LEISURE AND FARMERS WELFARE IN CHANGING CONDITIONS

This paper examines the background for leisure-labour decisions in agr iculture and evaluates welfare effects of a shift in farmers' relief s ervices from a state-led subsidised system to a market mechanism. Leis ure provided by relief services in agriculture contributes to well-bei ng, but the leisure-labour choice also influences the revenue. Besides conventional economic and demographic factors, we emphasize the impor tance of special biological bindings and continuity, as well as risk a nd uncertainty affecting farmers' time allocation in agricultural prod uction. We consider structural development as an aggregate factor to e xplain the demand for farmers' relief services. In Finland the organis ation of the services is more centralized than in the other Nordic cou ntries or the European Union. If government subsidies for relief servi ces were removed and a market mechanism with free price formation adop ted, direct government savings would be more than enough to compensate for substantial losses to farmers. Moreover, market forces could prod uce economic efficiency and local flexibility of a higher degree. Stat e subsidization may still be needed to some extent in changing conditi ons in order to enable the relief services to develop and serve as a s upport system of a social, de-coupled, and less distorting nature.