Living Standards Measurements Study - Serbia 2002 - 2007

10.3.3. diversification of income and
activities of members of
agricultural households
Diversification of income of agricultural
households represents a precondition for
diversification of activities and reduction in their
poverty because it reduces the high income risk of
agricultural population in extensive agricultural
production. The income structure indicates that
income from agriculture does not represent a
crucial factor for classification of agricultural
households by quintiles of consumption, but income
from other sources (Graph 11). Data on differences
in amount of agricultural income between the
richest and poorest that are relatively small supports
this conclusion. Monthly income from agriculture of
the richest and poorest agricultural households is
1:2.6 (6 062 dinar compared to 15 751 dinar), while
the ratio between their salaries is 1:3.3 (9 251 dinar
compared to 31 547 dinar).
The data above shows that there is
disproportional relation between the employed in
agriculture (49 percent) and the share in total
household income (20 percent), indicating low
agriculture productivity. LSMS does not provide
reliable data on agricultural income structure (share
of income from the sale of agricultural products,
machinery services, day wages, sale of processed
agricultural products and handicrafts products,
etc.)3F4 . But based on the previous surveys (Bogdanov
N. 2007.) it is well-known that income generated on
farms is diversified to certain extent, due to which
(especially smaller farms) are exposed to greater
income risk4F5 .
The great importance of income diversification
for the standard of living of the rural population is
confirmed also by data regarding the diversification
of activities of members of agricultural households.
Farms with member that are 15+ employed only in
the agricultural sector are exposed to a high poverty
risk. Among farms that are below the poverty line,
72 percent are those whose able-bodied members
(15+) are active only in the agricultural sector
(Graph 12).
Data on the activities of members of
agricultural households indicates that 60 percent of
members aged 15+ are equally active in agricultural
and non-agricultural activities. Agricultural
households have a lower unemployment rate and
non-self supporting members compared to nonagricultural
households (Table 3.). The reason for
the relatively more favourable labour indicators of
members of agricultural households comes from the
definition of employment that also includes the
unpaid labour force. The high employment rate in
agriculture, such as in Serbia, causes labour market
indicators in rural areas and in agricultural
households have better values.
Graph 10.11. Income of agricultural households by quintiles of consumption
27 27 28 27 27 27
Other incomes
20 19 18 18 22 21
Income from agriculture
17
24
19 17
14
11
Pensions (old age, family,
disablement and other)
37
29
35 39 37 42
Wages and salaries
The poorest 2 3 4 The richest
Total
Quintiles of consumption
144 Living Standards Measurements Study - Serbia 2002 - 2007