Unpacking the Governance of Land Supply in Bulgarian Farms

The goal of this article is to identify dominating modes and factors of land supply in Bulgarian farms. It is based on the incorporation of New Institutional Economics methodology and analysis of new representative data collected from the managers of farms of different types and locations. The study has found that rent and lease contracts are the most common forms of farms' land supply, followed by the ownership mode and joint cultivation. The importance of different governance modes, forms of supply contracts, intensity of transactions, types of partners, and kinds of land rent and price varies considerably depending on the juridical type, size, specialization, and geographical and ecological locations of holdings. Major factors for the governance choice are frequency, uncertainty, asset specificity of transactions, and professional experience of farm managers. The amount of transaction costs for finding needed lands and natural resources is among the critical factors strongly restricting the development of many Bulgarian farms, particularly of sole traders and cooperatives, farms with large sizes, holdings specialized in permanent crops and mix crops, those located in plain regions, protected zones, and near big cities, and enterprises in North-east, North-central, and South-central regions of the country. Most problems and costs for land (purchase, rent, and lease) deals of farms are caused by the lack of available lands, high prices, big fragmentation of land plots, and needs for deals with numerous (co)owners. A comparative analysis with a similar study demonstrated enormous modernization in land supply and overall governance of farms in the last two decades.