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Individual Farming as a Labour Sink: Evidence from Poland and Russia

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Abstract

In Poland and Russia, which provide two widely different examples of transition countries, small-scale individual farms employ more labour per hectare of land than large-scale corporate farms without suffering from lower productivity. Individual farming is a labour sink for the rural population, and land policies promoting individualization of agriculture in transition countries can alleviate the social consequences of rural unemployment without sacrificing agricultural productivity. Pending long-term development of nonagricultural employment opportunities, the average transition country should encourage the rural population to remain in agriculture by emphasising individual rather than corporate farming.

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Notes

  1. Instead of expressing the individualisation variable as a percentage, we could have divided the land variable into individual and collective land, similarly to Brown and Medoff (1978) differentiating their labour variable into union and non-union labour. Yet, the resulting specification of the equation to be estimated remains very much the same and we use the percentage form for simplicity reasons. We are grateful to Peter Orazem for calling our attention to the methodological similarity of this analysis with Brown and Medoff (1978).

  2. The results are presented for grouped individualisation categories because of the striking visual effect. Regression analyses using the level of individualisation as a continuous variable produce a positive coefficient, but it is not statistically significant.

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Acknowledgements

We acknowledge the helpful comments of session participants at the August 2002 annual meeting of the American Agricultural Economics Association in Long Beach, CA and of three anonymous referees. The second author thanks the Robert Bosch Foundation for its financial support.

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Lerman, Z., Schreinemachers, P. Individual Farming as a Labour Sink: Evidence from Poland and Russia. Comp Econ Stud 47, 675–695 (2005). https://doi.org/10.1057/palgrave.ces.8100068

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