| Summary: | The Saskatchewan farm sector is a dynamic system that is faced with the reality of farm consolidation and other structural adjustments. While structural adjustment may result in increased productivity at the farm-level, the declining farm population has a direct impact on rural regions. Given the economic difficulties now inherent in many rural regions, there has never been a more important time to improve our understanding of the structural dynamics of the farm sector. <p> By utilizing agent-based methods, competition that exists between farm households in land markets is modelled in a dynamic framework. By modeling land markets in this manner, structural adjustments that occur due to the re-allocation of land among farm household becomes endogenous to the model. The farming simulation was validated by evaluating its ability to replicate actual structural shifts that occurred during the period of 1960-2000. The results obtained from the simulation were found to mirror historic shifts, which gives the author confidence that the parsimonious assumptions made are robust, yet still characteristic of farm level behaviour in the region. Other scenarios were simulated in order to estimate a counterfactual structural evolution of the modelled region, in the absence of government stabilization and support programs. Significant deviations are observed between the base and zero transfer scenarios with regards to the consolidation of farm assets among a declining number of farm households. Most significantly, the decline in farm numbers accelerated significantly in the late 1980s in the zero transfer scenario compared to the base simulations. <p>The application of an agent-based framework allowed for the study of regional structure with an emphasis on the behaviour and actions of the primary decisions makers within the system. While structural change is driven by a number of factors, the ability of a farm household to fully employ their labour resource was an important factor in the simulations. This contrasts with the finding that productive efficiency, and purchasing and market power at the farm level is not a necessary condition for the observed consolidation of farm assets.
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