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Possible reasons for this failure to expand are explored in the conclusions.


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Like commercially oriented farms, subsistence farms could be defined in many ways. We keep a narrow definition. These are households which report no member regularly employed 13 and no sales of agricultural products. They depend almost entirely on their farm for survival Three hundred and ten of them contain no working age members, however. These retired persons own more land than other households in the group, but they farm very small amounts 0.

The majority of their land is put into cooperatives 0. Retirees own almost no agricultural machinery. We exclude them from our analysis in order to focus attention on the possible emergence of households with working age members who depend entirely on their own non-commercial production for survival, seeming to return to the practices of pre-war agriculture.

Most land not used by the households was rented to others 0. Subsistence farming households left almost no land idle. In this sense, subsistence farmers as we have defined them are not different from the overall group of landholders. What makes the subsistence farming group distinct is their dependence on farming -the absence of an employment income from outside agriculture.


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With no regular job and no marketed production, subsistence farming households had the lowest per capita cash incomes of any group, of which a large part came from pensions and the rest from occasional work. Perhaps those renters offer higher returns than the households could hope to earn themselves, either because the households cannot access needed capital, or because the other farms enjoy economies of scale not achievable by these farms.

Subsistence farmers were under-represented in the grain-growing region of the North-West, and slightly over-represented in the South-East, which is far from most urban markets, but otherwise they were not clustered in any particular region. These households had at least one income from regular employment outside agriculture, which they combined with agricultural production mainly for personal use.

Forward to the Past ? Agricultural Restructuring in Bulgaria

They own an average of 1. The largest share of the remaining land 0. Supplementary farm households had about 3. Using their off-farm income, these households are more likely than subsistence farmers to spend money on agricultural inputs, and they spent an average of just under leva. They buy the same mix of inputs. They were much more likely to produce milk and milk products than were subsistence households, however, allowing them to diversify their consumption. When supplementary farming households did market production, milk was the most frequently sold product, followed by potatoes and sheep.

While these households did have land which they did not use, they mainly rented it to others. Their household members were fully employed. Poorly developed land markets may make it difficult to adjust landholdings, limited labor markets may limit the labor recruitment during peak periods, and weak credit markets may restrain the capital substitution for labor, or capital acquisition needed to complement existing labor or landholdings.

Proximity to urban markets may reduce costs and increase awareness of market opportunities. Agricultural traditions and infrastructure differ significantly across the regions of Bulgaria, in part due to specialization under socialist planning. These differences were important in explaining patterns of de-collectivization of land during the early s Meurs , Given the significant levels of pensions received by the households examined above, we investigate whether higher-pension households are less likely to farm for cash social welfare payments are insignificant for the landholding households.

Because of the necessarily subjective nature of our definitions of commercial and subsistence farming, we also examine factors related to the sale of any production at all in a third probit model. The previous descriptive analysis suggests that the families use rental markets to adjust their landholdings, and that the households generally prefer to farm less land than they own. We do not, therefore, expect landholding size to be a significant factor in farm orientation.

Households have few working age members on average, however, and few of them use labor markets to adjust their labor inputs into agriculture, so the availability of labor may play a significant role in household choices of how to drive their activities. The large, collectively owned farms persisting in grain-growing regions may enjoy economies of scale, offering higher returns and making other commercial uses of land less viable.

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These region variables may capture access to both urban markets and off-farm employment, as well as characteristics of physical geography. As is the case for dummy variables, one region is omitted from the regression. Coefficients on other regional variables measure the impact of being in that region, as compared to the omitted region. Finally, to examine whether pension payments create disincentives for market activity, we include the number of pension-aged people in the household in the regression.

In this analysis, the outcome variable takes a value of one if the household has specified orientation commercial farming, for example and zero otherwise. The regression results report the marginal effects on household and local characteristics on farm orientation. Specifically, they estimate the impact of a one-unit change in household or local characteristics on the likelihood that an average household will have the specified orientation For all regressions, we find variables which have a statistically significant relationship to the orientation of the household.

But much of the variation in household orientation remains unexplained, as seen in the low pseudo-R2. Other factors also play a significant role in the household orientation. Dependent Variable. Commercial Farms. Independent Variables. Marginal Effect.

Land Owned ha. Working Age Members. Controlling for region, the share of land traditionally used for grain had an unexpected positive impact of the likelihood of producing mainly for sale. Perhaps this oblast-level variable captures within-region differences in the suitability of land for agriculture slope. Only location had an impact. It is an area with a relatively mixed ethnic population, including significant representations of Roma and muslims, and with some areas devoted to tobacco farming.

Neither land nor labor available seemed to affect the decision to farm only for subsistence. Further, pensions do not appear to encourage withdrawal from labor markets and limitation of production for sale. An additional working aged member significantly increased the likelihood of selling some production. As was the case with commercial farmers, location in Region 3, the North-East, had a big negative impact on the likelihood of producing something for sale, while location in Region 5 increased it.

Again, landholding size and the availability of pension payments pay no role in the likelihood that a household will market some production. Not surprisingly, given the aggregate data on declining land use in agriculture, and the evidence that most households use rental markets to adjust their landholdings, there is no evidence that small land-holding sizes affect household choices to engage in market production.

Key Findings

The most consistent and important factor in likelihood of market production is the presence of additional available labor. Pensions, as shown by the number of pension-aged members in a household, do not appear to provide a disincentive to produce a surplus for sale. At the same time, the amount of agricultural land in use in Bulgaria has fallen and machine power available in agricultural has also declined dramatically Ministry of Agriculture, A much smaller share of land is now farmed in large-scale, mechanized farms.

2 Spatial dimension of the transformation process

The former devote significant resources to agricultural production for sale and earn an important share of income from these sales. These households, focused mainly on vegetable farming, are most likely to be located in the southern regions of the country, rather than in the historically grain-growing regions of the north.

"Dual Economy" -Aspects of Hungary´s economic transformation process

Subsistence farms practice very low-input agriculture and produce nothing for sale, despite having no member regularly employed in off-farm work and very low incomes. Subsistence households are distributed more evenly across plans and non-plains regions. First, why do these families not expand their activities onto a larger share of their owned land?

And second, why do subsistence households and non-farming landowning households without alternative income sources not use available land and labor to produce for sale? Small landholding size does not appear to play an important role in the decisions of how to use the land, as households use rental markets to adjust the size and location of their farm. Farms do not yet use hired labor regularly, and the number of adults in a household does appear to play a role in land use decisions, but subsistence farming households seem to have labor available to intensify production.

In conclusion, however, we offer three possible reasons for this. Hertz found that credit constraints did not appear a limiting factor in agricultural production, given that agricultural households borrow for consumption. But perhaps households find it easier to borrow find that the commercially-oriented households also have the highest employment incomes, which may permit greater investment in agricultural production. Without production credit, lower income families may be unable to finance the capital or inputs needed to make expansion and intensification profitable.

This is evidenced by the large-scale withdrawal of land from agricultural use, the recent expansion of meadows and pastures in the place of arable land, even as livestock herds decline, and the radical fall in the use of purchased inputs. Returns may not outweigh costs of expanded or intensified production. Significant restructuring may still lie in the future for the Bulgarian corner of southeastern Europe. Haan P. Jones D. Ministry of Agriculture, Agricultural Census in Bulgaria.

Bell, Howard Raiffa, and Amos Tversky, eds. Farms, however, remained large-scale. From , numbers of all types of livestock fell dramatically, with the exception of goats BNIS, various years. Our data do not allow us to distinguish well which households live in urban areas, or the distance between residence and owned land, so included in this group are both urban households, and rural households which own land where they do not reside.