A resilience-based rationale for farm growth: the case of Ukrainian agroholdings

The agricultural sector in transition economies is marked by the prominence of agroholdings, i.e., conglomerates of agricultural enterprises controlling up to hundreds of thousands of hectares of farmland. Drawing on a mix of primary and secondary information from Ukraine, this paper explores the hypothesis that membership in an agroholding presents a strategy for agricultural enterprises to remain resilient in the midst of the severe institutional turbulence characteristic of a transition economy. Institutional shocks and uncertainties disrupt the access of Ukrainian agricultural enterprises to critical finance, land, and labor resources. Enterprises are shown to cope with these disruptions by joining agroholdings, which facilitates access to these resources and creates a kind of protected enclave in which the enterprises can concentrate efforts on the organization of production. Notably, the rationale for agroholding membership is centered on resilience rather than efficiency. The focus on resilience rather than efficiency thus provides a tentative explanation of why the remarkable growth of agroholdings fails to be accompanied by evidence of their superior efficiency. Acknowledgement