Intra-family succession in Italian farms

The succession in family farm is a critical issue: it not only involves the transmission of wealth, but also of specific skills and of specific farm management techniques. Since a large share of farmers in Italy are old, the lack of prospective successors in their farms would imply that a change in the farm management will take place. In some cases this could be a beneficial process, leading to the enlargement of neighbouring farms and, hence, to a greater efficiency but in other cases it might lead to the abandonment of farms and to degradation of the territory. It is therefore important to explore the conditions under which a farm household can transmit the farm management within the household itself. In our paper we try to assess which are the determinants of the likely farm succession within the family and we test in a developed country the hypothesis put forward by Rosenzweig and Wolpin (1985) for LDCs that farm-specific knowledge creates an incentive for children to take on the farm. To do this, we exploit a sample of individual farm data in Piedmont Region drawn from the 2000 Agricultural Census. Taking the presence of children and relatives working predominantly or exclusively on the farm as indicators for the presence of prospective successors, we estimate by a multinomial logit its determinants. Explanatory variables include personal characteristics of the operators, including their work status, and farm characteristics. The results suggest that specific knowledge does favour farm succession within the household, along with other variables already considered in the previous literature; nevertheless, the effects of these variables are in general weak, and more research is needed to identify them.