Is Human Capital for Leaders Important in the Growth of Family Farms?

Like in developed countries, during the last two decades the number of Hungarian family farms has declined with the increase in their average farm size. To identify the drivers of farm size growth, the paper investigates the importance of leadership skills in Hungarian family farms using Farm Accountancy Data Network dataset between 2007 and 2015. The application of quantile regression models and their findings suggest that leadership skills have a little effect on the growth of Hungarian family farms. In contrary to the skills, general characteristics of family farms, such as farm size, farm types, and state subsidies, determine the growth of Hungarian family farms. Consistently with the previous studies, smaller family farms grew faster than bigger family farms. The non-linear relationship between farm size growth and farm types as well as state subsidies is confirmed by different quantiles of farm size. The findings suggest the ongoing process of family farm restructuring depending on their size and pertained family farm characteristics and government policies. Farms market selection process and farms restructuring with the decline in the number of farms and their growth are likely to continue that can be caused by climate change, robotization and digitalization of farms, but depending on restructuring and resilience of different farm types