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Abstract

The break-up of large-scale agricultural production units into individually operated farms differs considerably across Central and Eastern European countries. Family farming is not well developed in countries where large-scale successor organizations to the former state and collective farms still dominate, such as Slovakia, Hungary and the Czech Republic. However, family farms are important in Albania and Latvia, where a massive break-up of the collective farms resulted in a domination of small-scale production units. Also within countries there exist wide variations in the decollectivization of different regions and agricultural subsectors. We develop an economic model of decollectivization to explain these variations and derive a series of propositions regarding factors affecting the decollectivization process. Our empirical analysis presents remarkable correlations between decollectivization and our explanatory variables. Specifically, they suggest the importance of relative productivity, factor intensity and privatization procedures in explaining differences between countries in decollectivization.

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