produced food. A federal technical committee in 1973 recommended that the farm-nonfarm distinction be dropped, however, arguing the questionable appropriateness of singling out income differences in this single factor alone (HEW, p. 90). Most welfare programs take no account of home food production. Even the food stamp program ignores the implications of homeproduced food. Program participation is significantly lower in rural areas, though, and home food production may be a partial cause. The traditional theory of consumer behavior is inadequate for the present analysis since home-produced food is a nonmarket commodity that has no explicit price and requires a large time input on the part of the household. For the latter reason, the opportunity cost of time of the family members and the productive efficiency of the household are important factors. Becker's household production model reformulation of conventional demand theory offers an appropriate analytical framework under these circumstances. Within the household production approach, this study estimates three specifications of the demand function for home-produced food using a 1971 cross-sectional data set for rural families. The equations are estimated with ordinary least squares, weighted least squares, and, finally, with Tobit analysis.