Abstract

The paper investigates the drivers of farm size and farm size growth in Slovenia during the period 2007-2017 using a farm-level Farm Accountancy Data Network dataset within a quantile regression framework. Farm size growth is measured by growth in utilized agricultural area per farm. The findings suggest that growth in farm land size is driven by initial farm land size and policy subsidy support. Contrary to expectations, human capital does not play an important role in either farm land size or farm land size growth according to quantile regressions. These findings from inter-quantile comparative analysis are important for farm-related structural and rural development policy.

Highlights

  • It is well known from the literature that the number of farms in developed countries has declined, and that average farm size has increased (Eastwood et al, 2010; Lowder et al, 2016)

  • We investigate the drivers of farm land size and farm land size growth in Slovenian agriculture with a focus on initial farm size in terms of utilized agricultural area (UAA) per farm and the share of rented land, farmer/manager personal- or human-capital-related factors, farm subsidies, and farm location in rural areas

  • The main findings lead to the conclusion that initial farm size and Common Agricultural Policy (CAP) subsidies are the main drivers of farm land size and farm land size growth in Slovenia

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Summary

Introduction

It is well known from the literature that the number of farms in developed countries has declined, and that average farm size has increased (Eastwood et al, 2010; Lowder et al, 2016). The relationship between farm size and farm size growth indicates structural changes in farms with implications for farm policy and managerial farm practices and competitiveness. The claim that the relationship between farm/firm size growth and farm/firm size is independent is known in the literature as Gibrat’s (1931) Law (Distante et al, 2018). The motivation behind this paper is a desire to move a step beyond testing the validity of Gibrat’s Law and investigate the drivers of Slovenian farm size growth to better understand the mechanisms of farm structural change, and the key drivers that influence the observed trends in farm size growth. Akimowicz et al (2013) developed and tested a model of drivers of farm size growth in Southwestern France. Barbosa (2020) investigated Portuguese farming firms’ growth, focusing on human capital and managerial capa-

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