The Entry-Growth-Exit Processes in Agriculture

The recent emphasis in farm management research has centered on issues of financial management and firm growth. Consequently, a number of studies have identified and evaluated alternative production, financial and marketing strategies that result in growth or expansion of the farm firm. These studies have explicitly or implicitly assumed that the firm is a viable economic unit and the ownership structure will not change during the growth process. Thus, the life cycle of the firm has been severed from the typical life cycle of the enterpreneur, and the financial, economic and human problems of entry and exit of farm entrepreneurs into and out of the agricultural production sector have not been confronted. The following discussion will briefly review the characteristics of the life cycle of the family firm and indicate why entry-exit problems are particularly acute in the agricultural production sector. Then, specific micro and macro issues that merit empirical investigation, including the firm and industry implications of coordination (or the lack thereof) of the entry and exit processes, will be identified and discussed.