Adapting to land reform: Self-selection, production and the response of subsistence farmers to land restitution in post-Socialist Romania

The collapse of communism in Romania held the promise of a revival of private, small-scale farming. Some theorists and observers expected that collectivised agricultural producers would quickly return to private farming on the assumption that farmers would prefer this type of farming and that it is more desirable in terms of economic efficiency. Overall, the Romanian transition experience has not fulfilled these expectations. The agricultural sector has become stagnant. Furthermore, cooperative farms have remained remarkably persistent throughout the southern region.; Given these apparent conundrums and the fundamental importance of the agrarian sector to the Romanian economy it is important to understand farmer behaviour in the context of market transition. This dissertation attempts to answer two large questions: why are farmers continuing to place land in cooperative forms of farming when theory suggests that private farming is more productive and, are there efficiency gains to be had from cooperative farming endeavours. The dissertation traces the macropolitical land reform choice of restitution taken in 1991 to its effects on contemporary agrarian structure. A range of organisational farm profiles are described through analysis of qualitative fieldwork. An econometric analysis of the determinants of farm organisational choice shows that farm choice is reflective of a range of economic resource constraints facing landowners. Also important in explaining current land tenure patterns are a variety of political and social constraints. Identifying and alleviating agricultural constraints that have been created or exacerbated by recent land reforms is of fundamental importance if the Government wishes to promote a dynamic agricultural sector.; This dissertation suggests that many farmers, particularly the aged and capital-constrained, who decided to remain in large associations in the early 1990's, have become locked into this type of farming. Results from an econometric selection model suggest that smaller, endogenously developed farming associations, such as family societies, provide benefits over private farming strategies under certain conditions. Importantly, this study questions the wholesale rejection of cooperation around production and sensitises the reader to a spectrum of institutional farming forms that are rarely discussed in the literature on Romanian agriculture.