Beyond the Black Box: Towards a Systems Theory of Farming Family and Family Farm

Abstract The aim of this article is to present the need for a view of a family farm that is complementary to neoclassical economics and outline the framework concepts on which the future systems theory of family farms could be based. The article is a conceptual overview. The paper presents the development of economics and organization of farms. It was emphasized that in addition to the analytical approach, which today fits into the neoclassical mainstream of economic thought, the organic approach, which is related to the contemporary systems approach, was also important in the discipline. The authors presented two trends considered to be the foundation of the target theory of family farms: systems thinking and new institutional economics. An outline of the concept of a new approach to family farms is presented as a systemic whole connecting the family and its household involved in agricultural production, with the possibility of reducing internal transaction costs (agency costs) being an important attribute of this whole. Family farms still remain the predominant form of agricultural activity in Poland, Europe, and other continents. The family nature of the entities creates their specificity both in terms of goals and behaviors, which is difficult to reduce to the neoclassical model of firm, which seeks to maximize profits. What is needed is a holistic, systems approach complementary to the predominant neoclassical approach, considering close relations between the family and the agricultural production unit.