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Family farm succession

Family farm succession in two Transylvanian villages- what future for the structure of smallholdings? . Family farm succession. The study of transmission of responsibility for decision making within the farm family. Why study family farm succession?. To know who is making decisions

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Family farm succession

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  1. Family farm succession in two Transylvanian villages- what future for the structure of smallholdings?

  2. Family farm succession The study of transmission of responsibility for decision making within the farm family.

  3. Why study family farm succession? • To know who is making decisions • To correctly target policy • To better visualise future transformations (Gassonand Errington 1993, Errington and Lobley2002)

  4. Succession/Successor Effect (Potter and Lobley 1996)

  5. Succession cycle (Kemp 1999, Calus 2008) Successor Selection Succession process Death of parents Successor in charge Retirement of previous generation Birth of new generation Inheritance event

  6. Farmtransfers • Study developed by Andrew Errington in early 1990s • Standardised quantitative survey • Performed in many regions of America, Canada, Europe and also Japan in last 20 years

  7. Farmtransfers in Transylvania • Survey performed in S and in T in winters of 2009 and 2010 • Different methodology, so fewer results

  8. Ages and Farm Sizes

  9. Farm size

  10. Age of farmers

  11. Retirement plans

  12. Identification of successor • Romanian respondents may confuse ‘successor’ with ‘inheritor’ Data from this survey, Nemenyi 2007 and Uchiyama 2007

  13. In both ethnicities, there is a greater probability of presence of a successor where the farm is over 5ha in size. This is consistent with research linking likelihood of succession with farm size (Erringtonand Lobley 2002, Calus 2009). In order to have a farm over the size of 10ha (due to the effects of the land restitution law 18/1991, where original applications were limited to a maximum of 10ha), the farmer must have invested in his farm after decollectivisation either through purchase of land, renting land or investing time in subsequent land restitution claims.

  14. In both ethnicities, there is a greater probability of presence of a successor where the farm is over 5ha in size. This is consistent with research linking likelihood of succession with farm size (Erringtonand Lobley 2002, Calus 2009). In order to have a farm over the size of 10ha (due to the effects of the land restitution law 18/1991, where original applications were limited to a maximum of 10ha), the farmer must have invested in his farm after decollectivisation either through purchase of land, renting land or investing time in subsequent land restitution claims.

  15. Activity of successor • 50% designated successors have no active role on the farm (either working or studying elsewhere) • Where successor works on farm, has small decision making responsibility (beginning of succession process) • Level of responsibility of successor correlated with age

  16. Inheritance and succession • Three elements of farm replication: retirement, succession and inheritance (Errington and Lobley 2002) • Romanian inheritance laws and traditions follow Napoleonic tradition • What influence of Communist notions of ‘property’ and therefore inheritance for small farms?

  17. Ethnic and generational differences in inheritance • Hungarians more likely to pass on land in one unit • Younger farmers more likely to pass on farm in one unit (to one.

  18. Retirement and Succession • Importance of discussion of retirement plans for future planning • Lack of communication creates ‘Nash Equilibrium’ -neither successor nor decision maker can make changes to the farm/plans for the farm due to lack of information about the other’s intentions (Calus 2009) • Hungarian families were more likely to discuss plans for retirement with their families than Romanian ones

  19. Succession/Successor Effect (Potter and Lobley 1996)

  20. Hypotheses for absence of succession ladder • Short time horizons -> lack of long term planning • Block to retirement • Issue of ‘ownership’, property • Lack of intergenerational discussion

  21. Succession cycle (Kemp 1999, Calus 2008) Successor Selection Succession process Successor in charge Retirement of previous generation Birth of new generation

  22. Conclusions? • Succession as defined by Errington and other academics does exist in Romania • Weak succession ladder • Division between succession and inheritance • Issues of communication and inability to retire

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