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Why Is the Agriculture of Advanced Western Economies Still Organized by Family Farms? Will This Continue to Be So in the Future?

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  • Schmitt, Gunther

Abstract

The dominance and persistency of family farms in industrialized nonsocialist countries can only be explained by the theory that farm households organize agricultural and household production, and also very often off-farm employment, efficiently. The organizational unity of farms and households in agriculture has to be seen as a consequence of limited economies of size relative to the size of the family's labor capacity. Economies of size are increasing as well as labor capacity due to labor saving technological innovations. Smaller than technically "optimal" farm sizes are further to be explained by lower transaction costs of family farms vis-a-vis hired labor farms. Future changes of these determinants and their implications for family farming are discussed. Copyright 1991 by Oxford University Press.

Suggested Citation

  • Schmitt, Gunther, 1991. "Why Is the Agriculture of Advanced Western Economies Still Organized by Family Farms? Will This Continue to Be So in the Future?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 18(3-4), pages 443-458.
    • Handle: RePEc:oup:erevae:v:18:y:1991:i:3-4:p:443-58
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