Abstract
AbstractThe dynamics of entry and exit are examined across different categories of farms depending on the timing of entry and/or exit through a detailed panel data set on Canadian agriculture. The decomposition highlights the differences in the groups of farms and provides information affecting entry and exit beyond what can be inferred from net exit numbers. While aggregate values show a gradual fall in farm numbers over time and suggest a sector in decline, the decomposition reveals that approximately one-third of farms in each census are new entrants but only half of these will be in operation by the time of the next census. The results of the analysis suggest that many of the factors that increase the probability of entry also increase the probability of exit; smaller operations, producing vegetable/horticulture goods, located in more densely populated regions, are more likely to enter the sector but also to leave farming. Multigeneration involvement and a possible succession plan also contribute to the longevity of the farm operation after it has been launched. The results also highlight the decline of the mid-size operations and the growing importance of large farms in the overall share of production.
Highlights
The continual decline in the number of farmers in most developed countries has generated concern about its impact on the vibrancy of the agricultural sector and rural communities
In the case of single operator farms, the operator being younger than 35 is significantly associated with a 1 percentage point increase in the probability of a farm that has been in operation for the current and previous census exiting by the census compared with the age between 35 and 54, while those with an operator older than 55 years are associated with a 9.6 percentage point increase in the probability of exiting rather than continuing
The farm operator being a female is significantly associated with an 8 percentage point increase in the probability of exiting farming rather than continuing, compared with a farm operated by a male
Summary
The continual decline in the number of farmers in most developed countries has generated concern about its impact on the vibrancy of the agricultural sector and rural communities. The Canadian Longitudinal Census of Agriculture (CL-CEAG) links micro-data collected on census farms across census years and, allows one to track the entry and exit of farms over time along with the range of variables collected on each census observation. Kimhi and Bollman (1999) and Kimhi (2000) develop a model using neoclassical human capital theory in which an individual weighs the present value of utility of either exiting (entering) agriculture as compared with the present value of utility from staying in (out of) farming Based on this conceptual model and previous literature, the set of independent variables on exit decisions is categorized into three groups: operator characteristics (O), farm characteristics (F ), and regional market characteristics (R). Population density in the census consolidated subdivision (CCS) (# people/square km)
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