Moderate-scale operation of family farms in China: underlying logic, practical constraints, and optimization pathways for sustainable food systems

1 Introduction

The global transition toward sustainable food systems persistently faces a dual challenge that requires both continuous improvements in production efficiency to ensure food supply resilience and protection of livelihood security for small-scale agricultural operators to sustain inclusive rural development. For economies with large populations and limited arable land, achieving this balanced goal is particularly challenging. Family farms, as household-centered agricultural organizations, coordinate and allocate production factors such as land, capital, and technology in accordance with household resource endowments, managerial capacity, governance capabilities, and the external agricultural socialized service system. In this sense, they constitute an important operational link through which household-based agricultural production can connect with modern food-system markets and services. Their moderate-scale operation is widely recognized as a critical pathway to optimize factor allocation and improve agricultural total factor productivity, as well as an important lever to advance the transformation of the agricultural supply structure and support the sustainable development of food systems. The international academic community has long debated the definition and realization of moderate scale for family farms, yet no consensus has been reached on core understandings (Kuang and Peng, 2021). A global study of agricultural operation patterns shows that farm scale evolution paths differ markedly across resource endowment contexts, and no uniform scale standard fits all development scenarios (Lowder et al., 2021). These ongoing debates continue to shape the design and practical outcomes of agricultural policies worldwide.

As the world’s largest developing country, China has long faced resource endowment constraints of a large population and limited arable land, as well as a highly fragmented farmland operation pattern. With the deepening of the reform that separates rural land ownership, contracting rights, and management rights, developing moderate-scale operation of family farms has become a core institutional arrangement to promote agricultural modernization and increase household income (Ding and Wang, 2019). The practical experience accumulated from this exploration can also provide important reference for similar transition economies. Against the backdrop of an improving policy support system, the number and operation scale of family farms in China continue to grow, yet there is still no unified theoretical benchmark for defining moderate scale. The actual scale decisions of family farms are constrained by multiple factors such as the development level of factor markets, rural social structure, and family life cycle. There is a clear mismatch between rigid policy supply and differentiated practical demands, and resolving these contradictions requires a more systematic theoretical framework. The role of moderate-scale operation in improving agricultural total factor productivity through optimized factor allocation has been widely verified (Kuang and Peng, 2021) but a systematic theoretical explanation adapted to China’s institutional context remains to be improved.

Existing research on family-farm moderate-scale operation has evolved along an interdisciplinary trajectory, yet core theoretical divides remain unresolved. One strand frames moderate scale as a quantifiable efficiency optimum derived from production or cost functions (Ma et al., 2019), while a second frames it as a context-dependent equilibrium shaped by institutional and social conditions (Lowder et al., 2021). The two perspectives remain largely separate, with no integrated framework bridging efficiency logic and embeddedness conditions.

Regarding the implementation paths of scale operation, the relationship between the land-based approach and the service substitution approach has not yet formed sufficient academic dialogue. Land transfer and concentration have long been regarded as the core prerequisite for scale operation, while recent studies point out that improving the agricultural socialized service system can also allow family farms to obtain external economies of scale while avoiding high land-rent costs and operational risks (Xiao et al., 2026); most studies nonetheless remain confined to the production link rather than the whole chain of the food system. In the temporal dimension, the international literature has examined the dynamic impacts of family life cycle and intergenerational succession on farm-scale adjustment, revealing systematic correlations between farm owners' age, children's willingness to engage in farming, and scale expansion or contraction (Zagata and Sutherland, 2015; Lee and Seshadri, 2019), whereas domestic research still focuses on the current factor constraints faced by operators and rarely treats intergenerational replacement and the family life cycle as endogenous variables of scale decision-making (Luo, 2020). Overall, existing studies either focus on empirical tests within a single discipline or are limited to descriptive induction of specific constraint dimensions.

Based on the above research divergences and practical background, this paper conducts a systematic analysis from the core perspective of sustainable food system development, combined with the institutional and social context of China’s agricultural transformation. This study is conceptual theoretical research. Its objective is explanatory rather than prescriptive: the paper does not seek to calculate a uniform optimal scale applicable to all family farms in China, since such a scale would be neither theoretically defensible nor practically meaningful given the pronounced heterogeneity of regional resource endowments, crop systems, service conditions, and family structures; instead, it seeks to propose a theoretical framework that explains how an appropriate scale is formed and how it adjusts dynamically over time. Based on the interdisciplinary perspective of new institutional economics and economic sociology, it constructs a dynamic equilibrium analytical framework for the moderate scale of family farms by systematically sorting out policy texts, official statistical data, and existing academic literature, focusing on addressing three core issues. The first is the formation logic of moderate-scale operation of family farms under China’s institutional background and its supporting mechanism for sustainable food systems (Coelho et al., 2026). The second is the deep-seated structural dilemmas that currently restrict the realization of moderate-scale operation of family farms, and the pathways through which these dilemmas affect the sustainable transformation of food systems. The third is the optimization direction and supporting institutional arrangements for moderate-scale operation of family farms to meet the development goals of sustainable food systems. The core contribution of this paper lies in integrating the three dimensions of efficiency, embeddedness, and intergenerational sustainability, providing a unified dynamic-equilibrium interpretation framework for the moderate scale of family farms, and enriching theoretical research on household-centered micro-level agricultural organizations in sustainable food systems. The framework is developed for family farms and is not intended to provide an undifferentiated explanation of all agricultural operation entities. The rest of the paper is organized as follows. Section 2 systematically reviews the core academic divergences and research progress in the field of moderate scale. Section 3 constructs a three-constraint dynamic equilibrium analytical framework, sorts out the institutional evolution of family farm development in China, and explains the research methods and data sources. Section 4 analyzes the practical constraint mechanisms of framework implementation from the perspective of three types of failures. Section 5 conducts academic dialogue and clarifies the theoretical application boundaries and international reference value. Section 6 proposes optimization implications at both theoretical and practical levels. The final section summarizes the core research conclusions and prospects future research directions.

2 Literature review

2.1 Conceptual definition of family‑farm moderate‑scale operation

The concept of sustainable food systems has gradually developed from a primarily production-oriented and food-security perspective toward a systems perspective that considers the interactions among production, processing, circulation, consumption, resource use, ecological conditions, and governance. In this broader perspective, sustainability is not limited to increasing agricultural output. It also includes economic viability, social inclusion, environmental protection, resilience to shocks, and the coordination of interests among different participants in the food system. Recent conceptual discussions further emphasize that food-system sustainability depends on the coordination of multiple actors and institutional levels rather than on the performance of individual production links alone (Ewert et al., 2023; Donner et al., 2024; Even et al., 2024). For family farms, this perspective means that operational scale should be evaluated not only by land productivity or farm income, but also by the farm’s ability to maintain livelihood compatibility, participate in organized markets and service networks, protect productive resources, and sustain operation across generations. This conceptual development provides the broader analytical basis for examining the economic-efficiency, social-embeddedness, and intergenerational-sustainability constraints proposed in this paper. Recent studies continue to show that farm performance and scale decisions are shaped by the interaction between production efficiency, institutional arrangements, and social relations. Research on network embeddedness and family-farm sustainability emphasizes the role of relational resources and organizational connections, while recent work on sustainable food systems highlights the need to connect farm-level decisions with broader institutional and governance conditions (Duan et al., 2024). These studies strengthen the argument that moderate scale cannot be reduced to a uniform land-area threshold, but they do not yet provide a sufficiently integrated framework linking the efficiency boundary, the social upper boundary, and the temporal adjustment of family-farm scale.

To clarify the object of analysis, this study distinguishes between land size, operational scale, and moderately scaled operations. Land size, or land area, refers to the actual area of farmland operated by a family farm. It is the most direct indicator of farm size and is often used to discuss issues such as land transfer, land concentration, and farm size distribution (Zheng, 2024). However, land area alone cannot fully reflect the scope or intensity of farm operations; operational scale refers to the broader organizational scope and intensity of agricultural production. It includes not only arable land area but also the family farm's ability to organize labor, capital, machinery, technology, agricultural socialized services, production activities, and market connections (Zhang et al., 2022). Therefore, even family farms with similar arable land areas may have different operating scales if their production intensity, factor availability, service accessibility, or value chain integration levels differ. Conversely, even with fragmented land, farms can achieve economies of scale through specialized services. Appropriate scale operation refers to a range of operating scales within which family farms can organize and manage land and related production activities with appropriate economic efficiency, while also being compatible with institutional arrangements, rural social relations, family governance capabilities, and intergenerational succession (Verger and Le Bars, 2023). Therefore, appropriate scale is not defined as a fixed arable land area threshold or a single equilibrium point. Arable land area is considered an important observable carrier of operating scale, while appropriate scale operation describes the feasibility conditions of a broader range of production organization forms. In the analytical framework constructed below, economic efficiency constraints primarily determine the lower limit of the feasible range, social embeddedness constraints primarily determine the upper limit of the feasible range, and intergenerational sustainability constraints adjust the position and width of the feasible range over time. The appropriate range varies depending on resource endowment, industry characteristics, institutional conditions, service accessibility, and the stage of the family life cycle.

In this paper, moderate-scale operation of a family farm refers to a feasible operational interval in which the farm organizes and manages land, labor, capital, technology, and agricultural services with adequate economic efficiency, while remaining compatible with institutional arrangements, rural social relations, household management capacity, and intergenerational continuity (Verger and Le Bars, 2023). Land management area is the most direct observable carrier of operational scale, but moderate scale is not equivalent to a fixed acreage threshold. Its appropriate range varies with crop characteristics, regional resource endowments, market conditions, institutional arrangements, service availability, and the family life cycle. Conceptually, moderate scale is therefore an operational state and an adjustable interval rather than a single numerical value (Dou et al., 2024). In the analytical framework of this paper, the economic efficiency constraint defines the feasible lower boundary, the social embeddedness constraint defines the feasible upper boundary, and the intergenerational sustainability constraint adjusts the position and width of the interval over time. Ecological sustainability is treated as an important outcome and evaluation criterion of sustainable food-system development, rather than as a separate scale constraint. The literature approaches moderate-scale operation through three related but distinct questions: the scale associated with production efficiency, the institutional and social conditions that make a scale feasible, and the process through which scale adjusts over time. The first perspective tends to represent moderate scale as a land area or factor combination associated with cost minimization or output efficiency. The second emphasizes that the feasible boundary of scale depends on property-rights arrangements, transaction costs, social relations, and organizational capacity. The third treats scale as an adjustable interval linked to the family life cycle and intergenerational succession. These perspectives address different analytical dimensions and together provide the basis for the integrated definition adopted in this paper.

2.2 Theoretical debates on the essential attributes of moderate scale

For a long time, the neoclassical economics tradition has dominated the cognitive paradigm in this field. Its core logic is to achieve a comprehensive balance of cost, revenue and risk through factor recombination within the boundary of technological possibilities, and the derived optimal operation scale usually presents as a quantifiable numerical standard (Nadiri, 1987). A large body of research follows this path by constructing production or cost functions to estimate the optimal scale thresholds for specific crops and regions. These studies argue that economies of scale essentially result from the optimized combination of factor inputs such as land, labor and capital, and farms need to reset factor proportions through scale expansion when marginal factor output declines under fixed land constraints (Ma et al., 2022; Aramburu-Merlos et al., 2024). Institutional economics further expands the connotation of efficiency boundaries. It points out that property rights systems and supervision costs jointly constitute the institutional environment of scale operation. The self-incentive advantage of family operation gradually diminishes with scale expansion, and scale expansion is no longer economically reasonable when supervision costs exceed the efficiency gains brought by self-incentive (Liwa,2011). In response, studies from the economic sociology perspective put forward different judgments. They argue that the economics perspective generally abstracts family farms as homogeneous production units and ignores the rural social networks and institutional contexts in which operators are embedded, so the derived optimal scale often fails to adapt to differentiated rural practice scenarios (Junquera et al., 2022). Such studies emphasize the shaping effect of social embeddedness on scale decisions, and point out that the production and operation of family farms are deeply embedded in kinship, geographical and professional networks. Rural social capital, community norms and grassroots governance models all have significant impacts on the actual scale boundary (Duan et al., 2024). Moderate-scale operation is also a process of rural social structure transformation. It not only promotes the transition from traditional farmers to new professional farmers, but also reshapes the rural class structure and forms a stable rural backbone group (Zhao, 2014). However, the sociological perspective still lacks precise analytical tools for the efficiency boundary of scale, and it is difficult to clarify the threshold effect of social capital on scale expansion. The two research paths have remained relatively independent for a long time, and an integrated analytical framework that takes both efficiency logic and embedded conditions into account has not yet been formed.

2.3 Competing perspectives on implementation pathways for scale operation

Beyond the debate over the nature of moderate scale, the literature also disagrees on how it should be realized. The land-based approach achieves scale effects by consolidating land-management rights, reducing fragmentation, and improving machinery utilization. The service-based approach obtains external economies of scale through specialized services such as machinery operations, plant protection, technical support, drying, processing, logistics, and marketing, without requiring an equivalent expansion of the land base. Recent studies further suggest that agricultural socialized services can influence productivity, collective action, market participation, and the adoption of sustainable production practices (Wang and Huan, 2023; Bai et al., 2025). Nevertheless, the two approaches are still often discussed as separate policy or organizational options. The theoretical gap is that existing research has not sufficiently explained the conditions under which land scale and service scale are substitutive, the conditions under which they are complementary, or how their interaction affects different links of the food system. This paper addresses this gap by treating land-based scaling and service-based scaling as two partially substitutive but generally complementary pathways. Land concentration mainly expands internal economies of scale, whereas service scaling compensates for residual fragmentation and extends scale effects to post-production, logistics, and market coordination.

2.4 Temporal‑dimension research: static factor endowments versus intergenerational adjustment

The first two research directions explored what constitutes an appropriate scale and how to achieve it, while the later research focused on when and within what time span to evaluate scale decisions. Regarding the time dimension of the analysis, existing research also exhibits different perspectives, with the core debate centering on whether the key variable in scale decisions is current factor endowments or long-term intergenerational structure. Early studies mostly explained farm scale decisions from the perspective of static factor endowment, focusing on the restrictive effects of current factors such as land availability, capital constraints and labor quantity on scale expansion, and regarded scale adjustment as a rational response of operators to current factor prices and market conditions (Zagata and Sutherland, 2015). As the issue of intergenerational succession of family farms has gradually become prominent globally, the international academic community has begun to expand the temporal dimension of analysis, regarding family life cycle and intergenerational succession as core endogenous variables affecting the long-term dynamic adjustment of farm scale. Relevant studies reveal that the age structure, health status, children’s willingness to engage in farming and intergenerational succession plans of farm owners systematically drive the expansion, maintenance or contraction of farm scale, and are key variables for understanding the long-term evolution of scale (Lee and Seshadri, 2019). In contrast, domestic relevant studies still focus on the current factor constraints faced by operators, and rarely incorporate intergenerational replacement and family life cycle as endogenous variables into the analytical framework of scale decisions (Kaushik and Kundu, 2024). The interpretation of medium-sized farms lacks depth in the temporal dimension, making it difficult to explain the scale adjustment behavior in the intergenerational transfer of family farms and to respond to the long-term development needs of building sustainable food systems. It should be noted that existing literature does not separately explore the heterogeneity of resource endowments, market maturity, and institutional environment from a spatial perspective.

2.5 Research gaps and rationale for the present study

By integrating the conceptual development of sustainable food systems with the three debates on scale definition, scale realization, and scale adjustment, this paper develops a more explicit research position. Moderate-scale operation is treated as a context-dependent feasible interval rather than a fixed land-area threshold; land scale and service scale are treated as distinct but potentially complementary pathways; and intergenerational sustainability is incorporated as a temporal constraint that adjusts the interval over the family life cycle. The subsequent theoretical framework formalizes these relationships through the interaction of economic-efficiency, social-embeddedness, and intergenerational-sustainability constraints. Overall, existing studies have unresolved academic differences at three core levels: the essential cognition of moderate scale, implementation paths and temporal dimension. Systematic theoretical construction that integrates efficiency logic, social embeddedness and intergenerational sustainability remains weak, and the coordinated promotion framework that organically connects land concentration, subject optimization and mode innovation needs to be further deepened. Against this background, this paper integrates the theoretical perspectives of new institutional economics and economic sociology, incorporates the temporal dimension of intergenerational sustainability, and constructs a dynamic equilibrium analytical framework for moderate-scale operation of family farms, so as to provide a more explanatory theoretical tool for resolving the above academic differences.

3 Theoretical framework and institutional context

3.1 Triple-constraint dynamic equilibrium framework

Existing studies have gradually recognized the limitations of single analytical perspectives and begun to explore integrative approaches combining economic and sociological theories, which lay an important foundation for the multidimensional interpretation of moderate scale. Some studies explicitly distinguish two analytical dimensions of technical efficiency and institutional environment, and propose that moderate scale should be defined from the village context to integrate the technically optimal scale in the economic sense and the feasible scale under institutional environment in the sociological sense. The former provides an objective benchmark for efficiency judgment, while the latter clarifies the practical boundary of scale expansion (Luo, 2020). Other scholars have constructed a multidimensional analytical framework covering community economic wellbeing, social structural relations and rural governance capacity, to systematically compare the differentiated impacts of different scale operation forms on rural community development (Lowder et al., 2021). Empirical studies also confirm that social capital exerts a significant moderating effect on the scale expansion of family farms by reducing transaction costs and promoting resource inflow, which verifies the explanatory power of integrated analysis of economic and social factors. Overall, however, existing integrative frameworks remain at the level of current static analysis. They have not incorporated family life cycle and intergenerational succession into the core constraint system, nor established systematic links with the multidimensional development goals of sustainable food systems. As a result, they can hardly fully explain the long-term dynamic evolution law of family farm scale, nor provide theoretical support at the micro-subject level for food system transformation.

The object constrained by the three dimensions is the operational scale of the family farm, defined as the total land and associated production activities that a household can organize and manage. together with the labor, capital, technology, machinery, services, and organizational arrangements required to operate them. The framework therefore does not equate operational scale with land area alone or assume that a particular acreage is moderate in every region or industry. The analytical framework constructed in this paper is supported by three core constraints that apply to the same analytical object: the scale of family farm operations—the land and related production activities that a family can organize and manage. Specifically, the economic efficiency constraint concerns the minimum operating scale required to achieve sufficiently efficient factor allocation; the social embeddedness constraint concerns the maximum scale compatible with family governance, rural social relations, and organizational coordination; and the intergenerational sustainability constraint concerns the family farm's ability to maintain and adjust its operating scale. This framework does not treat scale as a single area threshold. Instead, it explains why the scope of manageable land and production activities varies depending on institutional, social, and temporal contexts. Specifically, The economic efficiency constraint traces its theoretical origin to neoclassical production theory and transaction cost economics. From the logic of factor combination optimization, neoclassical production theory points out that there exists an optimal scale interval for family farm operation where the marginal output of factors can be balanced. Below this interval, factor allocation efficiency cannot be fully released, and the effect of economies of scale cannot be effectively realized (Nadiri, 1987; Hien, 2025). Transaction cost theory further expands the connotation of efficiency boundary, emphasizing that property rights system, supervision cost and transaction cost together constitute the institutional constraint of scale expansion. The self-incentive advantage of family operation gradually diminishes with scale expansion, and further scale expansion is no longer economically reasonable when supervision and coordination costs exceed the efficiency gains brought by scale expansion (Liwa,2011; Ma et al., 2019). Within the framework proposed in this paper, the economic efficiency constraint defines a feasible lower bound for the appropriate scale of family farms. The assertion regarding this lower bound is conditional, and this condition should explicitly state that, with technology and product structure remaining constant, the achievable factor allocation efficiency within a specific crop system sets a lower limit on the feasible scale. Below this minimum effective scale, the indivisibility of machinery, irrigation, and management capabilities prevents unit costs from falling to a level sufficient to provide adequate returns for household labor and capital (Nadiri, 1987; Aramburu-Merlos et al., 2024; Hien, 2025). This lower bound shifts as technology, crop mix, or product structure changes, thus this boundary is conditional rather than universally applicable. This lower bound is not a universally applicable area threshold; it varies with crop characteristics, regional resource endowments, market conditions, and institutional arrangements.

The social embeddedness constraint is theoretically grounded in the social embeddedness theory proposed by Granovetter and relevant studies on community networks and norms in the field of rural governance. This theoretical perspective emphasizes that economic behaviors do not exist in isolation, but are deeply embedded in specific social relational structures and cultural norms, and the decisions of individuals and organizations are always shaped and constrained by social networks, trust mechanisms and community rules. A large number of studies in agriculture have confirmed that the production and operation of family farms are deeply embedded in rural social networks composed of kinship, geography and professional ties, and social capital, community norms and grassroots governance models all have significant impacts on the actual scale boundary of farms (Junquera et al., 2022; Duan et al., 2024; Vivaldini and Corrêa, 2025). In the framework proposed in this paper, the social embeddedness constraint primarily defines the feasible upper limit for medium-sized operations. This upper limit reflects the maximum compatible scale of operation that can be maintained under constraints such as family governance capacity, rural social relations, community norms, organizational coordination, and the existing service and institutional environment. When the scale exceeds this upper limit, supervisory and management costs, transaction coordination costs, and community frictions may increase at a rate exceeding the benefits of further expansion. The influence of social embeddedness on this upper bound is therefore two-sided rather than monotonic. Up to a certain density of network relations, embeddedness lowers search, negotiation and enforcement costs and thereby raises the upper bound, since operators can draw on kin and community ties for information, labor and contractual assurance. Beyond that point, however, the obligations of reciprocity, the expectation of preferential access to family and community labor, and the claims of community members on farm resources generate interpersonal and coordination costs of their own, so that further expansion becomes more costly and the upper bound is lowered (Junquera et al., 2022). Over-embedding thus compresses the feasible range from above, which is why embeddedness is treated in this framework as capable of both relaxing and tightening the upper boundary rather than as a uniformly enabling condition. Therefore, this upper limit also depends on specific circumstances and may increase with improvements in meso-level organizational structures, agricultural socialized services, infrastructure, and local governance mechanisms.

The third debate concerns current operational constraints versus life-cycle and intergenerational adjustment. Earlier studies mainly explained farm scale through contemporaneous factor endowments, including land availability, capital constraints, labor quantity, and current market conditions. This perspective is useful for explaining short-term scale choices, but it tends to treat the household as a static production unit. More recent research has emphasized that operator age, children’s willingness to engage in farming, succession planning, and the transmission of human capital affect whether a farm expands, maintains its scale, or contracts over time (Zagata and Sutherland, 2015; Lee and Seshadri, 2019; Sheridan et al., 2021; Haws et al., 2025). Recent research on farm-family governance also suggests that succession involves not only the transfer of assets, but also the continuity of managerial knowledge, decision-making authority, and organizational identity. The theoretical gap is that current factor constraints and intergenerational processes have rarely been incorporated into one scale-adjustment framework. This paper addresses this gap by treating intergenerational sustainability as an independent temporal constraint that also regulates the intensity of the economic-efficiency and social-embeddedness constraints. Within the framework, this constraint operates through two observable conditions: the expectation of succession and the capability of the successor. Where succession is anticipated and the successor's managerial and technical capability is adequate, the household can commit to longer-horizon investments, the efficiency floor is lowered and the upper bound raised, and the feasible interval expands. Where succession remains uncertain, the household tends to maintain rather than adjust its scale, so the interval is held broadly stable. Where succession is unlikely, or where the successor lacks the managerial and technical capability required to sustain the operation, both the investment horizon and labor renewal are shortened, the interval contracts, and the farm moves toward partial or complete withdrawal (Zagata and Sutherland, 2015; Lee and Seshadri, 2019; Sheridan et al., 2021; Haws et al., 2025). The temporal constraint accordingly sets no boundary of its own: it shifts the position and width of the interval already defined by the other two constraints, which is what distinguishes it analytically from a third boundary condition.

The three constraints interact dynamically rather than operating independently. The economic efficiency constraint sets a primary lower bound, the social embeddedness constraint sets a primary upper bound, and the intergenerational sustainability constraint shifts the position and width of the feasible interval over time. For example, mature land markets and service provision relax efficiency constraints and raise the embeddedness upper limit, while smooth intergenerational succession amplifies both effects (Ewert et al., 2023). Furthermore, these three constraints correspond to the three core objectives of a sustainable food system: economic efficiency, social inclusion, and long-term resilience. This shifts the perspective of food system development from a background statement to a core evaluation criterion that runs throughout the entire scale analysis process, aligning with the global research consensus on the central role of family farms in food system transformation. This framework provides a unified theoretical analytical tool for systematically explaining the formation logic, practical dilemmas, and optimization paths of small and medium-sized family farm operations, and its mechanisms can be intuitively illustrated through the corresponding theoretical framework diagram (Supplementary Figure 1).

3.2 Institutional evolution of family farm operation in China

The evolution of China’s rural land property rights system is essentially a process of continuous adjustment in the intensity and manifestations of the triple constraints of economic efficiency, social embeddedness and intergenerational sustainability, which provides a realistic contextual foundation for the triple-constraint framework. China’s agricultural operation has long faced the resource endowment constraint of abundant population and scarce land. The tradition of equal land distribution has shaped a highly fragmented farmland pattern, and the indivisibility of factors and rigid allocation have long restricted the release of economies of scale (Demsetz, 1967; Lin, 1990). This pattern is not simply a dissipation result brought by population growth, but a product of the combined effect of factor misallocation and institutional arrangements, which constitutes the historical starting point for subsequent exploration of agricultural scale operation (Tanrvermi et al., 2024).

Agricultural practices during the collective period provide a theoretical counterexample for the irreplaceability of family operation. From the perspective of property rights theory, the property rights structure under collective ownership has systematic defects. The lack of exclusive use rights and free exit rights has compressed farmers’ residual claim space, which not only weakens the incentive level on the production side, but also inhibits the motivation to maintain long-term land fertility (Demsetz, 1967; Lin, 1990; Tanrvermi et al., 2024; Xu and Yang, 2025). The experience of this stage confirms that the endogenous incentive advantage of family operation is an irreplaceable organizational foundation for agricultural production. The endowment characteristics of land fragmentation and the fundamental position of family operation together constitute the initial conditions for the analysis of moderate scale issues. The institutional arrangements during the collective period artificially suppressed the boundary effect of economic efficiency constraints, and at the same time dissolved the natural adjustment functions of social embeddedness and intergenerational constraints, eventually leading to insufficient production incentives and efficiency losses, which inversely confirms the rationality of family operation and the objective existence of the triple constraints.

The implementation of the household contract responsibility system has reconstructed the micro incentive structure of agricultural operation. It has fully released the production vitality of family operation through the separation of land ownership and contracted management rights, while continuing the basic pattern of farmland fragmentation (Li et al., 2026). With the deepening of rural market-oriented reform, the property right attribute of land contracted management rights has been gradually strengthened. The Rural Land Contract Law has consolidated the usufructuary right attribute of land contracted management rights at the legal level, improved land tenure stability and exclusivity, which not only protects farmers’ basic land rights and interests, but also enhances the long-term investment confidence of operators, laying a property rights institutional foundation for the development of land transfer markets and the growth of scale operation entities (Luo, 2020). The continuous expansion of non-agricultural industries has created stable space for agricultural labor transfer, further promoting the optimal allocation of land factors and providing realistic conditions for the gradual rise of family farms.

The implementation of the three-rights separation system is a core breakthrough in China’s rural land system reform. It activates land management rights on the basis of retaining farmers’ contracting rights, removing institutional obstacles to the market-oriented allocation of land factors and the large-scale operation of family farms (Wang and Zhang, 2017). Under this institutional framework, family farms have been established as a core component of new agricultural operation entities. Moderate-scale operation has shifted from spontaneous folk exploration to standardized and institutionalized development, and supporting land transfer service platforms and agricultural socialized service systems have been gradually improved, providing supporting conditions for the expansion of the service scale path (Ma et al., 2025). After entering the new development stage, the policy orientation of scale operation has gradually shifted from operation area expansion to development quality and comprehensive benefit improvement. Multiple goals such as food security guarantee, green production transformation and farmers’ livelihood coordination have been incorporated into the family farm cultivation system, and the connotation of moderate scale has also expanded from single economic efficiency optimization to the collaborative optimization of economic, social and ecological benefits (Nleya et al., 2025). This transformation of institutional orientation is highly consistent with the development goals of sustainable food systems, and also puts forward higher requirements for the dynamic adaptability of family farm scale. The three-rights separation system loosens economic efficiency constraints from the property rights level, the construction of socialized service systems gradually raises the upper bound of social embeddedness constraints, and the intergenerational fault of agricultural labor force makes intergenerational sustainability constraints gradually prominent. The combined effect of the triple constraints constitutes the realistic context of the current moderate scale of family farms.

4 Research methods and data sources

4.1 Research methods

This study is a conceptual theoretical analysis rather than an econometric or survey-based empirical study. Its research objective is therefore to explain the formation conditions and the dynamic adjustment mechanism of an appropriate scale, rather than to measure or prescribe a single optimal operation size; the analytical contribution lies in specifying these conditions and mechanisms, not in estimating a numerical benchmark. Based on the cross-disciplinary perspectives of new institutional economics, economic sociology, family life-cycle theory, and intergenerational transmission theory, it constructs a dynamic-equilibrium analytical framework for the moderate scale of family farms. The analysis integrates three levels: historical institutional interpretation, mechanism decomposition, and theoretical framework construction. The historical level identifies the institutional conditions under which scale constraints have emerged; the mechanism level explains how factor-market, organizational-coordination, and temporal-dimension problems may narrow the feasible range of moderate scale; and the theoretical level integrates these mechanisms into a unified framework. For agricultural operation problems with both institutional embeddedness and social complexity, conceptual theoretical construction can connect historical logic, theoretical logic and practical logic, make up for the limitations of single quantitative methods in contextual explanation, and is more suitable for building a holistic analytical framework.

4.2 Data sources

This study relies on multiple sources of secondary material to support theoretical deduction and institutional interpretation. Policy materials include the Central No. 1 Documents from 2008 to 2025 and official documents issued by agricultural and rural administrative departments. These materials are used to identify changes in policy orientation and institutional arrangements concerning family farms, land transfer, agricultural socialized services, and agricultural modernization. Official statistical materials include publicly available data from the National Bureau of Statistics, the China Rural Operation and Management Statistical Yearbook, and other authoritative statistical sources. These materials are used to describe development trends and contextual conditions rather than to estimate the prevalence of the three failures at the farm level. Academic literature is used to establish theoretical links and to compare findings concerning land fragmentation, rural finance, agricultural services, social embeddedness, family-farm governance, and intergenerational succession. Accordingly, the empirical materials in this paper provide institutional and descriptive grounding for the theoretical framework, but do not substitute for a dedicated micro-level survey or causal identification strategy.

4.3 Empirical grounding and evidentiary boundaries

The three constraints proposed in this paper are theoretical mechanisms rather than directly observed prevalence indicators. Their empirical manifestations can be identified through several types of evidence. Economic-efficiency constraints may be reflected in land fragmentation, insecure land-management rights, limited credit access, labor shortages, and difficulties in obtaining productive services. Social-embeddedness constraints may be reflected in inadequate rural infrastructure, fragmented service provision, weak industrial-chain coordination, and the transaction and coordination costs associated with scale expansion. Intergenerational-sustainability constraints may be reflected in operator aging, the willingness of younger family members to engage in agriculture, family governance arrangements, and the availability of channels for scale expansion or contraction over the family life cycle. The available policy documents, official statistics, and published studies provide evidence that these problems exist and have institutional relevance. They do not, however, establish a nationally representative incidence rate, a precise regional ranking, or a causal effect size for each constraint. Therefore, the propositions developed below should be understood as theoretically grounded explanations of how the three constraints may affect the feasible interval of moderate scale. Their magnitude, distribution, and interaction effects require future validation using farm-level surveys, administrative microdata, or comparative regional datasets.

5 Constraint mechanism analysis

5.1 Factor market failure and economic efficiency constraints

From the perspective of transaction cost economics, frictions in the land, capital, and labor markets constitute important mechanisms through which family farms may fail to approach their efficiency-compatible scale. At the land factor level, the fragmented land endowment created by equal-allocation contracting is the historical root of high transaction costs. China’s cultivated land fragmentation index rose from 0.45 in 2006 to 0.58 in 2020, with over 80% of arable land holding potential for scale-efficiency gains through consolidation (Yang et al., 2025; He and Xiao, 2023). In transferring land into operation, family farms incur multiple transaction costs for information search, negotiation, contracting, and enforcement. Farmers’ demands for land security functions, differentiated income expectations and term preferences further push up transfer costs, eventually forming a general pattern of short contract terms and insufficient stability of management rights, which is essentially a rational choice of farmers under the joint constraints of property rights stability, social security functions and market development degree (Gao et al., 2019). Existing studies and official materials indicate that farmland fragmentation and uncertainty in land-management rights remain important contextual conditions affecting scale expansion in some regions. This operational friction of land factors restricts the sustainability of the food system in two aspects. On the one hand, the difficulty of contiguous land directly hinders standardized production and mechanized operation, reduces production efficiency and risk resistance, and weakens the supply resilience of the food system. On the other hand, the short-term expectation of management rights will inhibit farms’ long-term investment in soil fertility conservation and green production technologies, which is not conducive to cultivated land quality protection and agricultural green transformation.

At the capital factor level, information asymmetry and credit rationing in rural financial markets represent potential mechanisms constraining the scale expansion of some family farms. On the supply side, agricultural-related financial institutions, out of risk prevention and control tendencies, generally set strict mortgage requirements and approval procedures, and exclude some operators from the formal credit market through credit rationing. The diseconomies of scale caused by cultivated land fragmentation will further strengthen this constraint effect (Yi et al., 2024). On the demand side, most family farms adopt a family management mode with non-standard financial accounting and blurred boundaries between production and living costs. They cannot provide standardized financial information, which further aggravates the degree of information asymmetry and weakens their own access to formal finance (Nanéma et al., 2021; Wu et al., 2023). The transmission effect of capital constraints will extend to the whole chain of the food system. Capital shortage not only limits the fixed asset investment of farms in links such as post-production primary processing and storage cold chain, aggravates post-harvest loss of agricultural products, and restricts the realization of loss reduction and efficiency improvement goals, but also hinders the adoption of low-carbon technologies such as green prevention and control and soil testing and formulated fertilization, slowing down the environment-friendly transformation process of agricultural production methods.

At the labor-factor level, selective labor loss under the urban-rural dual structure may generate a reverse accumulation cycle of human capital and constrain the scale expansion and quality upgrading of some family farms. Specifically, as shown in Supplementary Figure 2, the number of rural employees nationwide fell from about 378 million in 2013 to about 270 million in 2023, a decline of approximately 28 per cent. The agricultural labor force shows significant characteristics of aging and low education level. The average age of agricultural workers exceeded 55 in 2020, and the continuous outflow of high-quality labor force and slow improvement of production efficiency form a mutually reinforcing negative cycle.¹ At the micro level, the modern operation ability of family farm operators is generally insufficient, and the mismatch between supply and demand of talents in fields such as digital operation, brand building and supply chain management is widespread in different regions (Lv, 2025). The impact of human capital constraints on the food system is reflected in both current and long-term dimensions. In the short term, the capacity shortage of operators will restrict the promotion of intelligent agriculture, standardized production and quality control modes, reducing the innovation capacity and quality and safety level of the food system. In the long run, the intergenerational fault of agricultural labor force will threaten the stability of labor supply for food production and weaken the talent support for the long-term development of the food system.

5.2 Organizational coordination failure and social embeddedness constraint

Based on the analytical perspective of social embeddedness theory, deficiencies in rural public goods, vertical coordination, and agricultural socialized services may increase the organizational coordination cost of scale expansion. The available evidence suggests that the supply shortage of farmland infrastructure is a typical manifestation of public goods supply failure. Agricultural infrastructures such as irrigation and field roads have the characteristics of non-rivalry and non-excludability, with long investment return cycles and significant spillover effects. They generally have low priority in local fiscal allocation, and at the same time have the governance shortcoming of emphasizing construction over management and maintenance, forming systematic supply defects (Liu and Ji, 2020). Regional differences in fiscal resource allocation further amplify the supply imbalance. The coverage rate of high-standard farmland is relatively higher in eastern plain areas, while hilly and mountainous areas in central and western China generally face problems such as aging facilities and disrepair of irrigation systems (Turup et al., 2025). Since the benefits of farmland transformation are shared by all farmers in the region, while the management and maintenance costs need to be borne by local operators, family farms can hardly afford the maintenance expenses of large-scale water conservancy and road networks independently, which is likely to aggravate the tragedy of the commons of facility degradation (Takayama and Nakatani, 2015). Infrastructure shortcomings will directly weaken the climate disaster resistance capacity of agriculture, reduce the stability of grain output, and damage the supply resilience of the food system. Inter-regional investment differences will also widen the gap in agricultural production efficiency between different regions and hinder the balanced and coordinated development of the food system (Chen et al., 2026).

The supply contradiction between agricultural machinery equipment and cold chain logistics facilities is essentially the failure of vertical coordination of the industrial chain under the constraint of asset specificity. At the agricultural machinery supply level, the long-term subsidy policy biased toward large-scale farming equipment has led to an imbalance in supply structure. The supply of large-scale machinery in plains is relatively surplus, while the supply of light and multi-functional agricultural machinery suitable for small hilly farmland is seriously insufficient (Ge et al., 2022) The high fixed cost of agricultural machinery purchase and low annual operation frequency make it uneconomical for a single farm to purchase by itself. The large operation radius and high unit cost in mountainous and hilly areas lead to weak willingness of socialized service entities to cover, forming dual constraints on both supply and demand sides. Cold chain logistics and post-production processing links are also plagued by asset specificity. Each link of post-harvest treatment of agricultural products requires specific asset investment. A single family farm cannot afford high fixed costs, and specialized third-party service entities face the risk of investment recovery caused by insufficient demand, eventually leading to long-term insufficient investment in post-production links (Zeng et al., 2024). In 2025, the conversion rate of China's major agricultural products reached 75% (Yu, 2026). This gap reflects not only the difference in technical level, but also the gap in industrial chain organization and coordination capacity. This structural contradiction in facility supply directly hinders smallholder entities from integrating into the large-scale production system, limits the improvement of the overall production efficiency of the food system, and is not conducive to building an inclusive and balanced sustainable agricultural development pattern.

The fragmentation of agricultural socialized services may further increase the cost of organizational coordination and restrict the effective release of scale effects. At present, agricultural socialized services show obvious structural imbalance in links. The supply of pre-production services such as soil testing, improved seed breeding and low-carbon agricultural materials is insufficient, mid-production mechanized operation services are relatively saturated, and post-production services such as storage and processing, brand operation and production-marketing docking have obvious gaps (Gao and Yan, 2023). Grassroots agricultural technology promotion resources are still concentrated in traditional pest control and basic operation services, and the supply capacity of new technical services such as digital agriculture and circular planting is weak. Various service entities operate independently and lack vertical coordination. Financial, insurance and production-marketing services are out of touch with the agricultural production cycle, making it impossible to form an integrated service network covering the whole industrial chain. Service fragmentation will continue to hinder the implementation of sustainable food system goals. On the one hand, the supply of supporting services for environmental sustainability such as green prevention and control and cultivated land conservation is insufficient. On the other hand, the decentralized single-link service mode raises the comprehensive operation cost of farms and weakens the market bargaining power of small and medium-sized farms, which is not conducive to building a long-term industrial system that takes into account production loss reduction, ecological protection and farmers’ income increase.

5.3 Temporal dimension failure and intergenerational sustainability constraints

Combined with the analytical perspective of family life-cycle and intergenerational transmission theory, the short-term orientation of some policy incentives, intergenerational tensions in family governance, and the lack of flexible scale-adjustment mechanisms may weaken the long-term adjustment capacity of family farms. The structural distribution deviation of the current agricultural support system is likely to breed short-term behaviors of operators and deviate from the long-term equilibrium direction of moderate scale. Financial support resources are more inclined to large-scale operation entities. The single land area assessment orientation will induce some operators to blindly expand scale through short-term land transfer, and even give rise to opportunistic behaviors aimed at obtaining special subsidies, making policy resources deviate from the core orientation of moderate scale and green operation (Houkai, 2017). Most existing family farm identification rules take land operation area, number of agricultural laborers and proportion of agricultural income as core indicators, lacking regional differentiated settings, and fail to include sustainable evaluation dimensions such as cultivated land conservation, low-carbon production and smallholder interest linkage, which further strengthens the single incentive for scale expansion. From the perspective of the food system, the incentive mechanism with a single scale orientation is likely to induce extensive farming modes, bringing ecological negative externalities such as excessive input of chemical fertilizers and pesticides and overexploitation of cultivated land fertility. The uneven distribution of financial resources will also squeeze the development space of small and medium-sized family farms, which is not conducive to building an inclusive and balanced food production system.

The kinship-based governance mode of family farms forms an inherent tension between traditional operation logic and modern industrial requirements, and also aggravates the scale adjustment friction in the process of intergenerational inheritance. Most family farms have highly overlapping ownership and management rights, and operational decisions rely heavily on the experience of operators. They lack standardized financial accounting, production ledgers and risk early warning mechanisms, with blurred boundaries between household living expenses and agricultural production costs. It is difficult to form standardized operation files, which restricts credit access, project application and long-term operation planning (Yang et al., 2022). Differences in business concepts at the intergenerational level further amplify governance contradictions. The traditional experience-based management mode is difficult to match the requirements of modern supply chains such as digital planting, quality traceability and brand operation, and the modern management demands of the new generation of farming groups are likely to conflict with the traditional operation ideas of the older generation. The shortage of governance capacity will directly hinder family farms from connecting with sustainable consumer markets and standardized food supply chains. Large supermarkets and green agricultural product channels generally require complete production records, compliant financial vouchers and stable supply plans. Farms with non-standard governance can hardly meet the access standards and are excluded from high-value-added sustainable circulation channels for a long time.

Overall, the core of temporal dimension failure is the lack of a flexible scale adjustment mechanism adapted to the family life cycle, which makes the moderate scale interval unable to adjust smoothly with changes in family structure, labor endowment and intergenerational stages. The mechanism analysis in this section should not be interpreted as a causal estimate. It identifies theoretically plausible channels through which institutional, organizational, and temporal conditions may narrow the feasible interval of moderate scale. When a family is in the prime stage with sufficient labor force, the transaction cost of the land transfer market and the instability of management rights will restrict the pace of scale expansion. When a family enters the stage of intergenerational inheritance or labor force decline, there is a lack of smooth channels for land management right exit and scale contraction, leading to continuous mismatch between operation scale and family factor endowment. The lack of such a dynamic adjustment mechanism not only affects the intergenerational sustainability of family farms, but also weakens the stability and resilience of long-term food supply, which deviates from the long-term development goals of sustainable food systems.

6 Discussion

6.1 Core summary of research findings

This study conducts a systematic analysis of the internal logic and practical constraints of moderate-scale operation of family farms based on the institutional context and practical scenarios of agricultural transformation in China. The core findings can be summarized into three interrelated dimensions. The moderate scale of family farms is not a static numerical standard set by external policies, but a dynamic equilibrium interval formed under the combined effects of economic efficiency constraints, social embeddedness constraints and intergenerational sustainability constraints. Its boundaries adjust dynamically with changes in the external institutional environment, market development level and family life cycle stages. The current practical dilemmas faced by moderate-scale operation of family farms do not result from insufficient supply of a single factor. In essence, they are the superimposed manifestation of three structural contradictions: factor market failure, organizational coordination failure and temporal dimension failure, which constitute systematic constraints intertwined by multiple factors including institutional arrangements, market development and social structure. Promoting moderate-scale operation of family farms cannot rely on the single path of land factor concentration. Instead, it requires the coordinated advancement of land property rights system optimization, human capital cultivation and industrial organization system innovation. For transition economies with large populations and limited land resources, supplementing land scale with the scale of agricultural socialized services is a more feasible implementation path that balances production efficiency, farmers' livelihoods and rural social stability.

6.2 Academic dialogue with existing literature

This framework addresses the explanatory limitations of single-perspective research and expands the theoretical scope of moderate-scale operation. The relationship between this framework and the two lines of work above can be stated more precisely. With respect to the efficiency-oriented tradition represented by Ma et al. (2019), the framework accepts the existence of a scale range at which factor allocation becomes economically viable, but reframes that range as the lower boundary of a feasible interval rather than as moderate scale itself; its departure lies not in denying the existence of an efficiency optimum, but in rejecting the inference that this optimum is sufficient to define moderate scale. With respect to the heterogeneity tradition represented by Lowder et al. (2021), the framework does not contest the finding that no universal scale standard exists; it complements that finding by specifying where the heterogeneity originates, locating the lower boundary in factor-market conditions, the upper boundary in rural social organisation and service provision, and the temporal position of the interval in family structure and succession arrangements. The framework thus converts an observed cross-country regularity into a set of theoretically specified boundary conditions that can be examined within a single national setting. In terms of the implementation path of moderate-scale operation, traditional studies mostly regard land factor concentration and fragmentation governance as the core premise for releasing economies of scale (Tanrvermi et al., 2024; He and Xiao, 2023). Recent studies have begun to focus on the leveraging effect of agricultural socialized services enabled by digitalization on external economies of scale (Xiao et al., 2026). This study clarifies the complementary relationship between land scale and service scale, and proposes that service scale is a more socially inclusive implementation path for scale operation under the resource constraint of large population and limited land, which further improves the scale operation path theory of transition economies. In the field of sustainable food system research, existing literature mostly discusses transformation paths from the perspectives of industrial chain coordination or macro policies (Duan et al., 2024; Chen et al., 2026), with insufficient attention to the supporting mechanism of scale adaptability of micro operators. This study reveals the mechanism of dynamic scale adaptation on the economic efficiency, social inclusion and environmental sustainability of food systems from the level of family farms, and supplements the micro-subject foundation research on the transformation of sustainable food systems.

6.3 Practical implications and international reference value

For transition economies with large populations and dominant smallholder farming, China’s experience with family-farm moderate-scale operation offers broadly applicable insights for other transition economies. The realization of agricultural economies of scale does not have to rely entirely on the centralized integration of land factors. Improving the agricultural socialized service system to promote service scale can also release scale effects while taking into account the livelihood security of small-scale farmers. This path fits with the widespread reality of farmland fragmentation worldwide. The service supply mode enabled by digital technology further expands the coverage boundary and operation efficiency of service scale, and provides a more inclusive scale operation option for economies with strong resource endowment constraints (Lowder et al., 2021; Tanrvermi et al., 2024; Xiao et al., 2026). The evaluation standard of moderate scale should not adopt a unified setting framework, but needs dynamic adjustment combined with regional resource endowments, industrial development characteristics and farm family structure. Differentiated policy design can better adapt to diverse scenarios of agricultural development and has more long-term sustainability. Relevant conclusions also mutually confirm the differential characteristics of farmland consolidation and scale operation practices in different countries (Zhao, 2014; Takayama and Nakatani, 2015). Two Asian economies facing constraints comparable to China's illustrate this logic in concrete terms. In Vietnam, where holdings remain highly fragmented and land-use rights are granted for fixed terms, the plot-consolidation programme based on voluntary land exchange has produced only moderate increases in average plot size, whereas the large field model, which links smallholders to enterprises and service providers under a common production plan, has extended mechanization and input standardization without requiring the transfer of land-use rights; this experience corresponds closely to the service-scale pathway identified in the present framework, and indicates that the embeddedness upper bound may be raised through organisational rather than proprietary integration (Hung et al., 2022). In Indonesia, where the overwhelming majority of holdings remain below one hectare and land certification has only recently been extended at scale, farmer groups and village unit cooperatives serve as the principal carriers of input supply, machinery rental and market access, again allowing economies of scale to be obtained through service coordination rather than land concentration (Noer et al., 2019). In both cases the binding constraint shifts from land availability toward the density and quality of rural organisations, which is precisely the shift that the social embeddedness constraint is designed to capture. Furthermore, meso-level entities such as village-level self-governing organizations can play a unique pivotal role in land resource integration, public service provision, and the construction of interest linkage mechanisms. These organizational vehicles connecting the government and farmers can effectively reduce transaction costs in institutional operations and improve the accuracy and adaptability of policy implementation. Their organizational models and operational logic also provide valuable experience for other countries in building agricultural governance systems (Ding and Wang, 2019; He and Xiao, 2023).

6.4 Study limitations and future research agenda

As a conceptual theoretical study, this work has two key limitations. First, without original farm-level microdata, the triple-constraint framework is a theoretically grounded explanatory model rather than a statistically validated measurement tool. Second, available secondary data cannot precisely quantify the magnitude or regional distribution of the three failures. Future research should develop farm-level indicators and test the framework across regions and industries. The diversity study of global agricultural operators by Lowder et al. (2021) also confirms the academic value of classified comparison. Follow-up research can carry out multi-dimensional classified comparison studies to reveal the differential characteristics and evolution laws of moderate-scale operation in different scenarios. In addition, the analysis of the environmental sustainability dimension in this study is dominated by qualitative mechanism explanation, and fails to accurately measure the specific impact effects of different scale levels on ecological indicators such as cultivated land quality, agricultural carbon emissions and farmland biodiversity. The study by Ge et al. (2022) has confirmed a close correlation between land operation scale and ecological effects such as soil conservation. Future research should combine household surveys, administrative records, service-provider data, and regional statistics to test the proposed mechanisms and identify heterogeneous effects. Future empirical research could operationalize the framework through a farm-level survey or linked administrative dataset. Possible indicators include land-transfer duration and contract stability, perceived and monetary transaction costs, formal-credit access and loan rejection, service availability across production stages, infrastructure and market-access conditions, operator age, children’s agricultural participation intentions, succession arrangements, and the observed adjustment of managed land over time. Such research could examine the regional and industrial heterogeneity of the three constraints and test whether they jointly determine the feasible interval of moderate scale. To enable these mechanisms to be empirically falsified, this paper proposes four propositions for subsequent testing. Proposition 1 is the efficiency lower bound test, stating that, all else being equal, for a given crop system and regional factor market conditions, the likelihood of family farms operating below their efficiency lower bound decreases with the maturation of the land transfer market and the widespread availability of formal credit. Proposition 2 is the embeddedness upper bound, meaning that beyond a certain managed area threshold, the marginal coordination and regulatory costs of further expansion grow faster than the marginal efficiency gains; therefore, at smaller scales with weak rural social organization and socialized service provision, the net benefits of expansion become negative. Proposition 3 is intergenerational adjustment, indicating that the location and width of the feasible range systematically change with the stage of the family life cycle, with farms entering the inheritance transition stage having a wider feasible range than those facing inheritance. Proposition 4 is the joint determination of the three propositions, stating that the interaction of the three constraints more fully explains the observed medium-sized range than considering any single constraint alone; this means that policy tools that relax only one constraint have a smaller and less lasting impact than coordinated policy tools. These propositions indicate the specific claims that need to be confirmed or refuted by farm-level survey data, administrative micro-data, or regional comparative datasets.

7 Theoretical and practical implications

7.1 Systematic optimization logic of the three‑constraint framework

Based on the three-constraint dynamic equilibrium analytical framework, promoting the convergence of family farms to the equilibrium state of moderate-scale operation requires coordinated institutional improvement from three dimensions: property rights system, meso-level organization and intergenerational mechanism. These three dimensions correspond to loosening the three constraints of economic efficiency, social embeddedness and intergenerational sustainability respectively, forming a systematic optimization path consistent with theoretical logic. The three dimensions of institutional improvement are not isolated from each other, but mutually supportive and synergistic. The optimization of the property rights system provides an institutional foundation for factor flow, meso-level organizational empowerment reduces the social cost of scale expansion, and the improvement of intergenerational mechanisms ensures long-term dynamic adaptation. The three work together to promote the simultaneous loosening of the three constraints, facilitate the realization of dynamic equilibrium of moderate scale of family farms, and provide micro-level institutional support for the transformation of sustainable food systems. Moving from institutional direction to operational design, Supplementary Table 1 specifies for each of the three dimensions the corresponding policy instruments, the implementing agencies responsible for delivery, and the indicators through which implementation effects can be evaluated.

7.2 Property rights system improvement: loosening economic efficiency constraints

The legal improvement of the property rights system is the core path to loosen economic efficiency constraints. From the logic of transaction cost theory, clarifying the real right attribute of land management rights and standardizing the boundary of rights and functions can reduce information asymmetry and contractual uncertainty in the process of land transfer, lower the transaction cost of factor allocation, and then move down the efficiency lower bound of moderate scale and expand the feasible range of the equilibrium interval. Stable and clear property rights expectations can strengthen the long-term investment incentives of operators, promote the continuous application of soil conservation and green production technologies, and consolidate the micro property rights foundation for environmental sustainability of the food system. Supporting the establishment of a flexible adjustment mechanism for land management rights adapted to the family life cycle can smooth the fluctuation of operation scale caused by changes in family factor endowments, improve the matching degree between scale decisions and family labor structure and management capacity, and enhance the dynamic adaptability of the equilibrium state. Improving the market-oriented transfer service system and promoting the benefit-sharing model can further optimize the allocation efficiency of land factors, while taking into account the rights and interests protection of ordinary farmers and maintaining social inclusiveness in the process of scale adjustment.

7.3 Meso‑level organizational empowerment: loosening social embeddedness constraints

Meso-level organizational empowerment is the key starting point to loosen social embeddedness constraints. Combined with the perspectives of social embeddedness and industrial organization theory, the innovation of the industrial organization system can effectively reduce the coordination cost and social cost of scale expansion, and raise the social upper bound of moderate scale. Family farms realize organizational coordination through diversified joint forms such as cooperatives and industrial alliances, which can break through the scale limitation of single operation, release the synergistic effect of economies of scale and economies of scope, and improve the bargaining power of industrial chain links and the level of access to modern food markets. The expansion of the whole-chain agricultural socialized service system can make up for the capacity shortcomings of family farms in pre-production technical support, post-production processing and circulation, and solve the endowment constraint of land fragmentation through the path of service scale, so as to provide small-scale operators with channels to share economies of scale. The coordinated supply of infrastructure and public services relying on meso-level organizational carriers can also reduce the public cost sharing pressure of individual operations, further expand the feasible boundary of moderate scale, and enhance the inclusiveness of food system development.

7.4 Intergenerational adaptation mechanism: loosening temporal‑dimension constraints

The improvement of intergenerational adaptation mechanisms is an important support to loosen the constraints of the temporal dimension. Based on the theoretical logic of family life cycle and intergenerational transmission, the optimization of the human capital cultivation system and farm governance mode can enhance the flexibility of scale adjustment and alleviate the operational failure in the temporal dimension. The stratified and classified capacity cultivation system can expand the knowledge boundary and modern management capacity of operators, improve the adaptability of farms to the standards of sustainable food supply chains, and provide solid human capital support for dynamic scale adjustment. Improving the qualification certification of professional farmers and the normalized capacity support mechanism can consolidate the foundation of local agricultural talents and alleviate the pressure of intergenerational labor gap caused by structural labor outflow. The standardized upgrading of farm governance mode can weaken the friction of business concepts in the process of intergenerational inheritance, improve the scientificity and continuity of business decisions, enable scale adjustment to advance smoothly with the stages of the family life cycle, and ensure the stability and development resilience of long-term food supply.

8 Conclusion

The moderate scale of family farms is essentially a dynamic equilibrium interval in the operational scale of land and associated production activities managed by the household. It is formed by the combined effects of economic-efficiency, social-embeddedness, and intergenerational-sustainability constraints, rather than by a static numerical standard set by external policies. In line with this understanding, the present study does not aim to derive a uniform optimal size for family farms, but to clarify the conditions under which an appropriate scale emerges and the mechanisms through which it is adjusted as the institutional environment, market conditions and family life cycle change. Land area provides an important observable indicator of this scale, but the feasible interval also depends on factor organization, service access, institutional conditions, and household life-cycle stages. The boundary of the equilibrium interval adjusts continuously with changes in regional resource endowments, market transaction environment, institutional supply level and family life cycle stages. Support policies with a single scale orientation tend to deviate from the actual endowment constraints of operators, and cannot fully match the multiple development goals of sustainable food systems in economic, social and ecological dimensions.

The practical dilemmas of moderate-scale operation of family farms in transition economies have deep structural causes, rather than local problems caused by insufficient supply of a single factor. The institutional legacy of land fragmentation, information asymmetry and credit rationing in rural financial markets, incentive deviations in the supply of agricultural public goods, and insufficient organization of the socialized service system are intertwined to form institutional barriers to factor flow, which restrict the overall operational efficiency and sustainable transformation process of the food system from the micro operation level.

The realization of moderate-scale operation of family farms depends on the coordinated advancement of multi-dimensional institutional arrangements, and single-dimensional policy adjustment cannot support long-term dynamic equilibrium. For transition economies with large populations and limited land resources, supplementing the traditional path of land factor concentration with the scale of agricultural socialized services can release economies of scale while taking into account the livelihood security of small-scale farmers. It combines economic efficiency and social inclusiveness, and also provides referable theoretical logic and practical reference for the agricultural modernization transformation of countries with similar resource endowments worldwide.

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Supplementary material

The Supplementary material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fsufs.2026.1937247/full#supplementary-material

Supplementary material Supplementary material at the source

Footnotes

Edited by: Bingnan Guo, Jiangsu University of Science and Technology, China

Reviewed by: Gao Jiangping, Gansu Academy of Sciences, China

Wang Changsong, Jiangxi Academy of Agricultural Sciences (CAAS), China

Footnotes

The raw data are sourced from China Agricultural and Forestry Economic Management Annual Report (2013–2022) and China Rural Cooperative Economic Statistics Annual Report (2023).