Farm Size-productivity Relationship Research Articles

Are small farms really more productive than large farms?

This paper shows that using yields may not be informative of the relationship between farm size and productivity in the context of small-scale farming. This occurs because, in addition to productivity, yields pick up size-dependent market distortions and decreasing returns to scale. As a result, a positive relationship between farm productivity and land size may turn negative when using yields. We illustrate the empirical relevance of this issue with microdata from Uganda and show similar findings for Peru, Tanzania, and Bangladesh. In addition, we show that the dispersion in both measures of productivity across farms of similar size is so large that it renders farm size an ineffective indicator for policy targeting. Our findings stress the need to revisit the empirical evidence on the farm size-productivity relationship and its policy implications.

A revisit of farm size and productivity: Empirical evidence from a wide range of farm sizes in Nigeria.

The relationship between farm size and productivity has been studied extensively in the agricultural and development economics literature. However, most of the documented evidence in sub-Saharan Africa (SSA) is based on samples of small-scale farms operating 5ha or less, with very little evidence assessing this relationship over a wider range of farm sizes. This omission is especially important considering the rapid expansion of medium-scale farms in much of Africa. This study examines the farm size-productivity relationship over a range of farms between zero and 40ha in Nigeria. It also tests whether there is heterogeneity in productivity within medium-scale farms depending on how they came into being. Using four measures of productivity, empirical estimates reveal a U-shaped relationship where the IR holds between zero and about 22ha, turning positive afterwards. Moreover, when medium-scale farms are distinguished between those who were actively engaged as small-scale farmers and stepped up/expanded their scale of operation and those who were primarily in non-farm employment and later stepped into medium-scale farming, the turning point for farmers who stepped up into medium-scale farming is at 11ha, in contrast to 22ha for those who stepped in. Further evidence suggests heterogeneity in productivity within medium-scale farms depending on whether the owner-operators stepped up or stepped into medium-scale farming. These findings imply that policies facilitating smallholders' ability to expand the scale of their activities could contribute substantially to growth in farm productivity, agricultural commercialization and increase in food security in Nigeria, although in most areas only a small proportion of smallholder households are in a position to do this.

Farm Size, Tenancy, and Productivity: An Overview

The present study intends to investigate the relationship between farm size and productivity. The objectives of the study are: to investigate the relationship between farm size and productivity, to suggest some policy implications. The study is based on secondary data. Data were collected from different published and unpublished documents. The main findings of the study are: the small farms have the higher productivity of land than the larger ones, there exists the inverse farm size productivity relationship, few studies showed that although there exists an inverse relationship between these two this inverse relationship got weakened or even disappeared in the regions adopting new technology, some cases there also exists the positive relationship between farm size and productivity, the output level of owner cultivator is likely to be higher than the share-cropper. Few researchers pointed out the higher productivity of sharecroppers than the owner cultivators. In view of the above findings, the following policy measures are suggested: emphasis should be given to farm-related research, the assistance of small farmers in order to form associations for enhancing production, absorbing credit, and adopting farm technologies.

Factor Market Activity and the Inverse Farm Size-Productivity Relationship in Tanzania

Although the inverse farm size-productivity relationship (IR) is sometimes used to motivate arguments in favour of smallholder-led agricultural development, it remains unclear what drives this relationship. It may be attributed to market imperfections that compel small farms to use land more intensively than large farms. Using a three-wave longitudinal household survey from Tanzania, we examine whether the intensity of the IR is related to local factor market activity for land, labour, credit, and animal and machine traction. The IR holds in Tanzania when family labour is either not counted or valued at its shadow cost, though it disappears when family labour is valued at the prevailing local agricultural wage rate. Moreover, the IR is significantly weakened in regions with relatively active agricultural factor markets, such as for land and mechanization services. This suggests that the IR is at least partly driven by imperfections in rural factor markets. As household participation in agricultural factor markets continues to rise, the IR may be expected to weaken or even reverse.

Revisiting farm size-productivity relationship: New empirical evidence from Ethiopia

ABSTRACTAre small farms more productive? With this question in mind, this study revisits the farm size–productivity relationship and explores potential explanations using a unique plot-level data from predominantly wheat producers in Ethiopia. Overall, we find that small plots are more productive than large plots. We next test the conventional explanations hypothesised in the literature – labour market imperfection related to costly monitoring of hired workers and omitted variable bias related to soil quality – and find that neither of them essentially explains the inverse relationship. More importantly, we account for agricultural intensification and found no relationship between plot size and productivity. This suggests that the inverse relationship posited in the literature could simply arise from neglecting the impact of agricultural intensification.

The Relationship between Farm Size and Productivity in Agriculture: Evidence from Maize Production in Northern China

AbstractThe relationship between farm size and productivity has long been a topic of debate in development economics. Using farm‐level panel data from 2003 to 2013, we investigate the relationship between maize yield and farm size in Northern China. After controlling for farm‐specific characteristics, we restore a mild U‐shaped relationship between maize yield and cropping area from the apparent inverse U‐shaped curve. This suggests that an inverse farm size–productivity relationship persists for most small‐sized farms. Further analyses demonstrate that farmer input choice between labor and capital is likely to smooth the non‐linear farm size–productivity relationship, with capital use being more likely to affect the farm size–productivity relationship at a larger scale. The findings imply that subsidizing farmers to rent land without helping them become better‐equipped could result in resource misallocation towards larger farms using less‐efficient labor‐intensive technologies.

Can Labor-Market Imperfections Explain Changes in the Inverse Farm Size–Productivity Relationship? Longitudinal Evidence from Rural India

A large national farm panel from India covering a quarter century (1982, 1999, and 2008) is used to show that the inverse farm size-yield relationship weakened significantly over time, despite an increase in the dispersion of farm sizes. Key reasons are substitution of capital for labor in response to nonagricultural labor demand. Family labor was more efficient than hired labor in 1982-99, but not in 1999–2008. In line with labor market imperfections as a key factor, separability of labor supply and demand decisions cannot be rejected in the second period, except in villages with very low nonagricultural labor demand.

Too small to be beautiful? The farm size and productivity relationship in Bangladesh

This paper examines the agricultural productivity-farm size relationship in the context of Bangladesh. Features of Bangladesh’s agriculture help overcome several limitations in testing the inverse farm-size productivity relationship in other developing country settings. A Stochastic Production Frontier (SPF) model is applied using data from three rounds of a household panel survey to simultaneously estimate the production frontier and the technical inefficiency functions. The ‘correlated random effects’ approach is used to control for unobserved heterogeneous household effects. Methodologically, the results suggest that SPF models that ignore the inefficiency function are likely mis-specified, and may result in misleading conclusions on the farm size-productivity relationship. Empirically, the findings confirm that the farm size and productivity relationship is negative, but with the inverse relationship diminishing over time. Total factor productivity growth, driven by technical change, is found to have been robust across the sample. Across farm size groups, the relatively larger farmers experienced faster technical change, which helped them to catch up and narrow the productivity gap with the smaller farmers.

The Inverse Farm Size Productivity Relationship: Some New Evidence From Sub-Sahara African Countries

The Inverse Farm Size Productivity Relationship: Some New Evidence From Sub-Sahara African Countries

Rising real wages, mechanization and growing advantage of large farms: Evidence from Indonesia

This paper examines dynamic patterns of land use, capital investments and wages in agriculture using farm panel data from Indonesia. The empirical analysis shows that with an increase in real wages that prevailed in both agricultural and non-agricultural sectors in rural areas, relatively larger farmers increased the size of operational farm land by renting in land as well as used more hired-in machines through machine rental and/or service providers, which induces the substitution of labor by machines. Machines and land are complementary and, consistently, the inverse farm size-productivity relationship tends to be reversed among relatively large holders. The results support growing (diminishing) advantage of large (small) farms in the presence of rapidly rising real wages and have food security policy implications to many Asian countries where real wages are rapidly rising and small farms are predominant.

Is small still beautiful? A comparative study of rice farm size and productivity in China and India

Purpose– The farm size-productivity relationship has long been the subject of debate among development economists. Few studies address this issue for China, and those that do only with outdated data sets poorly representing the current situation after the past decade of rapid change, which includes the rapid development of land rental markets, village labor out-migration and use of farm machines. Meanwhile, many studies have researched this relationship for Indian, which is undergoing similar changes except for the development of active land rental markets. The purpose of this paper is to measure the farm size-productivity relationship under the situations of rapid transformation in China and India.Design/methodology/approach– Based on the data of 325 Jiangxi and 400 Allahabad rice farmers in 2011, the survey covered multiple plots of each household in one/multiple growing season(s). The authors use the production function approach and the yield approach, and control for farmland quality, imperfect factor markets, and farm size measurement error, to identify the farm size-productivity relationship.Findings– The regressions show that land yields increase with plot size both by season and over the year in China. This may be one of the reasons that farm sizes are growing in some areas. In India, however, the inverse farm size-productivity relationship is observed by the study, despite recent changes. Moreover, land yields increase with farm machine use in both China and India. This result contributes to the debate over whether mechanization improves yields or just expands the land frontier.Originality/value– The paper empirically estimates the farm size-productivity relationship under rapid agrarian transformation in both China and India based on a unique data set collected by the authors in a detailed primary survey. The paper considers measurement error in the analysis, which adds values to this type of analysis.

Is There a Farm Size–Productivity Relationship in African Agriculture? Evidence from Rwanda

Whether the negative relationship between farm size and crop productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. Plot-level data from Rwanda point toward constant returns to scale and a strong negative relationship between farm size and crop output per hectare that is robust across specifications and emerges also if profits with family labor valued at shadow wages are used but disappears if family labor is valued at market rates. In Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship. <i>(JEL O13, Q15)</i>

Considering Technical and Allocative Efficiency in the Inverse Farm Size–Productivity Relationship

AbstractIn the leading explanations for the oft‐observed inverse relationship (IR) between farm size and productivity in developing country agriculture, labour market imperfections have commonly occupied a central role. However, an emerging literature suggests that disparities in technical or allocative efficiency may be driving productivity differentials. Using nationally‐representative panel data from Nicaragua, we develop and employ a four‐stage empirical framework to simultaneously test the competing explanations for the IR. While efficiency differences exert a significant impact on all productivity indicators, their explanatory power is insufficient to rule out labour market imperfections as the driving force behind the relationship.

Fact or artifact: The impact of measurement errors on the farm size–productivity relationship

This paper revisits the role of land measurement error in the inverse farm size and productivity relationship (IR). By making use of data from a nationally representative household survey from Uganda, in which self-reported land size information is complemented by plot measurements collected using Global Position System (GPS) devices we reject the hypothesis that IR may just be a statistical artifact linked to problems with land measurement error. In particular, we explore: (i) what are the determinants of the bias in land measurement, (ii) how this bias varies systematically with plot size and landholding, and (iii) the extent to which land measurement error affects the relative advantage of smallholders implied by the IR. Our findings indicate that using an improved measure of land size strengthens the evidence in support of the existence of the IR.

Farm Size and Aquaculture Productivity Relationship

Farm Size and Aquaculture Productivity Relationship

Land Tenure, Farm Size, and Rural Market Participation in Developing Countries: The Case of the Tunisian Olive Sector

Previous articleNext article No AccessLand Tenure, Farm Size, and Rural Market Participation in Developing Countries: The Case of the Tunisian Olive SectorLokman T. Zaibet Elizabeth G. Dunn Lokman T. ZaibetSultan Qaboos University Search for more articles by this author Elizabeth G. DunnUniversity of Missouri—Columbia Search for more articles by this author Sultan Qaboos UniversityUniversity of Missouri—ColumbiaPDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 46, Number 4July 1998 Article DOIhttps://doi.org/10.1086/452376 Views: 62Total views on this site Citations: 15Citations are reported from Crossref © 1998 by The University of Chicago. All rights reserved.PDF download Crossref reports the following articles citing this article:Yves Gérard Bazie, Tristan Le Cotty, Élodie Maitre D’hôtel, Damien Oula Ouattara, Audrier Sanou Pourquoi une relation positive entre taille des exploitations et productivité au Burkina Faso ?, Économie rurale , no.371371 (Mar 2020): 37–58.https://doi.org/10.4000/economierurale.7592Milu Muyanga, T S Jayne Revisiting the Farm Size‐Productivity Relationship Based on a Relatively Wide Range of Farm Sizes: Evidence from Kenya, American Journal of Agricultural Economics 101, no.44 (Mar 2019): 1140–1163.https://doi.org/10.1093/ajae/aaz003Yali Zhang, Yihan Wang, Yunli Bai Knowing and Doing: The Perception of Subsidy Policy and Farmland Transfer, Sustainability 11, no.88 (Apr 2019): 2393.https://doi.org/10.3390/su11082393Jiao Yan, Chunlai Chen, Biliang Hu Farm size and production efficiency in Chinese agriculture: output and profit, China Agricultural Economic Review 11, no.11 (Sep 2018): 20–38.https://doi.org/10.1108/CAER-05-2018-0082Talip Kilic, Alberto Zezza, Calogero Carletto, Sara Savastano Missing(ness) in Action: Selectivity Bias in GPS-Based Land Area Measurements, World Development 92 (Apr 2017): 143–157.https://doi.org/10.1016/j.worlddev.2016.11.018Mamudu Abunga Akudugu Agricultural productivity, credit and farm size nexus in Africa: a case study of Ghana, Agricultural Finance Review 76, no.22 (Jul 2016): 288–308.https://doi.org/10.1108/AFR-12-2015-0058Paul Collier, Stefan Dercon African Agriculture in 50Years: Smallholders in a Rapidly Changing World?, World Development 63 (Nov 2014): 92–101.https://doi.org/10.1016/j.worlddev.2013.10.001Laure Latruffe, Yann Desjeux Perpetuation of subsistence farming in Kosovo: the role of farm integration in input markets, Post-Communist Economies 26, no.11 (Feb 2014): 137–148.https://doi.org/10.1080/14631377.2014.874671Matthew J. M. Coomber Debt as weapon: Manufacturing poverty from Judah to today, Diaconia 4, no.22 (Dec 2013): 143–158.https://doi.org/10.13109/diac.2013.4.2.143Calogero Carletto, Sara Savastano, Alberto Zezza Fact or artifact: The impact of measurement errors on the farm size–productivity relationship, Journal of Development Economics 103 (Jul 2013): 254–261.https://doi.org/10.1016/j.jdeveco.2013.03.004Awudu Abdulai, Eliud A. Birachi Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain, Review of Agricultural Economics 31, no.11 (Mar 2009): 103–121.https://doi.org/10.1111/j.1467-9353.2008.01428.xAyal Kimhi Plot size and maize productivity in Zambia: is there an inverse relationship?, Agricultural Economics 35, no.11 (Jul 2006): 1–9.https://doi.org/10.1111/j.1574-0862.2006.00133.xJacques Somda, Eric Tollens, Mulumba Kamuanga Transaction Costs and the Marketable Surplus of Milk in Smallholder Farming Systems of the Gambia, Outlook on Agriculture 34, no.33 (Aug 2016): 189–195.https://doi.org/10.5367/000000005774378784Jennifer Hill, Wendy Woodland Contrasting water management techniques in Tunisia: towards sustainable agricultural use, The Geographical Journal 169, no.44 (Dec 2003): 342–357.https://doi.org/10.1111/j.0016-7398.2003.00098.xJeremy D Foltz Micro-economic perspectives on Tunisia's agro-export strategy, (): 209–230.https://doi.org/10.1016/S1094-5334(03)05013-1

On price risk and the inverse farm size-productivity relationship

The oft-observed inverse relationship between farm size and productivity has elicited several explanations having important policy and theoretical implications. Using advances in the analysis of price risk effects on producer behavior, and a simple two-period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made, this paper demonstrates analytically that a non-degenerate land distribution and price risk can together produce an inverse relationship, even absent any of the more common explanations. Empirical evidence from Madagascar confirms the plausibility of this intuitive explanation for the phenomenon.

Impacts on rural poverty of land-based targeting: Further results for Bangladesh

Landholding class has been widely advocated as a targeting indicator for fighting rural poverty in South Asia and elsewhere. Supporters have pointed to the correlation between poverty and lack of land, and have also claimed that land-based targeting raises output. The paper tries to assess the impact on rural poverty in Bangladesh of a benchmark policy under seemingly ideal conditions, generalizing earlier results of Ravallion (1989) on improved data. Poverty is reduced, though the maximum gains turn out to be small, even allowing for pro-poor productivity effects consistent with the farm size-productivity relationship in Bangladesh. The gains are likely to be even smaller under real-world incentive and political economy constraints.

Farm Size and Land Productivity Relationship in Nepal: A Case Study of Nawal Parasi District

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