DIVESTMENTS IN THE PROCESS OF DEVELOPING OFF-FARM ECONOMIC ACTIVITY BY FARMERS

Abstract

The purpose of this paper was to initiate discussion of the role of divestments in transformation of farms which diversify their activities towards off-farm economic activities. This paper is theoretical, supplemented with results of surveys conducted among farmers-entrepreneurs. Observations and studies of literature references indicate that in course of development by a farmer of off-farm economic activities, available farm resources are involved first. After a certain time, considering significant disproportionality in economic efficiency of resources involved in competing activities, and in view of difficulties in obtaining new resources from outside, a need arises for divestment within the farm. Typically, this leads to decreased significance or even marginalization or abandonment of the less profitable activity, which is typically the farming activity.