Valuation Methods for the Business Unit of Diversification Strategy of Urban Farm Management

From the Perspective of Management-Resource Sharing and Functional Complementarity between Enterprises

Abstract

Generally, it is recognized that farm diversification contributes to urban and rural development, and promotes farmers' sustainability. However, it is unclear how the farm diversification accomplishes economic advantages such as economies of scope and risk reduction by the combination of several enterprises. This study suggests the measurement of business units, and investigates management-resource sharing and functional complementarity among enterprises of farmers in Tokyo. As a result, several enterprises can be considered as the same business unit. And the farmers' production, facilities and skills are shared to manage several enterprises. In addition, farmers acknowledge the complemental role of each enterprise in terms of seasons, price and production standards.