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Agriculture is among the most risk-prone sectors in the economies of Central Asia. Production shocks from weather, pests and diseases and adverse movements in agricultural product and input prices not only impact farmers and agri-business firms, but can also strain government finances. Some of these risks are small and localized and can be managed by producers. Others are the result of more severe, exogenous shocks outside agriculture or outside the country, which require a broader response. Failure to respond adequately to these more severe risks leads to a perpetual cycle of ‘shock-recovery-shock’, which reinforces poverty traps and compromises long-term growth. The agriculture sector’s exposure to production and price risk is increasing. Climate change is increasing production risks in the short to medium-term by increasing the frequency and severity of droughts and floods and in the longer-term by reducing the availability of water for irrigation due to accelerated glacial melt. The modernization and commercialization of agricultural production and processing, which is critical for sector growth, also raises the sector’s exposure to price risk at a time of high volatility on international markets for agricultural commodities. An effective response to these risks requires a broader, more integrated approach to risk management than the current system of ex-ante, public sector activity associated with crop and livestock disease and ad hoc, ex-post emergency responses to local disasters. Measures to strengthen risk mitigation will need to be mainstreamed into sector development and investment programs, additional human and financial resources will need to be allocated to the public institutions responsible for ex-ante and ex-post risk management, and the potential for transfer (insurance) mechanisms will need to be clarified and developed where feasible. Given the limited human and financial resources available for public sector activity, a clear sense of the priorities for agriculture risk management is also required, together with a balanced view of the respective roles of public and private sector stakeholders.

Agriculture is among the most risk-prone sectors in the economies of Central Asia. Production shocks from weather, pests and diseases and adverse movements in agricultural product and input prices not only impact farmers and agri-business firms, but can also strain government finances. Some of these risks are small and localized and can be managed by producers. Others are the result of more severe, exogenous shocks outside agriculture or outside the country, which require a broader response. Failure to respond adequately to these more severe risks leads to a perpetual cycle of ‘shock-recovery-shock’, which reinforces poverty traps and compromises long-term growth. The agriculture sector’s exposure to production and price risk is increasing. Climate change is increasing production risks in the short to medium-term by increasing the frequency and severity of droughts and floods and in the longer-term by reducing the availability of water for irrigation due to accelerated glacial melt. The modernization and commercialization of agricultural production and processing, which is critical for sector growth, also raises the sector’s exposure to price risk at a time of high volatility on international markets for agricultural commodities. An effective response to these risks requires a broader, more integrated approach to risk management than the current system of ex-ante, public sector activity associated with crop and livestock disease and ad hoc, ex-post emergency responses to local disasters. Measures to strengthen risk mitigation need to be mainstreamed into sector development and investment programs, additional human and financial resources need to be allocated to the public institutions responsible for ex-ante and ex-post risk management, and the potential for transfer (insurance) mechanisms will need to be clarified and developed where feasible. Given the limited human and financial resources available for public sector activity, a clear sense of the priorities for agriculture risk management is also required, together with a balanced view of the respective roles of public and private sector stakeholders.

Drawing inspiration from American institutionalism and new institutional economics, this paper discusses the rise of large corporate farms as the transition from the classic capitalist firm to the corporate form of organization based on the separation of ownership and control. Three case studies from the Brazilian cerrado show the rise of large corporate farms to be enabled and impelled by the advance of agricultural production technologies and the search for scale economies. The key finding from the case studies is that complex technology not only necessitates large-scale farming but also generates technical and organizational solutions to the potentially pervasive agency problems. In addition to the use of sound corporate governance practices, these solutions include organizational architecture encompassing computer-aided accounting and budgeting systems, incentive-based compensation, clear definition of performance goals, and delegation of operational decisions to farm managers. Furthermore, organizational architecture has been shown to promote a culture of trust and accountability, which counteract the opportunistic tendencies of farm managers and workers

The most striking feature of the land reform in the post-Soviet space has been the overall shift from collective to individual land tenure in agriculture, generally accompanied by privatization of legal land ownership. Individualization of farming has been among the main factors that acted to arrest the initial transition decline and to produce agricultural recovery in the region. In CIS countries, the recovery point for agricultural growth is closely linked with the observed watershed dates for individualization of farming. Furthermore, the rate and the attained level of recovery are higher in countries that pursued decisive individualization policies (Transcaucasus, Central Asia), while in countries with less sweeping individualization reforms (European CIS) the recovery has been sluggish. Land reform and individualization have also led to significant improvements in agricultural productivity due to the higher incentives in family farming. Greater production and higher productivity have contributed to significant poverty reduction since 2000. To ensure continued improvement of rural family incomes and poverty mitigation, policy measures should be implemented that facilitate enlargement of very small family farms and encourage the access of small farms to market channels and services.

Agriculture and agribusiness play an important role in the Zambian economy, contributing around 20 percent of gross domestic product (GDP) in recent years and about 12 percent of national export earnings. Agriculture employs nearly 70 percent of the labor force and remains the main source of income and employment for most of the people living in rural areas. The objective of the Zambia agribusiness indicators (ABI) country report is to examine factors that have affected agricultural productivity, market access, and the policy environment for agriculture in Zambia. This report presents findings of a data collection exercise carried out to compile a set of pilot ABI for Zambia. The pilot indicators presented are based on a review of the literature, government statistical bulletins, and primary interviews in the seed, fertilizer, mechanization, agricultural finance, and transport subsectors. The resulting indicators are presented in matrix form, together with notes indicating the specific data source (or sources) used for each indicator. A set of questionnaires was developed for this part of the exercise based on guidelines. Perception indicators on the quality of road infrastructure and other transport sector issues were added to supplement the checklist guidelines. The anticipated impact of the presentation of country performances will be to raise the competitiveness of African agriculture by bringing into sharper focus measures of how individual countries are transitioning towards a more commercial agriculture. This report consists of following seven chapters: chapter one gives introduction; chapter two presents access to and use of improved seed; chapter three focuses on fertilizer access and availability; chapter four focuses on access to farm machinery and tractor hire services; chapter five presents access to agricultural and agri-enterprise finance; chapter six gives cost and efficiency of transport in Zambia; and chapter seven presents policy and enabling environment for agribusiness development.

The paper develops a methodological framework for estimating internal transaction costs from observed input-output mixes and prices. The empirical model is a modified DEA. This framework is applied to corporate dairy farms located in Russia’s Moscow oblast. The estimates provided that internal transaction costs significantly distort the allocation of marketable output and in addition hamper the evolution of more efficient farm structures. Cutting the internal transaction costs should be a priority of regional and federal agricultural development. Dieser Beitrag entwickelt eine Methode für die Schätzung der internen Transaktionskosten mit Hilfe von beobachteten Outputmengen und -preisen. Das empirische Modell ist ein modifiziertes DEA Programm. Berechnungen wurden für große Milchviehbetriebe im Oblast Moskau durchgeführt. Die Schätzungen ergaben, dass die internen Transaktionskosten extrem hoch sind und nicht nur zu signifikanten allokativen Verzerrungen führen, sondern darüber hinaus den strukturellen Wandel behindern. Die Verringerung der internen Transaktionskosten sollte von daher eine hohe Priorität in der regionalen und föderalen Agrarpolitik haben.

The paper examines agricultural production and productivity growth in two Central Asian countries – Tajikistan and Uzbekistan. Both countries are characterized by a significant shift of resources from the traditional Soviet model of collective agriculture to more market-compliant individual and family farming. In both countries, the beginning of the policy-driven switch to family farming around 1997 coincided with the beginning of recovery in agriculture, namely resumption of agricultural growth after a phase of transition decline since 1991. In addition to growth in total agricultural production, we also observe significant increases in productivity of both land and labor since 1997. These observations suggest that productivity growth may be attributable to the changes in farming structure in Central Asia. To check this conjecture we assess the sources of growth by applying the standard Solow growth accounting methodology. Using time series of country statistics for farms of different organizational forms, we decompose the growth in output into growth in the resource base (extensive growth) and growth in productivity (intensive growth). Solow growth accounting clearly shows that, first, much of the growth at the country level is attributable to increases in productivity rather than increases in resources and, second, the increases in productivity in family farms (especially household plots) outstrip the increases in productivity in former collective and state farms. These findings confirm that the recovery of agricultural production in Central Asia has been driven largely by productivity increases, and it is the individual farms that are the main source of agricultural productivity increases.

The paper examines agricultural production and productivity growth in two Central Asian countries – Tajikistan and Uzbekistan. Both countries are characterized by a significant shift of resources from the traditional Soviet model of collective agriculture to more market-compliant individual and family farming. In both countries, the beginning of the policy-driven switch to family farming around 1997 coincided with the beginning of recovery in agriculture, namely resumption of agricultural growth after a phase of transition decline since 1991. In addition to growth in total agricultural production, we also observe significant increases in productivity of both land and labor since 1997. These observations suggest that productivity growth may be attributable to the changes in farming structure in Central Asia. To check this conjecture we assess the sources of growth by applying the standard Solow growth accounting methodology. Using time series of country statistics for farms of different organizational forms, we decompose the growth in output into growth in the resource base (extensive growth) and growth in productivity (intensive growth). Solow growth accounting clearly shows that, first, much of the growth at the country level is attributable to increases in productivity rather than increases in resources and, second, the increases in productivity in family farms (especially household plots) outstrip the increases in productivity in former collective and state farms. These findings confirm that the recovery of agricultural production in Central Asia has been driven largely by productivity increases, and it is the individual farms that are the main source of agricultural productivity increases.

With the change of the political regime in Central and Eastern Europe, both managers of corporate farms and newly established private farmers had to adjust to the rules of the market economy. Among both groups, some are economically more successful than others. In general, a varying adoption of production factors is identified as being of influence. Whether their ability to collaborate with other farms is an additional factor which has been discussed under the concept of social capital since quite some time will be analyzed in this paper. Based on the findings of a survey among a sample of 62 farms in the Czech Republic it can be shown by adopting factor and multiple regression analysis that social capital is indeed a significant factor determining the level of agricultural income.

The paper presents a comparative analysis of the productivity of corporate and individual farms in Ukraine based primarily on cross-section data from a farm survey conducted by FAO in 2005. We calculate partial land and labor productivity, total factor productivity, and technical efficiency scores (using Stochastic Frontier Analysis) for farms of different organizational forms. Our results demonstrate with considerable confidence that, contrary to established convictions among the Ukrainian decision makers, the large corporate farms are not more productive than the smaller family farms. This finding is not restricted to Ukraine, as a similar result has been obtained by in Moldova, Russia, and the U.S. Policies encouraging a shift from large corporate farms to smaller individual farms, rather than the reverse, can be expected to produce beneficial results for Ukrainian agriculture and the economy in general. The government of Ukraine should abandon its inherited preference for large-scale corporate farms and concentrate on policies to improve the operating conditions for small individual farms. At the very least, the government should ensure a level playing field for farms of all sizes and organizational forms, and desist from biasing its policies in favor of large farms.

The newly emergent landowners in the 1990s left their land in the corporate farms due to the low level of farm profitability and the high risk in the general economic environment. The accession to the EU and the introduction of the CAP Single Area Payment (SAP) could induce incentives to landowners to withdraw their land if they are not satisfied with the level of rent. The negotiations between the corporate farm managers and the landowners concerning the rent level have been conceptualised as a simple two-player one-shot game. Overall conclusion is that although the SAP might induce more landowners to ask for a rent increase, it is unlikely that they will massively withdraw their land from the corporate farms. However, financially constrained farms might quickly loose their capacity to compete for land in the conditions of an increased land demand.

A set of dynamic DEA models is applied to investigate size determinants on the Moscow region corporate farms during 1996-2004. The institutional theoretical framework is found to be relevant to explaining corporate farm sizes and their changes in the Moscow region, unlike the neo-classical framework. Farms' opportunities to utilize returns to scale for improving performance are minor. Rank correlation between performance and size indicators is positive. This cannot be comprehensively explained by wider opportunities to grow that are available to best-practice farms. The theoretical expectation of pursuing lower transaction costs as a motivation for a large-scale farm business complies with the estimations.

In the Czech Republic, agricultural production is still dominated by corporate farms. Private farms have been established since the change of the political regime, but their role is not that relevant as originally anticipated. Among both groups, some have been economically more successful than others. In general, a varying adoption of pr oduction factors is identified as being of influence. Whether their ability to collaborate with other farms is an additional factor which has been discussed under the concept of social capital since quite some time will be analyzed in this paper. Based on the findings of a survey among a sample of 62 farms by adopting factor and multiple regression analysis it can be deduced that social capital is indeed a significant factor determining the level of agricultural income.

The change of the political regime from the socialist central planning system to a market economy and pluralistic society required the reorganisation not only of agricultural production, but also of the organisations in their support. In the Czech Republic, agricultural production is characterised by a dualistic structure in these days, i.e. private farmers on the one side and corporate farms on the other. However, among both groups some had been economically more successful than others. In general, a varying adoption of production factors, i.e. land, labour and capital is identified as being of influence. Whether their ability to collaborate with other farms is an additional factor, which has been discussed under the concept of social capital since quite some time, will be analysed in this paper. Based on the findings of a survey among a sample of 62 farms by adopting factor and multiple regression analysis it can be deduced that social capital is indeed a significant factor determining the level of farm income. Der Systemwechsel von 1989 erforderte auch in der Tschechischen Republik eine Neuorganisation nicht nur der landwirtschaftlichen Produktion, sondern auch der Organisationen zur Unterstützung der landwirtschaftlichen Produzenten. In diesen Tagen ist die landwirtschaftliche Produktion durch eine ausgeprägte Zweiteilung charakterisiert: Große juristische Personen auf der einen Seite sowie relativ kleine Privatbetriebe auf der anderen. Allerdings sind innerhalb dieser beiden Gruppen große Unterschiede in Hinblick auf den wirtschaftlichen Erfolg zu beobachten. Gewöhnlich wird dies mit einem unterschiedlichen Einsatz der traditionellen Produktionsfaktoren Boden, Arbeit und Kapital erklärt. Ob die Fähigkeit, sich mit anderen Betrieben auszutauschen und zusammenzuarbeiten, einen zusätzlichen Erklärungsfaktor darstellt, wird seit einiger Zeit unter dem Konzept des Sozialkapitals diskutiert. Dies wird hier analysiert. An Hand einer Befragung von 62 tschechischen Betriebsleitern kann mit Hilfe einer Faktoren- und Regressionsanalyse nachgewiesen werden, dass Sozialkapital einen wichtigen Einflussfaktor auf das landwirtschaftliche Einkommen darstellt.

This paper aims to investigate whether distributional issues within corporate farms in the New Member States will be exacerbated by the introduction of the CAP direct payments. The paper focuses on the specific impact of the payments on the land rented to the corporate farms by private landowners. If the latter are not satisfied with the level of rent they receive, they have the option to end their rental contract and withdraw their land from the farm. Before the accession to the EU the landowners did not have strong incentives to withdraw, as the other available opportunities were not associated with higher returns on land ownership. However, this situation might change as the landowners can now cash the direct payments themselves, providing they keep their land in good agricultural and environmental condition. Propositions generated by a simple game, representing the negotiations between a corporate farm manager and an individual landowner about the level of the rent, suggests that the CAP direct payments might induce more rent renegotiations but that overall withdrawals will be infrequent. The results from a survey of landowners in corporate farms in Slovakia and in the Czech Republic seemed to corroborate these a priori expectations. The investigation of the determinants of landowners' intended behaviour showed that what seems to be important in the decision-making is the relationship between landowners and managers. Landowners who have frequent contacts and close relations with the farm are less likely to withdraw.

The paper presents a comparative analysis of the productivity of small and large farms in Moldova based primarily on cross-section data from three farm surveys conducted by the World Bank and USAID in 2000 and 2003. The survey data are supplemented where feasible with time series from official national-level statistics. We calculate partial land and labor productivity, total factor productivity, and technical efficiency scores (using Stochastic Frontier and Data Envelopment Analysis algorithms) for the two categories of small individual farms and large corporate farms. Our results demonstrate with considerable confidence that small individual farms in Moldova are more productive and more efficient than large corporate farms. This finding is not restricted to Moldova, as a similar result has been obtained by other authors in Russia (2005) and in the U.S. (2002), where a recent study has found that an increase of farm size reduces, rather than increases, agricultural productivity. Policies encouraging a shift from large corporate farms to smaller individual farms, rather than the reverse, can be expected to produce beneficial results for Moldovan agriculture and the economy in general. The government of Moldova should abandon its inherited preference for large-scale corporate farms and concentrate on policies to improve the operating conditions for small individual farms. At the very least, the government should ensure a level playing field for farms of all sizes and organizational forms, and desist from biasing its policies in favor of large farms.

The change of the political regime from the socialist central planning system to a market economy and pluralistic society required the reorganisation not only of agricultural production, but also of the organisations in their support. In the Czech Republic, agricultural production is characterised by a dualistic structure in these days, i.e. private farmers on the one side and corporate farms on the other. However, among both groups some had been economically more successful than others. In general, a varying adoption of production factors, i.e. land, labour and capital is identified as being of influence. Whether their ability to collaborate with other farms is an additional factor, which has been discussed under the concept of social capital since quite some time, will be analysed in this paper. Based on the findings of a survey among a sample of 62 farms by adopting factor and multiple regression analysis it can be deduced that social capital is indeed a significant factor determining the level of farm income.

This paper aims to investigate whether distributional issues within corporate farms in the New Member States (NMS) will be exacerbated by the introduction of the Common Agricultural Policy (CAP) direct payments. The payments are allocated on a per hectare basis under the Single Area Payment Scheme (SAPS), without an obligation to produce at all but providing that the land is kept in good agricultural and environmental conditions. In this context one major challenge faced by the farming sectors in the NMS relates to the viability of their corporate farms, which consist of various stakeholders. As the CAP direct payments will be allocated to farm holdings, they might exacerbate the distributional conflicts among these stakeholders regarding the way profit (including direct payments) is distributed between investment, dividends, rentals and wages. If the stakeholders are not satisfied with the manager’s decision to use the payments, they have the option to exit the corporate farm, which may lead to its disappearance. The conflicts between managers and landowners are crucial, as corporate farms rent most of their utilised agricultural area from individual landowners. Before the accession to the EU the landowners did not have strong incentives to withdraw their land, as the other available opportunities were not associated with higher returns on land ownership. However, this situation might change as landowners can cash the direct payments themselves, providing they keep their land in good condition. The paper focuses on the specific impact of the direct payments on the rent negotiations between corporate farms and private landowners. Game theory is used to model the negotiations between a corporate farm’s manager and a representative landowner. The model suggests that the CAP direct payments might induce more rent renegotiations, and that the latter will be successful and thus not followed by withdrawals. Results from a survey of 381 landowners in Slovakia and the Czech Republic corroborate these findings. They indicate a potential change in landowners’ behaviour induced by the introduction of the CAP direct payments, namely that more landowners intend to renegotiate their rent level in the next five years. All this leads to the conclusion that the CAP support will not result in the quick disappearance of corporate farms.

This paper aims to investigate whether distributional issues within corporate farms in the New Member States will be exacerbated by the introduction of the Common Agricultural Policy (CAP) direct payments. The paper focuses on the specific impact of the direct payments on the rent negotiations between corporate farms and private landowners. If the latter are not satisfied with the level of rent they receive, they have the option to end their rental contract and withdraw their land from the farm. In this paper, game theory is used to model the negotiations between a corporate farm’s manager and a representative landowner. The model suggests that the CAP direct payments might induce more rent renegotiations, and that the latter will be successful and thus not followed by withdrawals. Results from a survey of thirty-three landowners in Slovakia and the Czech Republic corroborate these findings. They indicate a potential change in landowners’ behaviour induced by the introduction of the CAP direct payments, namely that more landowners intend to renegotiate their rent level in the next five years. All this leads to the conclusion that the CAP support will not result in the quick disappearance of corporate farms.

The paper analyses the relationship between the financial structure of the different institutional units in the Czech Republic and their performance, by testing several theoretical hypotheses. It employs Data Envelopment Analysis to estimate separately corporate and individual farms’ technical efficiency, and investigates the effect of indebtedness on efficiency in a second stage, accounting for potential endogeneity. No substantial differences were detected between individual and corporate farms. For both groups higher long-term indebtedness negatively affects farm performance (agency theory and adjustment hypothesis), while the latter is used for appraising loan applications (credit evaluation). Case studies to banks and farms confirmed these findings.

In the Czech Republic, agricultural production is still dominated by corporate farms. However, not all of them had been equally successful, economically. In general, a varying adoption of production factors is identified as being of influence. Whether their ability to collaborate with other farms is an additional factor which has been discussed under the concept of social capital since quite some time will be analysed in this paper. Based on the findings of a survey among a sample of 166 corporate farms by adopting factor and multiple regression analysis it can be deduced that social capital is indeed a significant factor determining the level of agricultural income.

This report examines literature concerning (1) the link between farm scale and community welfare, and (2) the economic interface between agriculture and rural industrialization. Several farm region case studies conclude that employment and social services are more varied where smaller, family farms prevail, in other words, where agriculture is less "industrial". Other studies, undertaken in rural areas where industry has located, indicate that part-time farmers may benefit from greater employment opportunities if their skill levels match industry's demand.

In 1968, of the total of 3.1 million farm tax returns filed, only 20,000 were from farm corporations. Even this small number represents an increase, but most of this increase is in corporations using the subchapter S option. These are closely held corporations, taxed like partnerships. Farm corporations as a group tended to have more losses and lower returns, with greater variability than certain other corporate industries. The 1963-68 average rate of earning on assets (cost or acquisition value) was 4.5 percent and the rate of return on equity was 5.3 percent. Farm corporations had moderate financial strength. Equity capital was 39 percent of the total. More than half of the assets of farm corporations were invested in land and depreciable assets. The slow turnover rate on these assets and low profit margin on receipts contributed to the low returns on assets and equity. In 1968, farm corporations averaged $317,000 in assets, produced $260,000 in receipts, and earned $17,000 net income.

In 1968, some 13,300 farming corporations accounted for 1 percent of all commercial farms and operated 7 percent of the farmland. California and Florida had about one-fifth of the total number and some of the largest corporate farming operations. Nearly two-thirds of farming corporations were family owned and controlled. Since farming corporations tend to be closely held, the owners were usually involved in management. However, only one-third of the 12 average employees were either stockholders or stockholder relatives. Farming was the only business activity for the two-thirds of the corporations. Others had farm-related business and nonfarm-related business. The farm product sales of corporations was about $3.3 billion or 8 percent of total sales from all farms in 1967.