Are small farms really more productive than large farms?

Fernando Aragon, Diego Restuccia and Juan Rud

Working Papers from University of Toronto, Department of Economics

Abstract: 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.

Keywords: Farm size; productivity; yields; land markets; distortions; agriculture; policy. (search for similar items in EconPapers)
JEL-codes: O12 O13 Q12 Q15 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2021-10-01
New Economics Papers: this item is included in nep-agr and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://www.economics.utoronto.ca/public/workingPapers/tecipa-708.pdf Main Text (application/pdf)

Related works:
Journal Article: Are small farms really more productive than large farms? (2022)
Working Paper: Are small farms really more productive than large farms? (2021)
Working Paper: Are small farms really more productive than large farms? (2021)
Working Paper: Are small farms really more productive than large farms? (2021)
Working Paper: Are small farms really more productive than large farms? (2020)
Working Paper: Are Small Farms Really more Productive than Large Farms? (2019)
Working Paper: Are Small Farms Really more Productive than Large Farms? (2019)
Working Paper: Are small farms really more productive than large farms? (2019)
Working Paper: Are Small Farms Really more Productive than Large Farms? (2019)
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