Abstract
Small farms are subject to a wide range of influences on their viability including economic, policy and regulatory drivers as well as internal farm household drivers of change. Small farms have experienced a decline in numbers compared to large farms. The main task of the paper is to determine the share of viable farms of different size groups in Estonia, exploring the factors that are associated with economically viable farms. For determination of the share of viable farms of different size groups the opportunity-cost-based approach is used. Farm viability is estimated by using the data from the Estonian Farm Accounting Data Network. The results indicate that the economic viability of Estonian farms has slightly increased, but the share of viable farms has decreased. Smaller farms’ economic viability is declining, many of them are economically vulnerable. Smaller farms’ capability to survive and develop by using the available resources is lower compared to larger farms.
Highlights
The concerns about sustainable agricultural and food systems and balanced territorial development have facilitated the need for maintenance of viability of agricultural entities, the main promoters of the rural life
Farm viability as a concept refers to farm economic viability, which is the indicator of farm economic performance under the approach of farm level economic sustainability
This paper will provide an insight to the economic viability of Estonian farms with special reference to farm size using data from the national FADN database
Summary
The concerns about sustainable agricultural and food systems and balanced territorial development have facilitated the need for maintenance of viability of agricultural entities, the main promoters of the rural life. In Estonia, the average percentage of small farms in terms of economic size is high, and the mean size of the farms with less than 5 ha of utilized agricultural area is below 2 ha (Guiomar et al, 2018). This paper will provide an insight to the economic viability of Estonian farms with special reference to farm size using data from the national FADN database. The study aims to determine the share of viable farms of different size groups in Estonia.
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