Exploring the relationship between farm size and productivity: Evidence from the Australian grains industry

Yu Sheng and Will Chancellor

Food Policy, 2019, vol. 84, issue C, 196-204

Abstract: The effect of farm size on productivity remains to be one of the longest standing debates in the agricultural development literature. In this paper, we use farm level data for the Australian grains industry from 1989 to 2004 to investigate the relationship between farm size and total factor productivity and its potential determinants. We show that a positive farm-size productivity relationship could be linked to farmer capital choice. In particular, the productivity advantage of larger farms is likely to diminish as farms use contract services to replace self–owned capital, suggesting that the hire of capital services (hereafter ‘capital outsourcing’) may lift the productivity level of small farms compared to their larger counterparts.

Keywords: Agricultural productivity; Farm size; Contract service; Capital outsourcing (search for similar items in EconPapers)
JEL-codes: D24 Q1 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:84:y:2019:i:c:p:196-204

DOI: 10.1016/j.foodpol.2018.03.012

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