Assessing the impacts of land fragmentation and plot size on yields and costs: A translog production model and cost function approach

Hua Lu, Hualin Xie, Yafen He, Zhilong Wu and Xinmin Zhang

Agricultural Systems, 2018, vol. 161, issue C, 81-88

Abstract: More attentions should be focused on the changes in plot size of each household rather than the size of farmland in the discussions of economic problem of land fragmentation in China. This study empirically analyzes the impact of land fragmentation and plot size on yields, along with average costs, using household survey data collected from the Jiangsu province in China. A detailed and careful translog production model and cost function are employed to understand and analyze these problems. The empirical results reveal that there are increasing returns to scale in agricultural production. Land fragmentation reduces yields through changes in marginal outputs of agricultural inputs. Especially in areas with high opportunity costs of labor, the negative impact is more obvious. A one-unit increase in the Simpson index leads to a 39% increase in the average cost, whereas a one-unit increase in plot size leads to an 8% decline in the average cost. Thus, moderate expansion of the size of the plot can reduce the average cost, implying that agriculture can achieve economies of scale within each plot. Economies of scale should be developed by keeping farm size constant, reducing the number of plots, and expanding the size of each plot. We suggest that economies of scale can be achieved in each plot by either land consolidation or land transfer as well as by joint farming and joint association.

Keywords: Land fragmentation; Economies of scale; Plot size; Yields; Costs; China (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0308521X17309034
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:agisys:v:161:y:2018:i:c:p:81-88

DOI: 10.1016/j.agsy.2018.01.001

Access Statistics for this article

Agricultural Systems is currently edited by J.W. Hansen, P.K. Thornton and P.B.M. Berentsen

More articles in Agricultural Systems from Elsevier
Bibliographic data for series maintained by Catherine Liu ().