Transition and Enterprise Restructuring: The Development of Individual Farming in Romania

Economic reforms have induced enterprise restructuring in transition countries. In agriculture, the most dramatic form of restructuring is the break-up of state and collective farms into individual farms. The development of individual farming varies strongly between countries, regions and households. This paper uses household-level data from a 1996 survey in Romania to analyze which household and regional characteristics determine the shift to individual farming. Individual farming is influenced by several household characteristics, such as the human capital (education, age, farming experience), physical capital endowments (ownership of land, buildings, machinery, livestock) and access to other finance sources (off-farm wages, pensions). Furthermore, environmental factors, such as infrastructure, local access to inputs, and the pre-reform importance of individual farming in the region, all affect the development of individual farming.