Economics of Farmer Early Retirement Policy

John Davis (1) , Paul Caskie (2) , Michael Wallace (3)

1 Department of Agricultural and Food Economics
2 Economics
3 Agribusiness

We estimate the structural effects, costs and potential efficiency gains that might arise from the introduction of an Early Retirement Scheme for farmers in Northern Ireland using data from the Farm Business Survey and a separate survey of 350 farmers aged between 50 and 65. Modelling results suggest that farm scale is a significant determinant of profit per hectare but that operator age is not. The economic gains from releasing land through a Scheme were conditional on transfers bringing about significant farm expansion and changes in land use. When these conditions were satisfied pensions payments of only about one-third the statutory maximum could be justified. Survey responses indicated that participation in the Scheme would bring forward farmers' retirement age by an average of four years. Moreover, 'deadweight' payments would equate to about 23 per cent of potential total expenditure. Overall, the economic case for the introduction of an Early Retirement Scheme to Northern Ireland is judged to be weak.

Mots clés: Social Sciences & Humanities

John Davis, Paul Caskie, Michael Wallace. Economics of Farmer Early Retirement Policy. Applied Economics, 2009, 41 (01), pp.35-43. ⟨10.1080/00036840600994211⟩. ⟨hal-00582111⟩