Regional economic impacts of pluriactivity in Scottish farm households

This study examined the regional economic impacts of pluriactivity in Scottish farm households. This has become an important issue in a climate of falling farm incomes, and increased moves towards integrated rural development policies. Methodologies included: i) developing a model, which combines and extends existing techniques, capable of estimating and spatially distributing the economic impacts of on-farm pluriactivity; ii) identifying which types of activity have the greatest benefit in terms of a) local and b) regional income generation and employment, measured by size and spatial distribution; iii) assessing the economic impact of the RDP; and iv) identifying those areas in the regions studied, which offer the greatest and least potential for pluriactivity, as a step towards policy targeting. A model was produced combining techniques from input-output analysis and a gravity model. This model can be used to predict the income and employment impacts of on-farm enterprises, and spatially distribute the results. The gravity model was extended to allow multiple payments, and could then be used to assess the economic impacts of the RDP grants in Dumfries & Galloway and Grampian. It was found that the regional economy comprises a complex set of relationships, and the outcomes were influenced by the presence, or absence, of centres of population large enough to draw economic benefits away from rural areas. Factor analysis was used to identify which geographical, physical, economic and location variables explain the success of various on-farm enterprises. This analysis was found to be particularly suited to tourism and leisure & recreation related activities, which at present account for the majority of on-farm enterprises. Some areas were found to exhibit the correct conditions for developing several different enterprises, but some of the remote areas were, unfortunately, shown to have very few diversification opportunities. The results of the study clearly provide information relevant to policy makers interested in an integrated approach to rural development