The Importance of Local Networks for Solving Land Fragmentation Problems in Bulgaria

Abstract

"Bulgaria as one of the transition countries in the Central and Eastern Europe has been conducted a land policy which aimed to give back user rights to individual owners and to privatize the physical assets from collective farms. The restitution of ownership rights has led to land fragmentation in ownership and use. The aim of this paper, in one side, is to investigate how land fragmentation in term affects contract arrangements between landowners and land users, and, on the other side, to demonstrate how local networks, informal and formal, solves land fragmentation problem. In order to explain the processes affected by land fragmentation it will be employed agricultural contract theory and social capital. First, the article reviews the appropriateness of each theory. Second, analyzes different informal and formal contract arrangements among landowners and land users by employed case study approach, and third, evaluates the role of local networks for solving land fragmentation.

"The main argument in the article is that fragmented ownership generates high costs of searching for owners as well as high costs of contracting. Therefore, the informal contracts dominate among landowners and land users. The level of social capital is different between different actor groups: landowners, land users and local authority. Therefore, networks among three contractual groups were defined: first, among local/ absentee landowners and local farmers, second, among local landowners and outside framers through using local authority in the villages and third, among all land users. The findings lead to conclusion that local networks reduce costs of contracting even in a low trust/commutation environment among some of different groups of actors occurs. Also, local networks among different groups of actors are importance for solving land fragmentation."