Establishment of comparison groups in income comparisons between different population groups

In this connection, income comparisons between the farm population and other popu-lation groups refer to comparisons between the incomes of farm families, wage earn-ers and small-scale entrepreneurs. Establishment of the comparison groups means

the delimitation of the population groups to be included in the comparison, as well as of the unit for comparison. In the Agricultural Income Acts in the 1980s (ANON.

1982a, 1984b, 1986e, 1989d) reference is made to rationally managed farms that provide full employment for the farm family, and, in the case of wage eamers, to skilled industrial workers. Consequently, Agricultural Income Acts refer to agriculture based on family farms, which is typical in Finland (on the concept family farm see e.g. TORVELA & MÄKI 1974 and HEIKKILÄ 1984). In this study family farms mainly refer to farms owned by natural persons, the incomes of which can be deter-mined on the basis of the income data of agriculture and forestry (TOLVANEN 1985, p. 197-231, PUURUNEN 1987b, p. 133-143, 1989, p. 48-62).

Farm groups in which the agricultural labor input of the farm family corresponds to full employment of the farmer and spouse, according to the annual 1860 working höurs, are considered farms that provide full employment for the farm family (TOLVA-NEN 1985, p. 175-183, PUURU(TOLVA-NEN 1987b, p. 133-137, 1989, p. 48-51). It has been possible to delimit farms providing full employment from the Enterprise and Income Statistics of Agriculture and Forestry by means of the Agricultural Labor Input Statis-ties (ANON. 1988e) only according to the region and the farm size class. In order to determine the labor input of the farm family in different production Iines, statistical studies conceming various sources of data have been made (TOLVANEN 1985, p. 41-49, 55-59, PUURUNEN 1986). According to the production line, farms providing full employment have been determined by means of the joint lists of samples used in the Enterprise and Income Statistics of Agriculture and Forestry and in the Labor Input Statistics, as well as of the data on labor input from the bookkeeping farms. These separate studies have been made conceming the years 1981 and 1984. Most crop producing farms have been excluded from the comparison groups established on the basis of full employment.

Another approach for income comparisons based on the Agricultural Income Acts is provided by farms on which, according to the data on the incomes of the farmer and spouse, agriculture and forestry form the principal source of living, defined as the minimum of 75 of the total income of the farmer and spouse. In the 1980s about 40 % of farms owned by natural persons have been counted to this category of full-time farms, which includes crop producing farms, too (TOLVANEN 1985, p. 184-191, PUURUNEN 1987b, p. 138-143, 1989, p. 51-62).

The Agricultural Income Acts comprise also a reference to rationally managed farms. As a concept, rational management of a farm is the sum of several factors that partly have to be evaluated subjectively (TOLVANEN 1985, p. 169-174). In this study it has been possible to take rational management into account in establishing the comparison groups only indirectly, by means of data on labor input, farm size, tum-over, etc. In the comparison groups it has been possible to take rationality into account by comparing their results with the corresponding results on the bookkeeping farms of the Profitability Study of Agriculture (PUURUNEN 1987b, p. 141-143, 1989, p. 52-55). In this study full-time farms owned by farmers over 65 years of age as well as groups of small farms that, due to the average number of animals and production technology typical of their size, cannot provide full employment or the main source of income for the farmer and spouse are excluded from the income comparison. An attempt has been made to apply as uniform criteria as possible for making delimita-

tions concerning both crop and livestock producing farms. The subjectivity that is necessarily involved in the delimitations has been avoided by making several income comparisons in the case of some critical farm groups (PUURUNEN 1989, p. 55-62).

Agricultural Income Acts in Sweden and Norway also refer to the rational manage-ment of farms. In Sweden income comparisons concerning different population groups are mainly based on the Swedish Income Distribution Statistics (Inkomstfördelningsun-dersökningen, HINK), and they include ali farms with 20-100 hectares arable land and ali farmers who are 20-64 years of age. The income studies within the farm population based on the data on taxation (Deklarationsundersökningen, DU) and on the Profitabil-ity Study (Jordbruksekonomiska undersökningen, JEU) also concern farms with 20-100 hectares arable land for the part of the farm size classifications according to arable land area (e.g. ANON. 1989c, p. 22, 30, 50). In income comparisons in Norway the rational management of agriculture has been taken into account in preparing the farm models that form the basis for the comparison (ANON. 1979, 1985c). In Agricul-tural Income Acts in Sweden and Norway, more emphasis is laid on examining the standard of living, whereas in the income concepts under comparison, based on the Agricultural Income Acts in Finland, are more narrow, and, indirectly, the comparison groups are determined more accurately.

Another comparison group in this study are skilled industrial workers, determined mainly on the basis of statistics on the standard wage rate. In the Wage Statistics (ANON. 1987d), full-time and part-time workers, except for trainees and students, are included in industrial workers. Delimitations and income variations concerning indus-trial workers have been examined more in detail in the earlier studies (e.g. TOLVA-NEN 1985, p. 135-145 and 195-196). In income comparison concerning agriculture, the farmer and spouse on the one hand, and a single industrial worker on the other, form an income earner unit. Income comparisons concern incomes calculated per person, which means that the agricultural income per farm has been divided equally by the average number of farmers and spouses in the farm group.

In this study the primary income and available income of the farm population have also been compared with the corresponding incomes of small-scale entrepreneurs, in addition to those of industrial workers (TOLVANEN 1985, p. 232-239, PUURUNEN 1987b, p. 144-152, 1989, p. 67-75). In these income comparisons it has been possible to delimit the comparison groups more freely, although in this case, too, the delimita-tion is tied to the groupings available in the statistics. In the comparison based on the Income Distribution Statistics, a household forms an income earner unit. In this case comparison groups have .been delimited on the basis of the profession or trade of the head of the household. The size and composition of households are central in income comparisons. In this study the size of households has been taken into account in the comparisons of primary incomes by calculating incomes per economically active per-son, and in the comparisons of disposable incomes by calculating incomes per con-sumer unit.