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Reforms,globalization, and endogenous agricultural structures
Authors:Johan FM Swinnen
Institution:LICOS Centre for Institutions and Economic Performance & Department of Economics, University of Leuven (KUL), Deberiotstraat 34, 3000 Leuven, Belgium
Abstract:In this article, I draw lessons from two quasi‐natural experiments (the transition process in former Communist countries and the rapid globalization of food chains) on the optimality of farms and agricultural structures more generally. I argue that (a) the farm structures that have emerged from the transition process are much more diverse than expected ex ante; (b) this diversity is to an important extent determined by economic mechanisms which are influenced by initial conditions and reform policies; (c) non‐traditional farm structures have played an important role during transition because they were optimal to address the specific institutional and structural constraints imposed by the transition process; (d) there is more diversity than often argued in the farms that are integrated in global food chains; (e) endogenous institutional (contracting) innovations in food chains may lock existing farm structures in a long‐run institutional framework; and (f) indicators based on farm structures are not a good measure of welfare effects of the globalization of food chains.
Keywords:N50  O13  O38  Q18  Agribusiness  Agricultural and food policy  Community/rural/urban development  Comparative economic history  Transition economics
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