Young farmers’ opportunity to enter and maintain farming through tenancy : a multiple case study in Southern Sweden
The agricultural sector is capital intensive compared with other industries and the conditions for managing a farm have changed during the recent decades. During the past few years, the price of farmland and rental rates have increased which results in difficulties to maintain a stable and profitabl...
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| Format: | H2 |
| Language: | Inglés Swedish |
| Published: |
SLU/Dept. of Economics
2018
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| Summary: | The agricultural sector is capital intensive compared with other industries and the conditions for managing a farm have changed during the recent decades. During the past few years, the price of farmland and rental rates have increased which results in difficulties to maintain a stable and profitable business. Furthermore, the average age of farmers in Sweden is 58 years old and the number of retired farmers will increase in the future. Right timing of transferring the farm’s to the next generation has a significant impact on the business development and future profitability and therefore it is necessary to consider the problem with the increasing age. Young farmers tend to have more tenancy agreements and less owned arable land. This is because young farmers do not have any other option than enter tenancy agreements since they usually do not have sufficient capital, or the income will not be good enough to meet the financing payments. This study focuses on to connect the principal-agent theory and the stakeholder theory to the problem concerning young farmers’ opportunity to enter and maintain farming through tenancy. The aim of the study is to increase the understanding of young farmers’ opportunities to enter and maintain farming through tenancy agreements, by analyzing the importance of a relationship between a landowner and a tenant and significant external actors. Additionally, the relevance of the relationship between the tenant and their external actors is examined.
The study applies a qualitative research approach with a multiple case study design and which entails twelve respondents. Eight of these twelve respondents are young farmers. The other four respondents are external actors within the agricultural sector that might have an impact on the young farmers’ possibility to develop their farm business. The empirical data has been analyzed through the theoretical framework, which entails the principal-agent theory and the stakeholder theory. The results of the study indicate that young farmers have difficulties to enter and maintain farming through tenancy agreements. Although, good relationships with landowners and other external parties are the most important aspects for a tenant farmer to observe. Young farmers usually face more difficult financial conditions and therefore good relationships, reputation and different unique experiences are essential for the possibility to enter farming through tenancy. |
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