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The Choice of Participation Forms in Community-Based Group Farming and Efficiency in Team Production

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  • Nakajima, Shinsaku
  • Tahara, Kengo

Abstract

Past studies suggest that family farming is more productive than farming groups, but empirical studies are not enough to conclude which is more efficient. This paper tries to econometrically analyze the efficiency difference between farming groups and family farming, using original plot yield data from a district in Japan. We accomplish this by, first, analyzing the empirical determinants behind the farmers’ choice of participation forms in farming groups based on communities. Second, we verify the presence of free-riding at community-based farming groups which adopts an income-pooling system. Results of the regression analysis showed that for the choice of participation forms in farming groups the most important factor is family labor force. Estimating yield differences between farming group plots and family farming plots shows that farming groups is less efficient due to the incentive problem. Since the core problem of community-based farming groups seems to be the trade-off between efficiency and equity, even if farming groups yield level decreases, the adoption of commission paid according to each plot’s yield is not necessarily desirable. Therefore, a profit distribution mechanism in community-based farming groups should be designed, taking equity issues also into consideration.

Suggested Citation

  • Nakajima, Shinsaku & Tahara, Kengo, 2009. "The Choice of Participation Forms in Community-Based Group Farming and Efficiency in Team Production," 2009 Conference, August 16-22, 2009, Beijing, China 51640, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51640
    DOI: 10.22004/ag.econ.51640
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    References listed on IDEAS

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    1. Claude Menard & Mary M. Shirley (ed.), 2005. "Handbook of New Institutional Economics," Springer Books, Springer, number 978-0-387-25092-2, June.
    2. Deininger, Klaus, 1995. "Collective agricultural production: A solution for transition economies?," World Development, Elsevier, vol. 23(8), pages 1317-1334, August.
    3. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    4. Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-386, October.
    5. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October.
    6. Sabates-Wheeler, Rachel, 2002. "Farm Strategy, Self-Selection and Productivity: Can Small Farming Groups Offer Production Benefits to Farmers in Post-Socialist Romania?," World Development, Elsevier, vol. 30(10), pages 1737-1753, October.
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    Cited by:

    1. Takahashi, Daisuke & Fujie, Takeshi & Senda, Tetsuji, 2021. "Conditions for Collective Land Use By Community Farming: Case Study of Six Prefectures in the Hokuriku and Kinki Regions of Japan," 2021 Conference, August 17-31, 2021, Virtual 315140, International Association of Agricultural Economists.

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