Willingness to cooperate among fieldcrop farms: An illustration from Hungary

Abstract

Concluding cooperation agreements between individual farmers is one of the realistic possibilities to ensure the viability of farms, to improve profitability and increase competitiveness in Hungarian agriculture. The paper analyses the agreements of farmers for joint machine use, focusing basically on the role of economic factors in these agreements. The results of the research point out that the economic factors (such as: size of potential income, subsidisation, capacity supply and capacity shortage) statistically provably determine cooperation willingness. We have stated on the basis of empirical analysis of Hungarian farms that none of the institutional solutions for joint machine use will have any role in the near future, in which the dependence of farmers is strong (e.g. based on joint ownership).

Keywords:

• Collaboration
• transaction cost theory
• utilisation of machines
• virtual large-scale farm

Acknowledgements

The research was supported by the K 63231 theme of the Hungarian Research Fund (OTKA). The authors also thank the reviewers of the article for the valuable suggestions and comments.

Notes

1. The cooperation in wider sense also includes – besides the narrow concept – the machine lease service contracts. This aspect was not included in the examination.

2. Due to methodological reasons, the activity values in COOP_3 form of cooperation were transformed to dual-value variables: 1-cooperates; 0-does not cooperate. So in this case, the statistical analysis was performed by use of a binary logistics regression model.

3. Reviewing the quality aspects of asset supply we can state that the larger is the farm size, the higher performance category, more modern, higher technology level machine assets are typically used in the farms, the positive impact of which can surely be detected in the quality and costs of machine work.

4. In regards to “size impact” we have to note that on the basis of special and methodological considerations, the ES index is used for the expression of farm size which also carries most of the information content of TFA and SUB variables due to the close correlation. The reason is that the ES index can integrate the weight of crop production as well as animal husbandry activities into one index. Besides it has such a standard size categorisation which is internationally accepted and applied.