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Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine

Klaus Deininger, Denys Nizalov () and Sudhir Singh ()

No 49, Discussion Papers from Kyiv School of Economics

Abstract: With farms cultivating tens or hundreds of thousands of hectares, Ukraine is often used to demonstrate the existence of economies of scale in modern grain production. Panel data analysis for all the country’s farms with more than 200 hectares in 2001-2011 suggests that higher yields and profits are due to unobserved factors at rayon (district) and farm level rather than economies of scale. Productivity growth was driven not by farm expansion but by exit of unproductive and entry of more efficient farms. Higher initial shares of area under farms with more than 3,000 or 5,000 hectares at the rayon level significantly reduce subsequent exit, suggesting that land concentration reduces productivity growth. The paper draws implications for global evolution of farm structures.

Keywords: Land reform; transition; agricultural productivity; Ukraine; market structure (search for similar items in EconPapers)
JEL-codes: O13 Q15 Q18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-eff and nep-tra
Date: 2013-09
Note: Submitted to American Journal of Agricultural Economics and published as World Bank Working Paper
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http://repec.kse.org.ua/pdf/KSE_dp49.pdf September 2013 (application/pdf)

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Persistent link: http://EconPapers.repec.org/RePEc:kse:dpaper:49

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