Details

Autor(en) / Beteiligte

• Hertz, Tom

Titel

effect of nonfarm income on investment in Bulgarian family farming

Ist Teil von

• Agricultural economics, 2009-03, Vol.40 (2), p.161-176

Ort / Verlag

Malden, USA: Blackwell Publishing Inc

Erscheinungsjahr

2009

Quelle

Wiley Online Library - AutoHoldings Journals

Beschreibungen/Notizen

• This article documents a relationship between nonfarm income (primarily earnings and pensions) and agricultural investment in Bulgaria, specifically, expenditures on working capital (variable inputs such as feed, seed, and herbicides) and investment in livestock. Among those with positive spending on farm inputs, the estimated elasticity of these expenditures with respect to nonfarm income is 0.14. Nonfarm income also has an effect on the number of households that purchase farm animals, with an estimated elasticity of 0.35. The use of nonfarm income for farm investment is consistent with the presence of credit constraints, as is the fact that less than one percent of farmers report outstanding debts for agricultural purposes. Yet many farm households take out large unsecured loans for other purposes, primarily to cover consumption expenditures, implying that credit is available, but that farmers prefer not to use borrowed funds to finance agricultural investment. This would suggest that increases in the availability of agricultural credit may have little effect on farm outcomes, whereas increases in nondebt-financed sources of liquidity, such as subsidies or transfers, may better stimulate investment.