11.5 Farm and household incomes and their relation to farm size

Information on farm and household incomes is very scarce in Syria. Official sources provide estimates only of average production costs and profits of different crops, but they are based on standard assumptions on input use and yields, not verified by realized figures. The discussion below draws on two small surveys conducted in 2001. A small survey of farms in Hassakeh and Lattakia (Shahaideh et al., 2001) reports a large variation in agricultural incomes. Interestingly, returns to family labour per worked day are generally above the current agricultural wage levels, which suggests that structural constraints, and not inefficiency, are the main reason for income differentials. And indeed, the main determinants of net farm incomes are - not surprisingly - farm size, the type of farming, the farm being irrigated or not, and land tenure. Household per capita incomes, by contrast, are in general lower than the national average. In Lattakia, where small farms prevail, the overall household income crucially depends on the amount of off-farm income, which seems to be mainly determined by job availability. In Hassakeh, total household incomes are more homogeneous across households, and the per capita value mainly depends on the number of children. It is obviously unreliable to make general inferences from few case studies, but the above results are indicative of prevailing conditions.

The intention of the government policies over the past two decades has been to benefit the smaller and poorer members of the agricultural producers. It is difficult, however, to assess the impacts of any policies in the absence of any household level survey information. For this reason, a small survey of 100 households selected in a representative way in five of the most representative Mohafazat in Syria^[83] was undertaken. Of these households 49 farmed in zone one, 36 in zone two and 19 in zone three. The full results of the survey are reported in Sarris, 2001. Here are some highlights of the results.

a) General household structure

Table 11.16 shows the distribution of sampled households according to both the land cultivated as well as the per capita annual consumption expenditures of the household. The per capita household expenditure is a much utilized and acceptable proxy for the total income level and welfare of the households. According to the unpublished results of the Syrian national household survey (NHS) of 1996-1997, the average annual total per capita consumption expenditure for the whole of Syria was SP25 140 (average in urban areas: SP26 688, in rural areas: SP23 616).The consumption classes of the NHS have been used for tabulating the results of the small survey reported here. According to the results, reported in Table 11.16, 60 percent of the surveyed households had per capita total yearly expenditure levels below SP20 000, and only 7 percent of surveyed households had annual per capita consumption expenditures above SP40 000.

This suggests a rather skewed income distribution of rural households. The average per capita total annual consumption expenditure for the whole of the sample was SP24 582, which is 4 percent larger than the average reported in the NHS for rural areas. This average is not statistically different than the NHS figure for 1996-97, and suggests that there has not been much change in average household incomes and expenditures in the last few years, despite the drought.

Table 11.16 Sampled households by farm size (cultivated land) and consumption classes

Source: Farm household survey 2001.

From the cross-classification of expenditure classes with cultivated area, cultivated land size is imperfectly correlated with total expenditure (and hence income) of the households. Almost all the households with farm size less that 1 ha belong to the three lowest expenditure classes, while all households with land area above 50 ha belong to the three highest expenditure classes. For the other households the picture is more mixed.

Fifty-six percent of the households chiefs surveyed reported being members of a cooperative, but the percentage varied according to income class and farm size. Among smaller income classes and farm sizes, more than two-thirds of chiefs are cooperative members, while in the higher income and farm size classes, less than one-third belong to cooperatives. Seventy-two percent of the interviewed farmers had agriculture as main job, while another 13 percent had their main employment in the public sector.

Table 11.17 shows the amount of time spent on farm activities. Fifty out of 87 farm heads who responded (or 57 percent) spent more than eight months of their time on farm activities, while 21 percent spent less than two months on farm activities. Agriculture seems to be the major activity of most farmers in Syria.

Table 11.17 Allocation of time to their farm by household heads

Source: Farm household survey 2001.

b) Household welfare

The survey included a variety of questions relevant to household welfare. Table 11.18 indicates that 48 percent of the interviewed households had income they perceived not enough to cover the bare necessities of life, while another 37 percent had incomes enough to cover only bare necessities. Only 14 percent of households declared that their incomes were adequate or above.

Table 11.18 The perceived real income situation of agricultural households in Syria

Source: Farm household survey 2001.

In the NHS in 1996-97, the average per capita monthly expenditures on food was reported to be SP1 253 for the whole country, SP1 184 for rural areas and SP1 322 for urban areas. For total expenditures, the average monthly per capita expenditures for the whole of Syria was SP2 095, while it was SP2 224 for urban areas and 1968 for rural areas. In our sample, the average per capita monthly expenditure on food for all households was 1 353, which given the four years that have elapsed, suggests that the sample is broadly representative of Syrian rural households. However, the averages were very different by household classes. For the poorest class (those with per capita total monthly expenditure less than SP833), the average spent on food was only SP495, while for the richest class (those with per capita total monthly expenditure more than SP8 300), it was 9 250, i.e. more than 20 times higher. Clearly, there are substantial inequalities within the rural farm households.

Of the farmers interviewed, 69 percent of all households report that farm income is their most important source of income, and this proportion does not appear to be smaller for smaller or poorer farmers. This manifests the importance of farm incomes among farm households in rural areas.

c) Land cultivation and production of strategic crops

Table 11.19 exhibits the average total arable and orchard land cultivated by different classes of households, as well as the average amounts of irrigated land. It can be noticed that, as expected, wealthier households cultivate on average more land, but also, and this is important for policy, they have considerably more irrigated land, both absolutely, as well as a proportion of their total cultivated land. This is important as it implies that irrigation related policies, and in particular irrigation subsidies, impact relatively more the wealthier farm classes^[84]. It can also be noted that the majority of farmers own their land, much like was indicated earlier for the whole of Syria.

Sixty of the respondents indicated that they had one or more wells, with 38 of them reporting having only one well, while the rest had more than one. Of these wells, only 37 were licensed during the time of the survey in mid-2001. Of the 80 respondents who answered the question, only 17 indicated that they had obtained irrigation from a government project during the past year, and all of them were from the lowest three income or farm size classes. Of these, half were not satisfied with the government irrigation services. Another 15 farmers indicated that they had bought irrigation services from neighbours, and irrigated an average of 3.7 ha with this water. The average amount paid for this irrigation was SP46 800 during the past year, which amounts to SP12 650 per irrigated ha. This indicates first that there is considerable private trading in irrigation water, and also that the private market price for irrigation water is far above what the government charges.

Table 11.19 Cultivation of rainfed and irrigated land by household classes

* including olive trees and vineyards.
Source: Farm household survey 2001.

Table 11.20 indicates the amount of wheat produced on irrigated and non-irrigated land, as well as the amount sold to Government agencies.

Table 11.20 Cultivation of wheat according to household income and farm classes

Source: Farm household survey 2001.

Of the total farmers surveyed, 74 produced wheat. Of these, 44 had some irrigated wheat land and 34 had some rainfed land. The average total production from irrigated land was 74.5 tonnes, but it varied considerably from 4.8 tonnes for the smallest farms to 416 tonnes for the largest ones. Of the total number of producing farmers, only 48 sold wheat to the Government agency, and the average quantity sold per selling farmer was 66.9 tonnes, with substantial variations by farm size or income class. The smallest farms sold nothing to the Government, while the largest size farms sold to the Government an average of 482.2 tonnes. Given that wheat is one of the most subsidized crops, it is clear that the incidence of the benefits is highly skewed, with the largest and richest farmers obtaining the bulk of the benefits.

Table 11.21 presents the same type of information for cotton. It is also apparent that there is extreme skewing of the amounts sold to Government. Benefits from price support clearly accrue more to the largest farmers.

Table 11.21 Cultivation of cotton according to farmer income and size classes

Source: Farm household survey 2001.

d) Services and inputs used and production prospects

Almost all surveyed households (96 percent) were regularly visited by extension agents. The average number of times each farmer was visited was 6.8. Ninety seven percent of the farmers requested help from extension in the past year, and the average number of times help was requested was four. Sixty three percent of the interviewed farmers found the extension services very useful, and 17 percent said that they changed crop practices because of advice from extension.

Of the total number of farmers, 72 percent utilized fertilizer of all three types (nitrate, urea, phosphate), but only 36 percent said that their main source of supply was the ACB. The larger farmers had permanent workers, while all sizes of farmers hired some temporary labour, with the larger farmers hiring more.

The farmers of the sample made a variety of investments in the course of year 2000. The major type of investment was to pay for children’s education. The second most popular investment was to buy tree seedlings, and this implies the perceived profitability of fruit trees. Apart from these, the only other frequent investment was house improvements or purchase. Loans were used for 13 out of the 34 investments in tree seedlings, one out of five investments in livestock, and by the only farmer who bought agricultural processing equipment. The other investing farmers used their own funds.

A question was asked as to what would the households do if they had extra money. The responses indicated that buying land, machinery and investing in wells were the three most desired forms of investments that farm households perceived as most profitable. This suggests that agriculture is still a profitable activity in Syria. Indeed, when the farmers were asked whether they were interested in increasing agricultural production, 84 percent answered in the affirmative. Of those, the majority (43 percent) indicated that their major constraint to expansion was lack of own funds or credit, 18 percent said that the major constraint was that they cannot obtain more land, while 7 percent declared that the major constraint was low product prices and the lack of additional irrigation.

Farmers not interested in increasing agricultural production mostly gave as their main reason that private farming was not profitable; they were mostly poorer and smaller farmers. The conclusion seems to be that farming is still a profitable business for most farm households, but lack of own funds for expansion is the major constraint to expansion. This highlights the importance of rural finance for further agricultural growth.