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Small farm as sustainable nexus of contracts: understanding the role of human capital and policy based on evidence from Poland

Author

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  • Bazyli Czyżewski

    (Poznan University of Economics and Business)

  • Agnieszka Poczta-Wajda

    (Poznan University of Economics and Business)

  • Piotr Kułyk

    (University of Zielona Góra)

  • Jolanta Drozdz

    (Vilnius University)

Abstract

The concept of the nexus of contracts, derived from transaction cost economics (TCE), provides a holistic view of the production entity in agriculture from the perspective of a whole food system. TCE has been criticized, however, because it focuses exclusively on cognitive limitations of rationality that may prevent a transaction from occurring. An extended approach to human capital (HC), which includes so-called hidden HC, can address the doubts raised by the critiques. This study attempts to answer the question of how to shape environmentally sustainable nexus of contracts (SNC) in small-scale farming. The main objective is to assess the relationship between HC, including hidden HC, and a sustainable nexus of contracts under the influence of the European Union’s common agricultural policy (CAP). The proposed SNC comprises operations eco-management, contractual integration (hierarchy), and management of resources (labor, capital) with regard to their intensity. Structural equation modeling (SEM) with simultaneous confirmatory factor analysis (CFA) using ordinal variables was applied. The study is based on surveys performed in 2018 in Poland on a representative sample of 674 small-scale farms. It was hypothesized that the extended notion of HC is decisive for the development of SNC. This hypothesis has been confirmed, revealing the dominant role of training and participation in cultural/social events (which extend the perceptual boundaries of farmers) and indicating an almost negligible role of the length of education.

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  • Bazyli Czyżewski & Agnieszka Poczta-Wajda & Piotr Kułyk & Jolanta Drozdz, 2023. "Small farm as sustainable nexus of contracts: understanding the role of human capital and policy based on evidence from Poland," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 10239-10260, September.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:9:d:10.1007_s10668-022-02485-2
    DOI: 10.1007/s10668-022-02485-2
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