We See Thee Rise: Quantifying Farm Size Expansion in Canada

Wenbiao Cai

Departmental Working Papers from The University of Winnipeg, Department of Economics

Abstract: Average land size of Canadian farms increased from 500 to 730 acres between 1976 and 2006. Productive resources were also increasingly concentrated in farms from the upper tail of the size distribution. This paper uses a two-sector equilibrium model to quantify the importance of technological change versus farm subsidy in explaining this episode of farm size expansion. Exogenous variations in TFP and factor endowment account for 60 percent of the observed increase in average acreage. When farm subsidy is added, the model replicates the entire trajectory of farm size. The model’s predictions of employment in agriculture, agricultural value added per worker, average farm capital, and land value also accord well with data.

Pages: 21 pages
Date: 2017-08
New Economics Papers: this item is included in nep-agr
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