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© 1992 Oxford University Press and the Foundation for the European Review of Agricultural Economics

research-article

Consolidation policies and small-farm agriculture in northwest Portugal*

ERIC MONKE1, FRANCISCO AVILLEZ2 and MANUELA FERRO3

1Department of Agricultural Economics, University of Arizona
2Instituto Superior de Agronomia, Universidade Tecnica de Lisboa
3Instituto Superior de Agronomia, Universidade Tecnica de Lisboa
Department of Agricultural Economies University of Arizona Tucson Arizona 85721, U.S.A.
Francisco Avillez and Manuela Ferro Instituto Superior de Agronomia Universidade Tecnica de Lisboa Lisboa Portugal

Received March 1, 1991;

Summary

This paper discusses linkages between land policy and structural change on small farms in northwest Portugal. Policy has attempted to increase farm incomes through land consolidation programs, legal limits on fragmentation, and regulations that allow credit for land purchase to be used only for consolidation. This paper uses a profit maximisation model to show that the farmer's benefits from consolidation are positively related to the capacity utilisation of own-labour and capital resources. If farm resources are under-employed, the gains from consolidation are reduced. Empirical data for small farms in Portugal show that gains from consolidation are small in comparison to the gains from growth in farm size, even if growth entails increasing fragmentation. In this circumstance, consolidation policies serve only to exclude some small farmers from opportunities for income growth.

Keywords: land policy, consolidation, structural change, agricultural development


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