Alternative Measures of Family Farm Viability - Incorporating Gap Measures

The measurement of farm economic viability has received intermittent academic interest with limited attention given to the conceptual framework surrounding the issue. This paper focuses attention on farm economic viability in Ireland where there are growing concerns about a two-tiered agricultural sector with increasing levels of economic vulnerability. The measurement of farm economic viability is usually based on the headcount ratio, which identifies whether a farm business is viable or non-viable and does not inform about the extent of non-viability. Therefore, it is necessary to develop alternative techniques to provide more clarity on viability levels. This paper draws on concepts from the poverty literature to develop a viability gap measure and a viability severity measure. The trends in farm economic viability are sensitive to the choice of indicator with notable differences between the headcount ratio and the viability gap. The results point to a significant cohort of acutely non-viable cattle and sheep farms. The headcount ratio provides the basis for an incomplete assessment of viability levels and multiple indicators should be considered in monitoring viability levels.