Driving Forces behind Exiting from Farming in Western Europe

This study examines the exit process of Western European farmers. Using a simple theoretical model of structural change, we examine empirically the impact of farm characteristics, macroeconomic conditions and policy intervention on farm exits during the 1990s. Econometric estimates using regional data for 110 regions in Western Europe indicate that exits from farming are strongly influenced by farm characteristics and policy conditions. In particular, exit rates are higher in regions with smaller farms and are closely related to production structures. Exit rates are lower in regions with more part-time farming, high subsidy payments and high relative price increases for agricultural outputs, indicating that off-farm income and government intervention slow down structural change in European agriculture.

[1]  A. Barkley.  The Determinants of the Migration of Labor out of Agriculture in the United States, 1940–85 , 1990 .

[2]  Ayal Kimhi,et al.  Family farm dynamics in Canada and Israel: the case of farm exits , 1999 .

[3]  C. Turvey,et al.  Economics of Structural Change in Agriculture , 1993 .

[4]  Alfons Oude Lansink,et al.  Farm‐specific Adjustment Costs in Dutch Pig Farming , 2004 .

[5]  C. Weiß.  Farm Growth and Survival: Econometric Evidence for Individual Farms in Upper Austria , 1999 .

[6]  Allen M. Featherstone,et al.  Determinants of investments in non‐farm assets by farm households , 2004 .

[7]  J. Heckman.  Sample selection bias as a specification error , 1979 .

[8]  Kyösti Pietola,et al.  Timing and type of exit from farming: farmers' early retirement programmes in Finland , 2003 .

[9]  Daniel A. Sumner,et al.  An Econometric Analysis of the Effects of Human Capital on Size and Growth among Dairy Farms , 1987 .

[10]  G. Tolley.  Management Entry Into U.S. Agriculture , 1970 .

[11]  M. Todaro,et al.  A Model for Labor Migration and Urban Unemployment in Less Developed Countries , 1969 .

[12]  A. Kimhi.  Is Part‐Time Farming Really a Step in the Way Out of Agricultural? , 2000 .

[13]  Catherine Benjamin,et al.  Does Capital Market Structure Affect Farm Investment? A Comparison Using French and British Farm‐Level Panel Data , 2002 .

[14]  H. F. Gale.  Age-Specific Patterns of Exit and Entry in U.S. Farming, 1978–1997 , 2003 .

[15]  S. Goetz,et al.  Why Farmers Quit: A County‐Level Analysis , 2001 .

[16]  Y. Mundlak.  Occupational Migration out of Agriculture-A Cross-Country Analysis , 1978 .

[17]  John R. Harris,et al.  Migration, Unemployment & Development: A Two-Sector Analysis , 1970 .

[18]  Jeremy Foltz.  Entry, Exit, and Farm Size: Assessing an Experiment in Dairy Price Policy , 2004 .

[19]  C. Weiß.  Do they come back again? The symmetry and reversibility of off-farm employment , 1997 .

[20]  M. Pfeffer.  Part-time farming and the stability of family farms in the Federal Republic of Germany1 , 1989 .

[21]  A. Harvey.  Estimating Regression Models with Multiplicative Heteroscedasticity , 1976 .

[22]  D. Jackson‐Smith.  Understanding the Microdynamics of Farm Structural Change: Entry, Exit, and Restructuring among Wisconsin Family Farmers in the 1980s1 , 2009 .

[23]  C. Weiß,et al.  Intergenerational Succession in Farm Households: Evidence from Upper Austria , 2004 .

[24]  Thomas Glauben,et al.  Agriculture on the move: Exploring regional differences in farm exit rates in Western Germany , 2006 .