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

Abstract

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.