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A revival of large farms in Eastern Europe-how important are institutions?

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  • Ulrich Koester

Abstract

Contrary to expectations, large farms are still the dominant form of farm organization in most countries of the Commonwealth of Independent States and are important in some Central and Eastern countries. This paper analyzes the reasons for these failed expectations, focusing on the experience of Russia. The framework of institutional economics is applied to explain the reasons why the conventional approach, based on economies of scale and on-farm transaction costs, does not apply to the evolution of farm size in the east (and even the west). Specific institutions, which are partly embedded and informal, and legal, but loosely enforced, suppress the birth of family farms in Russia and stimulate the growth of large farms, leading to holdings that are not observed in developed market economies. Hence, survival and growth of large farms are not necessarily based on comparative advantage of these farm organizations in a market economy environment. Copyright 2005 International Association of Agricultural Economics.

Suggested Citation

  • Ulrich Koester, 2005. "A revival of large farms in Eastern Europe-how important are institutions?," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 103-113, January.
  • Handle: RePEc:bla:agecon:v:32:y:2005:i:s1:p:103-113
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    Cited by:

    1. Hockmann, Heinrich & Kopsidis, Michael, 2005. "The Choice of Technology in Russian Agriculture: An Application of the Induced Innovation Hypothesis," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24652, European Association of Agricultural Economists.
    2. Maurel, Marie-Claude, 0. "From Disappearance To Recovery: Family Farming In Central Europe. Questioning The Path Dependency Hypothesis," Village and Agriculture (WieÅ› i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, issue 1.1.
    3. Hockmann, Heinrich & Bokusheva, Raushan & Bezlepkina, Irina V., 2007. "Agroholdings membership: does that make a difference in performance?," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10023, European Association of Agricultural Economists.
    4. repec:zbw:espost:165994 is not listed on IDEAS
    5. Bezlepkina, Irina V. & Huirne, Ruud B.M. & Oude Lansink, Alfons G.J.M. & Oskam, Arie J., 2005. "Analysing Variation in Russian Dairy Farms, 1990-2001," 94th Seminar, April 9-10, 2005, Ashford, UK 24444, European Association of Agricultural Economists.
    6. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    7. Pavel Ciaian, 2007. "Land Reform and Productivity Gains with Multiple Market Imperfections," EERI Research Paper Series EERI_RP_2007_01, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Jürgen Wandel, 2011. "Business groups and competition in post-Soviet transition economies: The case of Russian “agroholdings”," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 24(4), pages 403-450, December.
    9. Jambor, Attila, 2007. "Conformation and market effects of corporate cereal farms in Hungary," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10016, European Association of Agricultural Economists.
    10. Hockmann, Heinrich & Gataulina, Ekaterina & Hahlbrock, Konstantin, 2011. "Risk, Technical Efficiency And Market Transaction Costs In Different Organisational Forms: Evidence From The Oblast Tatarstan," 51st Annual Conference, Halle, Germany, September 28-30, 2011 114510, German Association of Agricultural Economists (GEWISOLA).
    11. Bruisch, Katja, 2007. "Entwicklungstendenzen landwirtschaftlicher Familienbetriebe in Russland seit 1990
      [Development trends in family farming in Russia since 1990]
      ," IAMO Discussion Papers 108, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    12. Petrick, Martin, 2008. "Theoretical and methodological topics in the institutional economics of European agriculture. With applications to farm organisation and rural credit arrangements," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 45, number 92318.
    13. repec:zbw:iamost:85 is not listed on IDEAS
    14. Cimpoies, Dragos & Lerman, Zvi, 2007. "Land Policy And Farm Efficiency: The Lessons Of Moldova," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7839, European Association of Agricultural Economists.
    15. Wandel, Jurgen, 2007. "Integrated Structures, Market Forces and Competition in Russia's Agro-Food Sector: An Assessment from the Perspective of the Austrian School of Economics," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10019, European Association of Agricultural Economists.

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