1.1.2. Factors Affecting the Efficiency of Family Farms

Regarding the factors that affect the efficiency of family farms, various scholars have asserted that agricultural factor inputs, farmers' characteristics, family farm operation characteristics and external factors may all affect the efficiency of family farms. Agricultural factor inputs refer to those basic elements that must be put into agriculture production to produce agricultural products, such as land, labor and capital. Farmers' characteristics are the farmers' personal characteristics, for example, the farmer's age, education level, training skills and farming experience. Family farm operation characteristics include family farm internal operating situations, for example, the regulations, market channels, technology adoption and brand registration. External factors refer to those environmental factors, such as the policy, credit support and disasters.

Zhang and Liu [9] believed that problems, such as over-scale, lack of labor, high production costs and single operating structure, lead to the lack of family farm efficiency. In Bangladesh, Peru and Thailand, farm scale and agricultural productivity are positively correlated [10]. However, some scholars concluded that the land operation area of family farms being overlarge can reduce their efficiencies [11,12], while others found that there seems to be an inverted U-shaped relationship between family farm efficiency and its land scale [4,13]. The inverted U-shaped relationship implies that the relationship between the land scale and the efficiency of family farms is not linearly correlated, either positively or negatively. With the expansion of land scale, the efficiency of family farms first increased because the full utilization of machines could create economics of scale, and then decreased after an optimal scale, forming an inverted U-shape. The education and skill level of the farmers [14–16], investment scale, agricultural machinery subsidies and agricultural insurance positively affect the operating efficiency of family farms, while the number of laborers, the cost of land transfer, agricultural machinery and credit funds show a negative correlation with it [8]. Kong and Zheng [17] asserted that agricultural subsidies can bring stable income expectations to farmers, thus positively affecting the efficiency of family farms, in contrast to researches by Zhu and Lansink [18] and Chen [19], which pointed out that agricultural subsidies would cause efficiency lost. It is also concluded that a fair external information environment and a perfect credit system [20] can promote the development of family farms, and the improvement of family farm efficiency requires external support from credit funds [21].
