Adaptations to the farm crisis: Macro level implications of micro level behaviors

Using panel data collected during a short term crisis period, the changes in household labor and finances of a random sample of North Carolina farm operations are examined. Most farms (63 percent) reported no changes in their labor allocation patterns or financial arrangements. Among farms that reported some type of change, postponing farm or household purchases, restructuring financial liabilities, and increasing family income were the most widely utilized adaptations. Variables measuring farm and household economic hardship discriminate the group that used any type of adaptation from the group that attempted no changes. Multinomial logistic regression was used to examine the effect of adaptation use on survival in agriculture. Farm operations that attempted any type of change in their use of labor and capital were the ones that ultimately did not survive in agriculture. The results point to the need to consider the linkage between macro level structural conditions and the micro level behavior of individuals and households in developing policy interventions to ameliorate economic hardship.