Family farm dynamics in Canada and Israel: the case of farm exits

Abstract

Canada is one of the few countries for which data exist on individual family farms over time. Using these data, researchers have been able to show that much of the microdynamics of family farms in Canada (e.g. changes in size distribution) can be attributed to farmer entry and exit. However, the behavioral aspects of the exit decision received little attention in the literature. A comparison of Canadian and Israeli data could help us understand these behavioral aspects because of the vast institutional differences between the farm sectors in the two countries, and the possible effect of the institutional setup on exit decisions. Comparison of exit patterns may enable us to identify the dependence of farmers' mobility on the institutional setup. This may also have policy relevance. In both Canada and Israel, exit probability decreases with the extent of off-farm work. We conclude that off-farm work is complementary rather than a substitute for farm work, perhaps due to its less volatile nature. Both, Canadian and Israeli farmers over a certain age are more likely to exit as they become older, which is a natural result, but exit probability in Canada rises much faster with age than in Israel. The major difference between Canadian and Israeli farm-exit patterns lies in the farm size. Farm size decreases exit probability in Canada but increases it in Israel. Perhaps this is because Israeli farm exits are less planned in advance than Canadian exits. Institutional constraints on land transactions in Israel may also playa role.

Spousal Effect and Timing of Retirement

“…In earlier studies, the probability of transferring the farm to a new entrant has been found first to increase with a farmer's age and then beyond a certain age limit to decrease (Kimhi and Bollman, 1999;Stiglbauer and Weiss, 2000;Kimhi and Nachlieli, 2001). This is especially the case in family successions.…”

“…Previous studies on farmers' exit decisions have used, multinomial logit (e.g. Stiglbauer and Weiss, 2000), probit (Kimhi and Bollman, 1999;Kimhi and Nachlieli, 2001) or bivariate probit models (Glauben et al, 2004). Earlier studies on spousal retirement behaviour and retirement decisions, on the other hand, have used among others competing risk duration models (e.g.…”

“…When studying farmers' exit behaviour in different countries, institutional differences and constraints are found to matter (Kimhi and Bollman, 1999;Errington and Lobley, 2002). In the European Union, farmers' early retirement provisions are carried out according to the Rural Development Regulation of the CAP (EC Council Regulation 1257/1999).…”

Self‐reported Resilience of European Farms With and Without the CAP

“…studies on farm exit (e.g. Kimhi and Bollman, 1999;Weiss, 1999;Dries and Swinnen, 2004;Glauben et al, 2004). Moreover, these studies do not use the analytical framework of tipping points and resilience.…”

Off‐Farm Work, Intensity of Government Payments, and Farm Exits: Evidence from a National Survey in the United States

“…A probit model was constructed to estimate the exit probability and to seek the determinants of exit behavior. The main finding of Kimhi and Bollman's (1999) study was that the dependency of exit behavior on farm size differs between the two countries mainly due to institutional differences. The authors also found that the exit probability decreased with the extent of off-farm work in both Israel and Canada.…”