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Abstract
According to neo-classical theory, farm
operators’ labour allocation is determined by the
relative wage they can earn from their labour on and off
the farm. At the equilibrium, time should be allocated so
that the marginal returns from on- and off-farm work
are equal. Thus, a move from coupled to decoupled
payments should have important impacts on labour
allocation, as it reduces the return to farm labour and
increases the unearned income of operators. However,
empirical studies on decoupling have shown so far only
limited impact from decoupling and sometimes
contradictory findings. In this paper, individual
preferences and constraints are taken into account to try
and identify potential barriers to labour allocation
adjustment. Empirical analysis based on the intentions
to adjust to decoupling of a sample of French farmers
confirms a limited impact of the change in policy and
calls for further investigation of the potential barriers to
adjustment.