Trusted brokers in farmland markets: A case study in rural Scotland

This paper explores how social networks and government institutions work in farmland markets, with a special focus on the role of brokers. For this purpose, New Economic Sociology (NES) is applied and compared to New Institutional Economics (NIE) to build a theoretical framework, and a Social Network Analysis is adopted to case studies. Two Parish case studies were conducted in Scotland, where dynamic land pattern changes can be observed. It allowed for the comparison of one parish dominated by tenancies in the land market with private agents involved, with another parish where a joint venture unfolds. After the entire land market network for each parish was identified, the connections between actors were traced through in-depth interviews. The paper examines the role of trust in farmland markets embedded in informal social networks which consist of varieties of actors (e.g., tenant, private agents, landowner and business partner). Results highlight how trust as social capital works in land transactions, in addition to the economic impacts (e.g., price, rent and transaction costs). The findings support the NES theory and suggests the importance of trust in designing governmental schemes that could support and encourage the development of farmland markets in the future.