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25

water potential, and the viability of the units to be subdivided. Except for land close to urban areas,
allotments cannot be less than 10 hectares; in outlying areas, subdivisions would not normally be less
than 80 hectares; and under certain circumstances, subdivisions may not be allowed in cases where
the resulting portions are less than 500 hectares.

Subdivision limitations in general are difficult to justify on economic grounds. Farm sizes
aimed at providing a minimum economic return are nearly impossible to set as yields or productivity
change with technological advances, and prices of inputs and outputs fluctuate with supply and
demand. Small farms, through part-time farming, may be quite effective in maintaining income parity
with larger farms and non-farm employment may actually increase the private flow of capital into
agriculture. Furthermore, designing farm size limits that carefully account for changes in incomes
among region (based on differences in soils, climate, and prices) are nearly impossible to make, and
in practice tend to be either badly done, or not done at all, resulting in regional imbalances. Concerns
about uneconomical farm sizes developing from subdivisions are also not justified. In the presence of
an unconstrained land market, profitable farmers should be able to expand their parcel (farm)
holdings, while likewise farming units with underutilized land should have the flexibility to downsize.
Granted, land markets in the past did not permit this flexibility. But, in the future economy where
prices are permitted to adjust in response to market forces, the old system of applying subdivision
policy to a limited number of commercial farm holdings will no longer suffice and runs the risk of
curtailing growth.

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