Farm Strategy, Self-Selection and Productivity: Can Small Farming Groups Offer Production Benefits to Farmers in Post-Socialist Romania?

Abstract

This paper addresses two questions: why are Romanian farmers continuing to place land in cooperative forms of farming when theory suggests that private farming is more productive and, are there efficiency gains to be had from cooperative farming endeavors? Results from an econometric selection model suggest that smaller, endogenously developed farming cooperatives, such as family societies, provide benefits over private farming strategies under certain conditions. This paper questions the wholesale rejection of cooperation around production and challenges policy to move away from the typically dichotomized presentation of agrarian structure as being a trade off between private small-scale farming and large-scale collective farming.