Trends in family labour, hired labour and contract work on French field crop farms: The role of the Common Agricultural Policy

Abstract

This paper investigates French field crop farms’ use of various types of labour during the period 1990–2007. We explore the determinants of the three types of labour used on farm (family labour, hired labour and contract labour), with a particular emphasis on the impact of Common Agricultural Policy (CAP) reforms and subsidies on the three labour types. We estimate a system of three equations, including a censored model, using the French Farm Accountancy Data Network (FADN) database.We find that hired labour and contract labour are substitutes as expected, but that hired labour and family labour are complements. This may reveal complementarities between management tasks (which are specifically for the farm head and family labour) and technical operations (the only operations performed by hired labour). In addition, we find that, in general, crop area payments and Single Farm Payments (SFP) have reduced farm labour, while agri-environmental payments, Less Favoured Area (LFA) payments and investment subsidies have increased it. Our results agree with most of the literature that coupled and decoupled area payments reduce labour use on farms.