Entry Barriers for Young Farmers – Do They Depend on the Size of the Holding?

Young farmers must overcome certain barriers when entering the sector. The aim of the paper is to evaluate the main obstacles in starting a farming business and to assess whether the entry barriers faced by young farmers depend on the size of a farm. We used data from electronic survey conducted among 510 young farmers in the Czech Republic. The average size of a farm was between 0 to 1000 ha (on average 42.4 ha). The farmers were divided into the following categories: those with a holding a from 0 to 5 ha – small, those with a holding a over 5 ha to 50 ha – medium, and those with a holding a over 50 ha – large. Young farmers assessed the difficulties, which they had to overcome when starting up a farm on a scale from 1 (this was certainly a barrier) to 4 (it was not a huge barrier) and 0 (it is not my case). The average score for each category and barrier was calculated. The highest barrier was administrative burden and purchase of agricultural land. Young farmers did not perceive strategic planning and purchase of livestock as a big problem. The test in contingency table revealed that almost all types of barriers statistically significantly depended on the size of the farm. Staring a business is the most difficult problem for small and middle farms, but purchase of an agricultural land and obtaining knowledge and experience is difficult for all farms to a similar axtent.


Introduction
The problems with ageing of the farmers and generational renewal in agriculture are a fact for the whole European Union. In the Czech Republic, farm managers in the age group from 55 to 64 years (32%) predominate. There are even 26.8% of farmers over 65. 22.1% of farmers are in the age group 45-54 (Eurostat, 2019). Hence, the generational renewal is critical to sustain the continuation of food supply and landscape maintenance. There might be many different reasons for this situation.
Several studies have found that the decrease in the number of young farmers has been influenced by ageing farmers' unwillingness to pass the farm to new generations due to educational, financial and motivational reasons (May et al., 2019). On the other hand, sometimes there are no successors and the farm must be taken over by another person. In this case, the process is complicated. For example, in Austria the multigenerational non-familial agrarian partnership is suggested as an adaptive strategy for survival and regeneration of peasantry (Korzenszky, 2019). Amichi et al. (2016) proposed informal indirect farming as a measure that can help to transfer lands to a young generation of farmers and help with generational renewal.
Besides, young farmers have to overcome certain barriers when entering the sector. They depend on whether the farm is inherited or taken over from family relatives or whether the young person starts without any background. It is always easier to start with an already existing farm. Farmers who start "from scratch" have to mainly overcome the lack of disposable land, lack of finances for investments, not enough experience with farming and administrative procedures (Šimpachová Pechrová, 2017).
A survey done by Ecorys (2014) in the Czech Republic revealed that "interviewed young farmers seem to consider the availability of land (to buy or to rent) and -to a lesser extent -legal issues more problematic than other young farmers in the EU". On the other hand, problems with obtaining the labour force were not so pronounced. In Thailand, the problem with obtaining a piece of land was also visible. "The support programmes helped farmers overcome their lack of farming knowledge and helped them integrate into rural communities, but the support they provided in accessing land and capital was sometimes limited, and often nonexistent" (Phiboon, Cochetel and Faysse, 2019). Carbone and Subioli (2008) found out that "the ageing of farm holders, is the result of a complex set of factors, among which the most notable are: (i) the presence of entry barriers, (ii) the presence of exit barriers, (iii) the persisting low level of factor productivity in agriculture; (iv) the presence of inter-sectoral labour force movements in the intermediate age classes". The situation is easier for them if they inherit or take the farm over from their relatives or other farmers. "When the fact that most farming businesses are operated by families is taken into consideration, it can be argued that intergenerational farm transfers are a fundamental aspect of the sustainability of farm businesses" (Uchiyama, Lobley, Errington and Yanagimura, 2008).

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics
When young farmers start from the beginning, the barriers are much higher for them. It is, therefore, logical, that in this case, they start with rather small business and develop their agricultural holdings gradually over time. We may assume that young starting farmers with small farms have higher barriers to overcome or it is more difficult for them to overcome the barriers. For example, research by Ecorys (2014) identified that "access to land is more difficult for young farmers with small farms than for young farmers with large farms" in the Czech Republic. The aim of the contribution is to assess whether the entry barriers feced by young farmers depend on the size of the holding. The results can be used for policy making. In line with the Common Agricultural Policy definition, we consider farmers under 40 years of age as "young". According to Šimpachová Pechrová and Šimpach (2018), "the measures that would help young farmers to overcome the entry barriers shall be implemented too". It is useful to observe what types of barriers are seen by farmers as the most important depending on the size of the farm.

Materials and Methods
We used primary data that were obtained by survey that was held between 14 and 30 June 2018. We sent a questionnaire electronically to about 6 thousand farmers under 40 years of age that have their land registered in the Land Parcel Identification System. We received complete answers from 510 respondents. The majority of them were males accounting for 74.9 %. The average age of respondents was 32.9 years. 42.4% of young farmers started farming without previous background (42.4%) and 41.8% took it from their parents or other relatives. 5.1% of the respondents inherited the farm. The rest of respondents obtained a farm by different ways (bought the farm from parents or other relatives, or from other farmers, joined the existing family farm, took it over partially, had their own facilities from elsewhere, etc.).
Besides identification questions, young farmers assessed the difficulties, which they had to overcome, when starting up a farm on a scale: 1 -this was certainly a barrier, 2 -this was rather a barrier, 3 -this was rather not a barrier, 4 -this was certainly not a barrier, 0 -it is not my case (I cannot assess). The evaluated barriers were: (1) strategic planning, (2) obtaining finances for a start-up of a business, (3) obtaining finances for development of a business, (4) purchase of an agricultural land, (5) lease of an agricultural land, (6) purchase of livestock, (7) purchase of properties, (8) lease of properties, (9) purchase of other fixed assets, (10) lease of other fixed assets, (11) acquiring qualified workers, (12) acquiring non-qualified workers, (13) ensuring sales, (14) administrative burden, (15) obtaining knowledge and experience. Table 1 describes a sample of respondents. The majority (483) of farmers were physical persons, 135 were organic farms. The average size of a farm was 42.4 ha, minimum was 0 (only livestock production involved 12 farms) and maximum 1000. The farmers were divided to three categories according to the size: (1) those with a holding from 0 to 5 ha-small (there were 114 of them), (2) those with a holding over 5 ha to 50 ha -medium (278 cases) and (3) those with a holding over 50 halarge (118). The division was made in order to balance the numbers of farm in each category. The average mark for each category and barrier was calculated. As the variables are categorical, they were placed in the contingency table with 5 rows (r) and 3 columns (c). Let O ij be the observed count for the i th row (i = 1 to R) and j th column (j = 1 to C). Then, the contingency table can be displayed as in Table 2 and empirical frequencies are calculated.

1(362) 2020
Where: The total number of counts in the table is calculated In the contingency table, it was tested whether there are statistically significant differences between marks in each category. Zero hypothesis H 0 assumed that the characters are statistically independent. We use χ 2 test with calculated criterion Pearson's test statistic follows an asymptotic χ 2 distribution with (R -1)(C -1) degrees of freedom when the row and column variables are independent. When the calculated criterion exceeds the tabled value of χ 2 distribution at a chosen level of significance (0.05 in our case), then the null hypothesis is rejected. Then the characteristics are independent. Calculations were done in the MS Excel sheet.

Results and discussion
Based on the primary research, we found out what were the highest and the lowest barriers. The lower the average score, the more vital the problem is.
The highest barrier was the purchase of an agricultural land and administrative burden. The average calculated scores were 1.3 and 1.5, respectively. 62.2% of respondents answered that the purchase of a land was certainly difficult and 15.5% rather difficult for them during setting up of their business. This finding is in line with Ecorys (2015) research where over 75% of asked young farmers considered availability of land to buy as a challenge for their business. The availability of land to rent was perceived by 42.5% as certainly difficult and by 26.9% as rather difficult, but in Ecorys (2015) almost 72% of farmers perceived this as a problem. In our case, 62.0% found administration-related issues certainly difficult and 20.8% rather difficult when starting a farming business, whereas other legal issues were considered as important by 28% of respondents in the Ecorys (2005) research.
On the other hand, young farmers did not perceive strategic planning as a big problem (only 16.7% responded "certainly yes" and 21.4% "rather yes", the average score was 2.6) and purchase of livestock (only 16.7% responded "certainly ye"s and 14.3% "rather yes", the average score was 2.6). From the Ecorys (2014) study, it is apparent that the least important obstacle was obtaining the insurance and the interventions of parents or other persons as well as acquiring seasonal workers. Also, our study confirms that acquiring qualified (average score 2.0) and non-qualified (2.3) workers is not a big deal for farmers. We did not observe obtaining of knowledge and experience in such detail as the Ecorys (2014) study, which was aimed at examination of the information, vocational training and educational needs of young farmers. According to ERDN (2018) workshop, Europe's young farmers and new entrants face three significant hurdles in realizing their ambitions: access to land, access to finance and access to training and knowledge. Figure 1 shows the results of the assessment of needs. The lower the average mark, the more difficult the activity for starting farmers is.
Consequently, it was tested, whether the barriers statistically significantly depend on the size of the farm. Empirical and theoretical absolute frequencies are displayed in Table 3 in the Attachment. The table value of χ 2 distribution with 8 degrees of freedom (η = (R -1)*(C -1) = (5 -1)*(3 -1) was 15.5. When the calculated value G exceeded the table value, null hypothesis about independence was rejected.
1(362) 2020 Questions were assessed as follows: 1) Was strategic planning difficult for you during the start-up of a business? Difficulty in strategic planning depended on the size of the holding. Middle-sized holdings answered relatively more often that it was difficult for them to cope with this activity. On the other hand, small and large farms answered "certainly yes" less often than they theoretically should, so it was not that difficult for them. It might be due to the fact, that small farms do not think strategically at all or only on a small scale and large companies have standardised procedures on strategic planning. 2) Was obtaining finance for a business start-up difficult for you? Also, this feature depended on the size of a holding. Small and large farms again answered that is was certainly difficult for them less often than they theoretically could. Small farms can be family farms and the finances can be obtained within family. Large holdings have, in general an easier access to finances in the form of loans and credits. Middle-sized farms answered relatively more often that it was difficult for them to obtain funding for establishing their businesses. 3) Was obtaining finance for business development difficult for you? The answers depended on the size of the holding. Small and large companies answered less frequently that it was certainly difficult for them to obtain the finances. Small farms also declared less frequently that it was rather difficult. On the other hand, medium-sized companies declared more frequently that obtaining finances was certainly and rather difficult for them. Purchase of agricultural land Note: The lower score, the more difficult. Note: The lower score, the more difficult, starting a business is.

Acquiring qualified workers
Acquiring non-qualified workers 4) Was the purchase of an agricultural land difficult for you? Surprisingly, the answers were independent on of the size of the farm, almost all farm managers proclaimed that it was certainly or rather difficult for them to obtain a piece of land. 5) Was the lease of an agricultural land difficult for you? It was found out that lease of agricultural land also depended on the size of the farm and was more difficult for medium-sized and large companies. Small farms did not have to lease the land so often. 6) Was the purchase of buildings difficult for you during the start-up of a business? This activity also depends on whether the farm is small and large (it is less difficult) or medium-sized (more difficult).

7) Was the lease of buildings difficult for you during the start-up of a business?
The purchase of buildings also depends on the size, as it was again more difficult for medium-sized companies than it should be, but less difficult for small and large farms.

8) Was acquiring qualified workers difficult for you during the start-up of a busi-
ness? This activity depended on the size, as medium and larger companies perceived it as a problem. On the other hand, for smaller farms it was not such a significant issue, as many of them did not need qualified workers at all. 9) Was acquiring non-qualified workers difficult for you during the start-up of a business? Similar observations apply to non-qualified workers -the difficulty depended on the size of a farm. 10) Was ensuring sales difficult for you during the start-up of a business? This activity depended also on the size. Medium-sized companies answered more often than they should that it was a problem for them, according to theoretical frequencies. Small farms did not have to solve this problem so often. Large ones answered that it was rather a problem for them and subsequently that rather it was not a problem. 11) Was it difficult for you to overcome administrative burdens? Administrative burden was difficult for all companies and depended on the size. Especially medium and large farms considered it as an issue.

12) Was obtaining knowledge and experience difficult for you? This was an issue
for all types of holdings, regardless of their size.
Comparison of answers for small, middle and large companies is displayed in Figure 2 in the Attachment.
Almost all types of barriers statistically significantly depend on the size of the farm. It seems that for small farms it is more difficult to set up their businesses despite the fact that they do not have to carry out so many activities (such as acquiring qualified and non-qualified workers), because they are too small to need it. Large companies have to do many things including strategic planning and acquiring workers that are not so needed in smaller companies. Hence, their situation also seems difficult, but many activities can be facilitated by their easier access to information ("because size and activity determine a company's capacity to access information" Masson and Shariff (ed.), 2010). Middle-sized companies seem to have the most difficult situation as they need to ensure more activities than small companies, but have lower abilities to secure them than larger ones. Hence, they answered more frequently that certain activity was more difficult for them than they theoretically should or could. The increase in the size of operational holdings helps them utilise the advantages of economies of scale (Kaur and Kataria, 2017).
Only the purchase of a agricultural land and obtaining knowledge and experience did not depend on the size category and was difficult for all size categories in a similar way. However, "large firms may differ from smaller firms in their openness to external knowledge simply because of strategic motivation" (Almeida, Dokko and Rosenkopf, 2003). The challenge for future research is to examine the needs of young farmers in detail using qualitative methods of focus groups or individual interviews in order to be able to better identify the barriers when setting up a business and provide meaningful and effective support for them.

Conclusion
When setting up a new business or taking over a farm from predecessors, young farmers must overcome certain barriers and difficulties. The aim of the paper was to evaluate the main obstacles in setting up a farming business and to assess whether the entry barriers faced by young farmers depend on the size of the farm. We use primary data from electronic survey performed among 510 young farmers in the Czech Republic.
Young farmers assessed the difficulties which they have to overcome when starting up the farm on a scale from 1 (this was certainly a barrier) to 4 (it was not a barrier) and 0 (it is not my case). The assessed barriers were: strategic planning, obtaining finances for a start-up / development of business, purchase / lease of agricultural land, purchase of livestock, purchase / lease of properties, purchase / lease of other fixed assets, acquiring qualified / non-qualified workers, ensuring sales, administrative burden obtaining knowledge and experience. The average size of a farm was 42.4 ha, minimum was 0 (only livestock production) and maximum 1000. The farmers were divided to three categories, according to the size of the holding (from 0 to 5 ha -small, over 5 ha to 50 ha -medium, and over 50 halarge). The average mark for each category and barrier was calculated.
The highest barrier was administrative burden and purchase of an agricultural land. On the other hand, young farmers did not perceive strategic planning and purchase of livestock as a big problem. It was tested in the contingency table whether there are statistically significant differences between the answer in each category. Almost all types of barriers statistically significantly depended on the size of the farm. It seems that for small farms it is difficult to start up their businesses. Nevertheless, there are many activities that are not relevant for them / which they do not have to solve (such as acquiring workers). However, also middle-sized farms faced Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics obstacles, as they are not large enough to overcome the barriers due to their size (and e.g. better access to information). On the other hand, purchase of agricultural land and obtaining knowledge and experience is difficult for all size categories to the same extent.

Acknowledgement
The paper was supported by the Ministry of Agriculture of the Czech Republic, institutional support MZE-RO0918, Internal Research Project no. 1113/2019.

Acquiring
Acquiring non-qualified