Strategic decisions in Norwegian farm households. Changes in the 1995-2002 period.

Since the farming sector consists primarily of family firms, the structural development of the sector and of farm dominated rural areas is the result of numerous micro-level household decisions. The important decisions are often strategic in nature; imply ing that long-term consequences are considered and that they are not easily reversible. Because of the long-term perspective such decisions are also surrounded by uncertainty. Examples are decisions to exit, decisions to work off the farm, decisions to change production system or decisions to invest. Strategic decisions are to varying degrees influenced by, and targeted by policy. As the role of agricultural income in the house hold budget declines it is expected that the role of agricultural policy as a driver of change and important factor in decisions making is reduced. Analyses of factors affecting such decisions and of recent changes will be based on the 1995 and 2002 farm household surveys (Levekårsundersøkelser) combined with annual agricultural statistics. The strategic decisions will be analysed using appropriate q ualitative dependent variables models to estimate the probabilities of farm exits, expansion, dairy farm exit, conversion to organic farming, off-farm labour and on-farm diversification, in different households, and changes over time.