Download - Family farm succession
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Family farm succession in two Transylvanian villages- what future for the structure of
smallholdings?
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Family farm succession
The study of transmission of responsibility for decision making within the farm family.
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Why study family farm succession?
• To know who is making decisions
• To correctly target policy
• To better visualise future transformations
(Gasson and Errington 1993, Errington and Lobley 2002)
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Succession/Successor Effect (Potter and Lobley 1996)
Farm
No Successor
ExtensificationIntensification
Parent
Successor
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Succession cycle (Kemp 1999, Calus 2008)
Succ
esso
r Sele
ction
Succession process
Successor in charge
Birth of new generationRetirement of previous generation
Death of parents
Inheritance event
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Farmtransfers
• Study developed by Andrew Errington in early 1990s
• Standardised quantitative survey
• Performed in many regions of America, Canada, Europe and also Japan in last 20 years
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Farmtransfers in Transylvania
• Survey performed in S and in T in winters of 2009 and 2010
• Different methodology, so fewer results
Village S (Romanian) Village T (Hungarian)
Romanian 1790 5
Roma 174 50
Saxon 60 0
Hungarian 30 986
Total 2048 1041
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Ages and Farm Sizes
Hungarian village
Romanian Village
Japan(2001)
USA: Iowa 2001
USA: Virginia 2001
England 1997
Canada: Ontario 1997
Canada: Quebec 1997
Average age of respondent
67 56 57.1 54.0 59.8 55.1 50.7 46.9
Standard Deviation
19.0 14.0 10.7 14.5 12.9 12.4 12.7 11.1
Surface Area (ha)
20.74 24.1 4.9 189.3 64.9 163.8 122.8 116.8
Standard Deviation
65.56 53.81 12.8 205.0 109.3 182.6 136.2 120.0
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Farm size
>1 1->2 2->5 5->10 10->20 20->50 50->100 >1000
5
10
15
20
25
30
35
Farm Size (ha)
Hungarian DataRomanian Data
Farm Size (ha)
Perc
enta
ge o
f res
pond
ents
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Age of farmers
1 2 3 4 5 6 7 80
5
10
15
20
25
30
35
Distribution of farmers by age
Romanian FarmersHungarian FarmersTotal farmers
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Retirement plansRomanian Hungarian Romanian
Sample (Nemenyi)
Hungarian(Nemenyi)
Japan England 1997
France 1993
Never Retire (from farm work)
59.5 26.1 66.4 33.12 44.5 12.9 6.4
Semi Retire 26.2 43.5 8.8 37.1 53.4 28.9
Completely retire
14.2 30.4 14.3 66.88 18.5 33.7 64.7
Don’t know - - 8.8 - - - -
Discuss with family?
27.1% 47% 60.3% 32%
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Identification of successorNationality of farmer
Total Romanian
Hungarian
Romania (Nemenyi)
England Japan Ontario Quebec Iowa Virginia
% identification of successor
56.9 62.2 51.6 59.15 52 49.8 39.8 42 28.8 30.8
Data from this survey, Nemenyi 2007 and Uchiyama 2007
•Romanian respondents may confuse ‘successor’ with ‘inheritor’
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1 5 100 >1000
2
4
6
8
10
12
14
16
18
20
Farms by surface area (Romanian Village)
Without successorSuccessor
Surface Area (ha)
Freq
uenc
y
In both ethnicities, there is a greater probability of presence of a successor where the farm is over 5ha in size. This is consistent with research linking likelihood of succession with farm size (Errington and Lobley 2002, Calus 2009). In order to have a farm over the size of 10ha (due to the effects of the land restitution law 18/1991, where original applications were limited to a maximum of 10ha), the farmer must have invested in his farm after decollectivisation either through purchase of land, renting land or investing time in subsequent land restitution claims.
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In both ethnicities, there is a greater probability of presence of a successor where the farm is over 5ha in size. This is consistent with research linking likelihood of succession with farm size (Errington and Lobley 2002, Calus 2009). In order to have a farm over the size of 10ha (due to the effects of the land restitution law 18/1991, where original applications were limited to a maximum of 10ha), the farmer must have invested in his farm after decollectivisation either through purchase of land, renting land or investing time in subsequent land restitution claims.
1 5 100 >1000
2
4
6
8
10
12
14
Succession of farm by surface area (Hungarian Village)
Without SuccessorSuccessor
Surface area (ha)
Freq
uenc
y
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Activity of successor• 50% designated successors
have no active role on the farm (either working or studying elsewhere)
• Where successor works on farm, has small decision making responsibility (beginning of succession process)
• Level of responsibility of successor correlated with age
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Inheritance and succession• Three elements of farm
replication: retirement, succession and inheritance (Errington and Lobley 2002)
• Romanian inheritance laws and traditions follow Napoleonic tradition
• What influence of Communist notions of ‘property’ and therefore inheritance for small farms?
Retirement
Succession
FARM REPLICAT
ION
Inheritance
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Ethnic and generational differences in inheritance
•Hungarians more likely to pass on land in one unit
•Younger farmers more likely to pass on farm in one unit (to one.
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Retirement and Succession• Importance of discussion of
retirement plans for future planning
• Lack of communication creates ‘Nash Equilibrium’ -neither successor nor decision maker can make changes to the farm/plans for the farm due to lack of information about the other’s intentions (Calus 2009)
• Hungarian families were more likely to discuss plans for retirement with their families than Romanian ones
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Succession/Successor Effect (Potter and Lobley 1996)
Farm
No Successor
Extensification
Intensification
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Hypotheses for absence of succession ladder
• Short time horizons -> lack of long term planning
• Block to retirement• Issue of ‘ownership’,
property• Lack of
intergenerational discussion
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Succession cycle (Kemp 1999, Calus 2008)
Succ
esso
r Sele
ction
Succession process
Successor in charge
Birth of new generationRetirement of previous generation
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Conclusions?
• Succession as defined by Errington and other academics does exist in Romania
• Weak succession ladder• Division between
succession and inheritance
• Issues of communication and inability to retire