Analysis of Farm Size Transition Probability by Farming Type
2024
Choi, Y.J. | Rhew, C.H. | Son, M.Y.
Korean agriculture exhibits a dual structure featuring both small and large farms. This structure faces challenges such as an aging demographic and increasing operational costs, which simultaneously promote the growth of large-scale farms and impede the competitiveness and expansion of smaller ones. This study utilizes farm household survey data to categorize farms into rice cultivation, orchards, vegetables, livestock, and part-time class II operations. We employed Markov Chain theory and an Ordered Logit Model to examine the variation in farm size across different types of farming. Our findings indicate that most farm types tend to retain the farm size from the previous year, making only minor adjustments rather than significant changes. While small and medium-sized farms generally were more likely to increase rather than decrease in size, exceptions include part-time class II farms such as those focusing on rice, orchards, and vegetables. Notably, livestock farms often maintained or increased their size, suggesting a consolidation trend towards larger operations. This ongoing trend is likely to reduce the number of small-scale farmers and increase mediumto-large operations. Despite this, the slow pace of farm consolidation suggests that the polarized structure of small and large farms will continue. These insights can aid in the more effective formulation and implementation of government support policies that take into account the distinct characteristics and size differences among farming types.
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