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Productivity and farm size in Australian agriculture: reinvestigating the returns to scale

Yu Sheng (), Shiji Zhao and Katarina Nossal

No 100711, 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society

Abstract: Higher productivity among large farms is often assumed to be a result of increasing returns to scale. However, using farm-level data for the Australian broadacre industry, it was found that constant or mildly decreasing returns to scale is more typical. On examining the monotonic change in marginal input returns as farm operating size increases, it was found that large farms achieve higher productivity through changes in production technology rather than through changes in scale. The results highlight the disparity between ‘returns to scale’ and ‘returns to size’ in Australian agriculture. They also suggest that improving productivity in smaller farms would depend more on their ability to access advanced technologies than their ability to simply expand. The implications for ongoing structural adjustment in Australian agriculture are discussed.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 22
Date: 2011
New Economics Papers: this item is included in nep-agr and nep-eff
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Journal Article: Productivity and farm size in Australian agriculture: reinvestigating the returns to scale (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare11:100711

DOI: 10.22004/ag.econ.100711

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