Will They Stay or Will They Go? Simulating the Dynamics of Single-Holder Farms in a Dualistic Farm Structure in Slovakia

"This paper investigates the dynamic interplay between farm exit and entry of single-holder farms (SF) in a dualistic farm structure in the Nitra region of the Slovak Republic. Our focus is on economic and noneconomic reasons for farm exit. The impact of varying both the likelihood of succession and the initial farm operator age distributions is studied. An agent-based simulation model of structural change in agriculture is applied, which brings together farm-internal and -external determinants and creates a set of endogenous adjustment reactions. We show that the stepwise introduction of direct payments of the Common Agricultural Policy in Slovakia has a strong impact on its structural development. In the short- to medium-term, the dualistic farm structure together with a specific age structure of farms still persists as a response to the policy. The phasing-in of payments persuades SF to stay and potential successors to enter. In the longer run, the initially heterogeneous farm structure becomes increasingly homogeneous toward larger SF. The prevalence of small SF in the medium- to long-term is not necessarily a given. This may lead decision makers to reconsider the role of individual farms in rural development." Copyright (c) 2009 Canadian Agricultural Economics Society.