Factors influencing off-farm employment and land-use intensity in Korea : a simultaneous equations approach
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Major policy issues in Korea pertain to increases in domestic food production though intensive land use, and the improvement of farm household income by enhancing off-farm employment. This study examined the interrelationships between off-farm employment participation and land use cropping intensity. A farm survey of 3,333 farm households and secondary data were used. An integrated model of off-farm work activities and land-use intensity determination was developed. The statistical models used were a single equation regression model to estimate farm earnings function, and a simultaneous equations model contained one qualitative dependent variables to estimate a joint determination of off-farm employment and land-use cropping intensity functions. Two statistical estimation methods -- the two-stage least square (2SLS) analogue and the iterative nonlinear three-stage least square (NL3S) estimations -- were applied to estimate a simultaneous equations model. As measures of land-use intensity, the land equivalent ratio and the multiple cropping index were used. Major finding from the analyses are as follows: The results from the statistical estimation show that off-farm employment participation is negatively (statistically significant) related to farm earnings. In other words, trade-offs exist between farm earnings and off-farm employment. Also, a strong positive relationship between land-use cropping intensity and farm earnings were observed. Simultaneous equations estimations, compared to single equation estimation, provided a stronger negative interrelationship between land-use cropping intensity and off-farm employment participation. The simultaneous estimation results confirmed the consistency of the model developed for this study. In conclusion, two important policy issues presently pursued by Korean agriculture -- improvement of farm income through off-farm employment and increases in food production by intensive land use -- contain inherent goal conflicts between them. Potential policy measures that can minimize the conflicts are increased resources devoted to farmers education and farm mechanization activities.
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