Subsistence Agriculture in Transition Economies: Its Roles and Determinants

Abstract

This paper discusses some beneficial effects of subsistence agriculture with emphasis on transition countries. Micro‐economic models of subsistence agriculture are reviewed and a two‐stage decision model, combining risk aversion and transaction costs explanations for subsistence is developed. The role of subsistence agriculture is addressed in a static comparison to a purely commercial agriculture. We argue that subsistence can play a stabilising role and have beneficial impacts on the agricultural sector when the resources it employs are unwanted by the commercial sector. The exact conditions under which the latter is true are analysed in a static general equilibrium framework. Employing the concept of the subsistence level of consumption, the paper demonstrates that these static effects can be valid in a dynamic perspective, provided additional conditions are met. Policy recommendations with regard to agricultural commercialisation are presented. These explicitly rely upon assumptions about the orientation of subsistence farmers. The lack of current research into this important behavioural feature of farmers in transition countries requires urgent action. There is urgent need for more research into the motivation, objectives and behaviour of subsistence farmers in rural economies of countries in transition.

Socio-economic assessment on maize production and adoption of open pollinated improved varieties in Dang, Nepal

“…Fadare et al (2014) used probit regression model to study the factors affecting adoption decision of improved maize varieties in Nigeria. In a like manner, Kafle (2010) also used probit model to analyze the factors affecting the decision to adopt improved maize varieties in developing countries. In contrary to this, Kafle and Shah (2012) used the binary logistic regression to identify the socio-economic and farm characteristics affecting the decision in adoption of hybrid maize varieties.…”

Pathway analysis of vegetable farming commercialization in Indonesia

“…Agricultural commercialization is an important process of agricultural transformation (Pingali, 1997); despite the fact that subsistence agriculture has an important role in transition countries. The subsistence agriculture plays a buffering role and provides beneficial impacts on the agricultural sector when the resources it employs are unacceptable to the commercial sector (Kostov & Lingard, 2004).…”

Risk perception, attitudes towards risk and risk management: evidence and implications

“…Second, given the important role of non-agricultural activities for farm households dealing with risk and uncertainty, there could be an important role for policy makers in the agricultural risk management that is situated outside the agricultural policy domain, but rather in the rural and regional development domain. A series of paper by Kostov and Lingard (2001; first introduced the idea that rural development can serve the purpose of risk management. The idea is that rural development broadens the opportunities for employment, income and farm-related activities such as agri-tourism and short supply chains.…”