What determines small farms’ succession patterns in Eastern European emerging markets? Exploring the role of embeddedness in social networks

Abstract

PurposeThe interactive relationships of farmers with institutions and other individuals create the context of succession intention – “farm embeddedness”. This context shapes in long-term self-efficacy of farmers. The main goal of this paper is to study the contextual drivers of the choice of succession paths in small-scale farms which dominate in Eastern European countries. The studied pathways, ordered by farmers’ self-efficacy are “no succession”, “conditional succession”, “unconditional internalised succession” and “unconditional externalised succession”.Design/methodology/approachWe used a sample of 1,683 small farms from three Eastern European emerging markets: Romania, Moldova and Serbia. The likelihood of choosing a given succession path is analysed using a multinomial logit model; contextual drivers of succession are selected based on the theory of embeddedness.FindingsWe found that more-educated and more-efficient small-scale farmers are less likely to pass on their farms because of a kind of “glass ceiling”, so they do not want such a difficult future for their children. The most important determinant of unconditional/internalised succession is the successor formation through “training on the farm”. Some formal institutions operating in the agricultural sector hinder self-efficacy and thus unconditional succession.Originality/valueMost of the papers lack a theoretical background while demonstrating that economic drivers are crucial to succession. The embeddedness theory argues that economic activities are always anchored in a social structure. We contribute to this theory by showing that the embeddedness in social networks is more important than economic factors when smallholders transfer their farms to successors in post-socialist countries. In addition, we attempt to identify which particular types of social networks are most relevant to the multi-stage process of farm transfer, and we outline several transfer scenarios using the concept of self-efficacy.