Small Towns and Agriculture: Understanding the Spatial Pattern of Farm Linkages

Agricultural policy and farm lobby groups often stress the role of farm production in sustaining local economies. This paper considers the spatial pattern of upstream and downstream agricultural transactions of farms in North East Scotland and, in particular, the extent to which they take place within the locality of the farm holding. Three alternative definitions of “local” are considered: a distance-based measure; a measure which takes into account the location of the farm in relation to the nearest town; and a measure which takes into account the location of agribusinesses, defining a transaction as local if the farmer buys from (sells to) the nearest available input supplier (output purchaser). The results highlight the importance of allowing for context when explaining farmer purchasing and sales decisions. They also reveal a highly complex pattern of production-related linkages in the region, with many farmers choosing to bypass their most proximate agribusinesses. Certain towns are found to dominate agriculture-related transactions in the region, reflecting the spatial concentration of upstream and downstream agribusinesses. The findings provide new insights into theoretical debates on the role of small towns in the urban system and the changing importance of geographical distance in determining business transactions.