Restructuring of traditional farms and new land relations in Ukraine

This paper reports the results of a 1993/1994 survey of 2500 farm managers, farm employees, and private farmers in Ukraine, highlighting changes at the farm level in response to programs of land reform and farm restructuring. As of early 1994, Ukrainian reform had moved to the first stage, which involves privatization of much of the agricultural land and creation of shareholding farms. Over 60% of agricultural land in Ukraine has been transferred from state to collective ownership; among the collective and state farms surveyed, nearly 75% have reorganized and most of them have allocated land and asset shares to members. The number of independent private farmers in Ukraine exceeds 30 000, but with an average farm size of 20 ha they cultivate less than 2% of farmland. Reform at the farm level in Ukraine has thus begun, but at present is at a very early stage.     

国有林场改革成效评价——职工获得感的统计分析

利用国有林场职工监测数据,基于物质维度和精神维度,从改革后职工自身的收益情况、职工对林场的整体评价、职工对林场管理方式的评价等方面,采用比较分析法和主成分分析法对国有林场改革职工获得感进行分析。研究结果表明:国有林场改革后职工获得感有所提升,改革进程与职工获得感呈强正相关性,改革促进了林场的可持续发展。但林场整体基础设施环境一般,场部相对较好,管护站点则较差。同时,在领导班子建设方面应注重自主、公平,仍需提高领导水平。     

Analysing Farm‐specific Payments for Norway using the Agrispace Model

Norway maintains a complex system of activity or type specific coupled payments which account for a large share of farm income. Most of the payment rates are negatively related to farm size and are higher in remote areas compared to central regions. We present and use a newly developed recursive‐dynamic multi‐commodity model (Agrispace) with CES production functions depicting regional farm clusters derived from the full farm population. Using this model, we simulate impacts of current and alternative subsidy policies on production, prices, input use, income and farm structural change. Mapping cluster results to each farm along with behavioural rules allows estimation of individual profits and farm exits. Our results indicate that, in the short run, the current policy regime seems to support the policy objective of maintaining a variety of farms in all parts of Norway. In the long run, farm structural change is less affected by a policy reform that leaves total support levels unchanged.     

An Analysis of U.S. Aggregate Output Response by Farm Size

Past empirical evidence on supply response by size of farm in the U.S.A. provides no clear basis to conclude that supply elasticities vary systematically with farm size. In this paper, the central hypothesis that no systematic relationship exists between production response to price and size of farm is rejected. U.S. farms are disaggregated into nine economic size categories and own-price supply elasticities are measured for per farm and total agricultural output. Empirical results from this study suggest that supply response does vary systematically by farm size, with smaller farms exhibiting greater elasticities than midsized farms.     

Diversification, Vertical Integration, and the Regional Pattern of Dairy Farm Size

Dairy farm size differs considerably across the United States. We analyze patterns of dairy farm size to determine how differences in vertical integration and diversification relate to farm size. We find that diversification accounts for little size variation. For vertical integration, the partial correlation with dairy herd size is strongly negative. Dairy value-added size measures vary less across regions than herd size, indicating that an important part of herd size variation relates to vertical integration. Nonetheless, dairy farms in the Pacific and South regions remain much larger than farms in the traditional dairy regions, even when accounting for vertical integration.     

Challenging Small‐Scale Farming: A Non‐Parametric Analysis of the (Inverse) Relationship Between Farm Productivity and Farm Size in Burundi

We use a non‐parametric approach to investigate the (inverse) relationship between farm productivity and farm size. A kernel regression is used on data of mixed cropping systems to study the determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production were gathered from 640 households in 2007 in two Northern provinces of Burundi. Our results do not reject the findings of an inverse relationship between farm size and productivity. However, we find that size returns vary substantially with farm size, that is, between 0.2 for the smallest farms and 0.8 for the largest farms. Other factors that significantly affect production include soil quality. Finally, we find a significant positive association between food security and farm size.     

Survey and Analysis of Labour on Organic Farms in the UK and Republic of Ireland

A survey of 1144 organic farms in the UK and Republic of Ireland (IE) was used to assess whether organic agriculture provides more labour than conventional (nonorganic) farming. The sampled farms comprised 23% of all organic farms. The jobs per farm and per area varied greatly with enterprise type and farm size, and between regions. Comparison of the survey with national statistics showed that organic farms employ 135% more FTE (full time equivalent jobs) per farm than conventional farms. The mean jobs per area was markedly lower for organic farms (1.35 compared to 2.43 FTE per 100 ha), because they are larger (216 ha compared to 51 ha). Even when corrected for the different size distribution, organic farms had more jobs per farm than the national averages (2.52 and 1.49 FTE for the UK and IE, compared to 1.28 and 1.16 FTE). The farm size weighted FTE per area for organic farms in the UK (4.33 FTE per 100 ha) was almost twice that for conventional farms. We predict there would be 19% and 6% more farming jobs in the UK and IE if 20% of the farms of both countries were to become organic (compared to the present 1–2%).     

Productivity and farm size in Australian agriculture: reinvestigating the returns to scale

A positive relationship between farm size and farm productivity is often considered to be largely due to increasing returns to scale in farm production. However, using farm‐level data for the Australian broadacre industry, we found that constant or mildly decreasing returns to scale is the more typical scenario. In this study, the marginal returns to various farm inputs are compared across farms with different sizes. We found that large farms achieved higher productivity by changing production technology rather than increasing scale alone. The results highlight the disparity between ‘returns to scale’ and ‘returns to size’ in the industry, suggesting that productivity improvement among smaller farms can be made through increasing their ability to access advanced technologies, rather than simply expanding their scale.     

Do family farms really converge to a uniform size? The role of unobserved farm efficiency*

We analyse the growth of family farms in Israeli cooperative villages during a period of economic turmoil. We use instrumental variables to account for the endogeneity of initial farm size, and correct for selectivity as a result of farm survival. We also include a technical efficiency index, derived from the estimation of a stochastic frontier production model, as an explanatory variable. Our aim is to check whether ignoring efficiency could have been the reason for convergence results obtained elsewhere in the literature. We found that technical efficiency is an important determinant of farm growth, and that not controlling for technical efficiency could seriously bias the results. In particular, larger farms are found to grow faster over time, while without controlling for technical efficiency the farm growth process seemed to be independent of initial farm size. The increasing polarisation of farm sizes in Israel has ramifications for the inefficiencies induced by the historical quota system, for the political power of the farm sector and for the social stability of farm communities.     

O‐Ring production on U.S. hog farms: joint choices of farm size,technology, and compensation

We hypothesize that hog production can be characterized by complementarities between new technologies, worker skills, and farms size. Such production processes are consistent with Kremer's O‐ring production theory in which a single mistake in any one of several complementary tasks in a firm's production process can lead to catastrophic failure of the product's value. In hog production, mistakes that introduce disease or pathogens into the production facility can cause a total loss of the herd. Consistent with predictions derived from the O‐ring theory, we provide evidence that the most skilled workers concentrate in the largest and most technologically advanced farms and are paid more than comparable workers on smaller farms. These findings suggest that worker skills, new technologies, and farm size are complements in production. The complementarities create returns to scale to large hog confinements, consistent with the dramatic increase in market share of very large farms over the past 20 years.     

Specialization,diversification, and productivity: a panel data analysis of rice farms in Korea

This article examines the microeconomics of productivity associated with specialization/diversification in production activities, with an application to Korean rice farms. Korean rice farms tend to be very small and highly specialized. Our analysis examines the productivity effects associated with both farm size and farm specialization/diversification in Korean agriculture. Relying on farm‐level panel data, the analysis studies farm productivity in a multi‐input multi‐output context, accounting not only for changes in inputs and technical change in rice production, but also for the role of diversification in the production of other crops in current and previous periods. We find positive but small productivity gains from farm diversification. These gains come mostly from complementarity effects across farm outputs, with minimal effect of scale economies. The positive complementarity effects work against nonconvexity effects, which provide strong productivity incentives for rice farms to specialize.     

Variations in Farm Performance in Transitional Economies: Evidence from the Czech Republic1

This paper revisits the literature on farm restructuring in the CEECs by analysing the variations in farm performance in the Czech Republic a decade after the start of the transition process. It identifies seven clusters of farms that differ in their productivity and profitability usng data from 1998 and 1999. The analysis reveals that the vast majority of farms are unprofitable, and there is no strong evidence that individual farms perform better than corporate farms. In fact, there are large numbers of individual farms that are loss‐making on their agricultural activity with low factor productivity. Producer co‐operatives and limited liability companies suffer from debts inherited from the reform process. Future restructuring is likely to occur in all clusters rather than affecting just corporate farms.     

The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata

The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.     

Farm-based modelling of the EU sugar reform: impact on Belgian sugar beet suppliers

A mathematical programming model, calibrated on individual farmdata, is used to analyse the reform of the common market organisation(CMO) in the sugar sector of the European Union. The model includesa precautionary farm supply function for out-of-quota sugarbeet that is estimated as part of a simultaneous system of first-orderconditions. Simulation results from a sample of Belgian sugarbeet farms show that the sugar CMO reform induces differentsupply and income effects across farms depending on their shareof out-of-quota sugar beet relative to their total beet supplyand their quota rent. A further cut in the minimum price ofsugar beet initiates structural change in the farm sector.     

The growth of family farms in Hungary

The article investigates the validity of Gibrat's Law for Hungarian family farms using FADN data collected between 2001 and 2007. Gibrat's Law states that the growth rate of firms will be independent of their initial size. Regression results allow us to reject Gibrat's Law for all quantiles. Evidence suggests that smaller farms tend to grow faster than larger ones. Results do not support the hypothesis of “disappearing middle” in Hungarian agriculture. We study a number of socio‐economic factors that can help to explain farm growth. We find that total subsidies received by a farm and the farm operator's age are the most significant factors correlated with farm growth.     

Measuring and causes of inequality in farm sizes in the United States

This article examines the notion of farm size inequality expressed as sales inequality in the United States. The farm size index (FSI) is developed as a measure of farm size inequality. FSIs are calculated for the farming sector in all 50 states and large variation in farm size across the states and over time is determined. The largest FSIs are calculated for a number of Southern, Southwestern, and Pacific states. Increasing FSIs over time are observed in all states as well. The spatial and temporal (between 1987 and 1997) differences in FSIs are explained by running a pooled, cross‐sectional time‐series model. The most influential variables accounting for the differences have to do with the ownership structure, where a larger presence of individual and family farms relative to corporate farms and cooperatives leads to a lower degree of farm size inequality. Also, states and regions having relatively larger number of farms owned by minorities have higher FSIs. Shrinking opportunities in the agricultural sector relative to the rest of the economy, primarily services, are reflected in a declining share of agricultural sector state income in total gross state product (GSP). This in turn leads to an increase in the farming sector's FSI suggesting that only larger, more profitable operations are the likely candidates to pursue farming activities. Finally, grains farming regions have all lower degree of farm size inequality than livestock or fruits and vegetables regions. Profitable grains farming requires relatively large farm size and equipment investments, which leads to a relatively homogeneous structure of grains farms. A larger variation in the size of profitable farm operations is possible in fruits and vegetables and livestock. This leads to the existence of a large number of very small but still sustainable farms, and a relatively small number of large farms that capture most of market sales share.     

Factors affecting farm growth intentions of family farms in mountain regions: Empirical evidence for Central Switzerland

Family farms in mountain regions are undergoing a progressive structural change and an ongoing shift in the allocation of production factors land, capital and labor. In Switzerland, various policy measures influence the re-allocation of these production factors. To understand the effectiveness of these schemes and to assess future farm structural change, it is useful to analyze the underlying drivers which support and hinder the emergence of individual farm growth strategies. We study the family farms’ growth intentions using a logistic regression model based on a combination of census and survey data on family characteristics from two mountain case study regions in Central Switzerland. Factors supporting farm growth intentions are the relative change in farm size in recent years, farm related sunk costs, farm diversification and farm size. We found no support for the hypothesis that farm growth intention is also influenced by the perceived personal situation represented by indicators for the perceived workload, psychological stress and financial problems. In addition, off-farm labor did not prevent farmers from stating growth intentions. Our empirical findings suggest that (i) the most important factors which support farm growth intentions correspond with factors driving observed patterns of structural change; (ii) limited availability of family labor may result in a new critical threshold for farm growth strategies; (iii) aims and non-pecuniary preferences of farmers will impede a rapid structural change in the near future.     

Traditional farm expansion versus joint venture remote partnerships

Traditionally, farms expand by buying out a neighbour. But might remote partnerships be a better way of expanding a farm business given projected climate change and price volatility? This question is addressed using farm business financial modelling. Representative farms at 27 locations in Western Australia are constructed to enable comparison of the value of buying out a neighbour versus expansion using geographically distant joint venture (JV) partners. The farm models consider economies of size, bulk purchase price discounts, the variability and correlation of returns associated with farm expansion, and impacts of climate change. Random selection of a remote partner generates little improvement in wealth; on average only 2.3 and 1.6 per cent, respectively, under current and projected future climate across all locations. However, there is large variation in wealth appreciation opportunities for each location and between locations. Preferred partnerships are a function of each farm's characteristics. Locations highly preferred as JV partners under current climate are similarly preferred partners under projected future climate. The main sources of additional wealth come from economies of size advantages, risk‐spreading benefits of combining geographically separated farms and bulk discounts. Farmers seeking business expansion will often benefit greatly from careful selection of a remote partner.     

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity‐enhancing technologies and, where possible, to allocate excess land to lease markets.     

Is there a future for small farms in developed countries? Evidence from the French case

This research aims to identify the specific characteristics of small farms in developed countries and the factors that influence their survival and growth. Using the case of France, we employ statistical and econometric analysis of data from the Farm Structure Survey (N = 70,000) for the period 2000–2007. The principal findings suggest that small farms are no more likely than other farms to employ “alternative” strategies to the predominant model of increasing farm size, nor are they more likely to diversify on‐farm activities or operate under quality‐labeled production systems, with the notable exception of organic agriculture. However, where small farms do adopt or practice these activities, they are seen to have a favorable effect in ensuring their survival and growth. In contrast, we are unable to conclude that pluriactivity of farm households has a positive impact on the survival of small enterprises. The effect of geographical location on small farms is largely expressed in their concentration in mountainous or disadvantaged regions. Overall, the trajectory of small farms is marked by farm exit, principally as the result of farmers retiring at the end of their careers. The small farm sector is also revitalized by both larger farms declining and thus being reclassified as small farms, as well as the progressive entry into agriculture of small farm holders whose income was previously derived largely off‐farm.