Summary and Conclusions of Chapter

Chapter 4 presents the household level determinants of off-farm labour participation and allocation decisions of adult members in the agricultural households in Fiji. A set of various demographic and socio-economic variables for 6,094 persons in 1,201 agricultural households have been derived from the Household Income and Expenditure Survey (HIES) 2008-09. This analysis is important in the context of Fiji, given that low agricultural productivity and low agricultural income in the agricultural households can be potentially compensated by the off- farm income work. The empirical estimation applies a more recent analytical framework of double-hurdle model that investigates what motivates an individual household member to participate in off-farm economic activities (likelihood of off-farm participation) and what factors influence the number of days the individual allocated to off-farm work (the level of off-farm participation).

The results show that age and work experiences have a significant impact on off-farm income participation for both male and female adults, and the level of participation is only significant for female participants. Ethnicity and gender do not significantly increase the likelihood of engaging in off-farm work for both the Fijian male and female adults. However, Fijian male participants in off-farm activities work fewer days than Fijian females. While Indo-Fijian males are observed to be participating in off-farm activities, this is not the case for Indo-Fijian females. Other factors such as an individual’s marital status, formal education, household head status, and family size have differential impacts on off-farm participation and labour supply allocation decision-making process. It also shows that individuals from lower income households are more likely to be excluded from off-farm income-generating activities.

The findings for the households involved in various types of agricultural production show that fresh fruit and vegetables (FFV), root crops, livestock, rice, and sugar crops have different impact on one’s decisions about off-farm participation and the allocation of labour time. The results indicate that females involved in FFV farming participate in off-farm work but have less amount of labour time allocated to such activities. However, females involved in the traditional root crops farming are less likely to engage in off-farm work compared to males. Also, the males involved in livestock production allocated less amount of labour time to off- farm work.

7.2.3 Summary and Conclusions of Chapter 5

This chapter provides the contribution of remittance income for agriculture and rural development in Fiji at the micro-level analysis using the Household Income and Expenditure

157 Survey 2008-09. The remittances-household consumption nexus employs the seemingly unrelated regression technique and the issue of remittances-agriculture nexus is estimated using logit regression model to measure the linkages between remittance income and crop selection. The Poisson regression model estimates the probability of crop diversification among the remittances recipients and non-recipient households.

Contrary to general belief that remittances are mostly used for food consumption amongst the Pacific island nations, the results show that remittances have alternative uses in the households in Fiji. Remittances are specially targeted toward expenditures in education and housing, though the expenditure patterns differ between urban and rural areas and also between Fijian and Indo-Fijian households. In the urban areas, Indo-Fijian households use remittance income substantially on education expenditure while remittances received by Fijian households are used mainly for housing.

For the remittances-agricultural nexus, the results show that agricultural households are more likely to use remittances to foster agricultural production in fresh fruit and vegetables (i.e., banana and cabbage) and livestock (i.e., cattle, pig and goat). In terms of diversification of farming activities, the remittance-recipient households are more likely to grow more than one type of fruits and vegetables and also add different types of livestock to their farm compared to the non-recipient households.

7.2.4 Summary and Conclusions of Chapter 6

The most recent Household Income and Expenditure Survey 2008-09 has been used to investigate the level, depth, and severity of poverty, and the degree of inequality based on the household income distribution and rural-urban areas. Poverty analysis results indicate a higher percentage of rural households in the basic needs and food poverty categories compared to their urban counterparts. In comparing the household types, agricultural households experience basic needs and food poverty compared to those in the non-agricultural households where the non-farm household income sources contribute significantly towards poverty reduction.

By segmenting the households according to geographic criteria and economic activities, the empirical results indicate that Fiji still has a long way to go in reducing the income gap. The income differentials are very large between the very rich and the very poor in both the rural and urban households, and the very rich and very poor of those in the agricultural and non- agricultural households. The results by ethnicity show that Indo-Fijian households experience

greater income inequalities (based on the positive and normative measures) than the Fijian households.

The Gini coefficient for total population reveals that stark differences exist between different population groups. The decomposition results by separate income components also indicate major sources of inequality. The inequality-enhancing effect, in particular, is generated by various household income sources from Non-farm Labour Income, Business Income, and Investment Income. The Farm Income and Other Income categories contribute to inequality reducing effect, and the government welfare payment, especially, has the most equality impact on the agricultural and non-agricultural households.