Increasing or Decreasing Scale? The Pros and Cons of Farm Size for Financial Sustainability

Vanya Georgieva

DOI 10.7160/aol.2024.160203
No 2/2024, June
pp. 39-49

Georgieva, V. (2024) "Increasing or Decreasing Scale? The Pros and Cons of Farm Size for Financial Sustainability", AGRIS on-line Papers in Economics and Informatics, Vol. 16, No. 2, pp. 39-49. ISSN1804-1930. DOI 10.7160/aol.2024.160203.

Abstract

The article focuses on the question of optimal farm size in the context of contemporary agricultural challenges such as rapid population growth, climate change, and limited natural resources. The analysis shows that farm economic size can have a significant impact on financial performance indicators including productivity, profitability, liquidity, solvency, and sustainability. The article provides a detailed overview of the pros and cons of different farm economic sizes and their impact on financial sustainability, drawing on academic literature, available data, and statistical methods. The results indicate that larger farms have lower factor productivity but higher solvency. Smaller farms on the other hand have higher profitability and productivity. Medium-sized farms are characterized by high liquidity and financial autonomy.

Keywords

Economic size, farms, financial sustainability.

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