On the nature of Bulgarian subsistence agriculture

In most countries of Central and Eastern Europe the process of transition to market economy resulted in an increasingly subsistence type of agriculture. The extent of subsistence farming varies from one country to another, but the phenomenon is universally present. The very existence, yet expansion of subsistence agriculture has been perceived as a paradox. It is sufficient to remind that it simply does not fit the definition of transition, which is viewed as a process that has to bring about the market into economy, the same market that went missing in agriculture. The latter would incline one to consider subsistence agriculture as a temporary phenomenon that will perish as transition advances. The basic textbook economic theory views subsistence agriculture as implicitly irrational and contradicting the sound economic logic and principles. This is also the prevailing opinion on the nature of subsistence agriculture in transition economies, as well as in general. This paper challenges this viewpoint and argues that subsistence agriculture is not only logical consequence from the worsened economic conditions at individual level, but it contributes to the overall market stability. Developing the argument with regard to Bulgaria, which is a country with a large share of subsistence agriculture, as an illustration, it dismisses the claims that subsistence causes waste of production resources and loss of overall welfare. Conversely, it is demonstrates that subsistence agriculture increases both production and consumption.