Explaining farm succession: the impact of farm location and off-farm employment opportunities

A.M Aldanondo Ochoa,C Almansa Sáez,V Casanovas Oliva

doi:10.5424/sjar/2007052-241

A.M Aldanondo Ochoa, C Almansa Sáez + Show 1 more

Open Access

https://doi.org/10.5424/sjar/2007052-241

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Abstract

This paper studies the impact of farm location on family farm succession, using a sample of farm households located at different distances from the urban centre in a rural region of Spain. Aggregated household data and household/child cross section data are used to analyze farm succession from two different perspectives, the father's and that of each of the children. The research considers both the father's expectations for the transfer of the farm to the next generation and, also, the impact of the individual characteristics of each child on the likelihood of his/her entering agriculture. Two estimates, the probit and random parameter ordered probit model, suggest that farm location has a significant effect on the probability of one of the farm operator's children taking on the business. Other important factors that affect farm succession are firm size and farm children's level of education. Then, policy initiatives to foster qualified employment and structural change in agriculture may perhaps help to retain young people in farming.

Highlights

The relative aging of the economically active population in Spanish agriculture, especially in disadvantaged areas of the country, poses a social welfare problem, because of its impact on the economic and social viability of the areas in question, and because of its potential impact on environmental conservation1
Some studies underline the influence of part-time farming in this matter, few explore the impact of farm location on the success of farm succession
Kimhi and Nachlieli (2001), for Israel, conclude that success in intergenerational family farm transfer is not conditioned by location

Summary

Introduction

The relative aging of the economically active population in Spanish agriculture, especially in disadvantaged areas of the country, poses a social welfare problem, because of its impact on the economic and social viability of the areas in question, and because of. An interesting and innovative perspective, that is lacking in the economic literature on family farm succession, can be found in studies on rural youth, where the problem is addressed from the standpoint of the second generation (González, 1991; González and Gómez Benito, 1997, 2001; Gómez Benito and González, 2002; González et al, 2002) These works underscore the fact that the outcome of succession is heavily influenced by farm size, farmers’ children’s educational level and agricultural policy. Due to the overall growth of the Spanish economy and a variety of other reasons, this institution has for fallen into decline in many regions (Ramos, 2004) In this area in particular, a better educated youth and increasing job opportunities in other sectors have lessened the appeal of farm work and the rural lifestyle as a career option for young people. The success of intergenerational transfer depends more on the preferences of the farmer’s children than on their parents’ decision, though usually the parents are who encourage their children to pursue other careers

Methodology and sample restrictions

Results

Discussion