Are Small Farms Really more Productive than Large Farms? / Fernando M. Aragon Sanchez, Diego Restuccia, Juan Pablo Rud.

Format:

Book

Author/Creator:

Aragon Sanchez, Fernando M.

Contributor:

National Bureau of Economic Research.

Restuccia, Diego.

Rud, Juan Pablo.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26331.

NBER working paper series no. w26331

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

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.

Notes:

Print version record

September 2019.