Farm size and growth in field crop and dairy farms in France, Hungary and Slovenia

Abstract

The aim of this article is to investigate the relationship between size and farm growth. The existing theories of the association between size and farm growth give mixed results by countries and over time. This paper pursues a twofold objective: on one hand, to test the validity of Gibrat’s Law for French, Hungarian and Slovenian specialized dairy and crop farms during the pre- and post-accession period to the European Union membership. Dairy and crops farms are prevailing in the farming structure of these countries. Using Farm Accountancy Data Network datasets makes it necessary to avoid biases due to heterogeneous structures across the farming systems. Thus we use quantile regressions to control for farm size related heterogeneity in the samples. On the other hand, the main novelty of this paper is the comparative analysis of the relationship between farm size and farm growth between transition Hungarian and Slovenian and non-transition French farming sectors, characterized by rather different farm structures. The results reject the validity of Gibrat’s Law for crop farms in Hungary and to a lesser extent in France, and for French and Slovenian dairy farms. We provide evidence that smaller farms grew faster than larger ones over the studied period 2001-2007 for France, 2001-2008 for Hungary, and 2004-2008 for Slovenia. Conversely, the results for Slovenia suggest that the rate of growth of crop farms in terms of its land is independent from its size.

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