Income Diversification in Norwegian Farm Households

Abstract

Many farm households rely on income from multiple sources, a phenomenon known as pluriactivity. The present survey investigates whether this is a deliberate strategy rather than a situation forced upon the farm household by external conditions. This study explores the relationship between four income diversification strategies reported by farmers and household income. Data from a representative random sample of 901 Norwegian farm households is analysed using multiple regression. External employment and holding additional non-farm-related businesses is significantly positively related to household income. This shows that diversification into other economic sectors has a positive effect on income. Moreover, diversification within the farm sector has no effect on household income. The findings imply that future policy should consider pluriactivity as a deliberate strategy contributing to farm family wealth.

Keywords

farm households income diversification pluriactivity portfolio entrepreneurship

Get full access to this article

View all access options for this article.

References

Baines, S. and Wheelock, J. (1998) ‘Working for Each Other: Gender, the Household and Micro-Business Survival and Growth’ , International Small Business Journal 17(1): 16-35 .

Birley, S. and Westhead, P. (1993) ‘A Comparison of New Businesses Established by Novice and Habitual Founders in Great Britain’ , International Small Business Journal 12(1): 38-60 .

Carter, S. (1996) ‘The Indigenous Rural Enterprise: Characteristics and Change in the British Farm Sector’ , Entrepreneurship and Regional Development 8(4): 345-358 .

Carter, S. (1998) ‘Portfolio Entrepreneurship in the Farm Sector: Indigenous Growth in Rural Areas?’ , Entrepreneurship & Regional Development 10(1): 17-32 .

Carter, S. and Ram, M. (2003) ‘Reassessing Portfolio Entrepreneurship’ , Small Business Economics 21(4): 371-380 .

Carter, S. and Rosa, P. (1998) ‘Indigenous Rural Firms: Farm Enterprises in the UK’ , International Small Business Journal 16(4): 15-27 .

Carter, S. , Tagg, S. and Dimitratos, P. (2004) ‘Beyond Portfolio Entrepreneurship: Multiple Income Sources in Small Firms’ , Entrepreneurship & Regional Development 16(6): 481-499 .

Cochrane, W. W. (1979) The Development of American Agriculture: A Historical Analysis. Minneapolis: University of Minnesota Press .

Djurfeldt, G. and Waldenström, C. (1999) ‘’Mobility Patterns of Swedish Farming Households’ , Journal of Rural Studies 15(3): 331-344 .

10.

Eikeland, S. and Lie, I. (1999) ‘Pluriactivity in Rural Norway’ , Journal of Rural Studies 15(4): 405-415 .

11.

Frankfort-Nachmias, C. and Nachmias, D. (1996) Research Methods in the Social Sciences. New York: St Martin’s Press .

12.

Fuller, A. M. (1990) ‘From Part-time Farming to Pluriactivity: A Decade of Change in Rural Europe’ , Journal of Rural Studies 6(4): 361-373 .

13.

Gasson, R. , Crow, G. , Errington, A. , Hutson, J. , Marsden, T. and Winter, D. M. (1988) ‘The Farm as a Family Business: A Review’ , Journal of Agricultural Economics 39(1): 1-41 .

14.

Hair, J. F. J. , Anderson, R. E. , Tatham, R. L. and Black, W. C. (1998) Multivariate Data Analysis, 5th edn. Upper Saddle River, NJ: Prentice Hall .

15.

Hall, P. (1995) ‘Habitual Owners of Small Businesses’, in F. Chittenden , M. Robertson , and I. Marchall (eds) Small Firms: Partnerships for Growth, pp. 217-230. London: Paul Chapman Publishing .

16.

Jervell, A. M. (1999) ‘Changing Patterns of Family Farming and Pluriactivity’ , Sociologia Ruralis 39(1): 110-116 .

17.

Kinsella, J. , Wilson, S. , De Jong, F. and Renting, H. (2000) ‘Pluriactivity as a Livelihood Strategy in Irish Farm Households and its Role in Rural Development’ , Sociologia Ruralis 40(4): 481-496 .

18.

McGrath, R. G. (1996) ‘Options and the Entrepreneur: Toward a Strategic Theory of Entrepreneurial Wealth Creation’ , in Academy of Management Proceedings, pp. 101-105 .

19.

MacMillan, I. C. (1986) ‘To Really Learn about Entrepreneurship, Let’s Study Habitual Entrepreneurs’ , Journal of Business Venturing 1(3): 241-243 .

20.

Organisation for Economic Co-operation and Development (2003) Farm Household Income: Issues and Policy Responses. Paris: OECD .

21.

Rosa, P. and Scott, M. (1998) ‘Portfolio Entrepreneurs: Empirical Evidence on the Multiple Ownership and Control of SMEs and its Implications for Start-up and Growth’, in R. Donckels and A. Miettinen (eds) Entrepreneurship and SME Research: On its Way to the Next Millennium, pp. 113-127. Aldershot: Ashgate .

22.

Scott, M. and Rosa, P. (1996) ‘Opinion: Has Firm Level Analysis Reached its Limits?: Time for Rethink’ , International Small Business Journal 14(4): 81-89 .

23.

Studenmund, A. H. (1997) Using Econometrics: A Practical Guide, 3rd edn. Reading, MA: Addison-Wesley .

24.

Wright, M. , Westhead, P. and Sohl, J. (1998) ‘Editors’ Introduction: Habitual Entrepreneurs and Angel Investors’ , Entrepreneurship Theory and Practice 22(4): 5-21 .