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The costs and benefits of land fragmentation of rice farms in Japan

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  • Kawasaki, Kentaro
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    Abstract

    Land fragmentation, in which a farm operates multiple, separate plots of land, is a common phenomenon in Japan and many other countries. Usually, land fragmentation is regarded as a harmful phenomenon as it increases production costs and reduces the advantages of scale economies. However, it is also known that fragmentation may have beneficial effects in reducing risk through spatial dispersion of plots. Thus, land fragmentation has both costs and benefits, and whether it is beneficial or harmful is determined by the magnitude of these costs and benefits. This article investigates the costs and benefits of land fragmentation empirically using panel data from Japanese rice farms. The empirical results reveal that fragmentation increases production costs and offsets economies of size, and these impacts strengthen as farm size increases. Moreover, although fragmentation does reduce production risk, its monetary value is far below the cost of land fragmentation. From these findings, we conclude that land fragmentation is an impediment to efficient rice production in Japan.

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    Bibliographic Info

    Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

    Volume (Year): 54 (2010)
    Issue (Month): 4 (December)
    Pages:

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    Handle: RePEc:ags:aareaj:162026

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    Related research

    Keywords: economies of size; farmland fragmentation; Just–Pope production function; panel data; stochastic frontier cost function; Crop Production/Industries; Land Economics/Use;

    References

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    1. Antonio Alvarez & Carlos Arias, 2003. "Diseconomies of Size with Fixed Managerial Ability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 134-142.
    2. Nguyen, Tin & Cheng, Enjiang & Findlay, Christopher, 1996. "Land fragmentation and farm productivity in China in the 1990s," China Economic Review, Elsevier, vol. 7(2), pages 169-180.
    3. Tan, Shuhao & Heerink, Nico & Kruseman, Gideon & Qu, Futian, 2008. "Do fragmented landholdings have higher production costs? Evidence from rice farmers in Northeastern Jiangxi province, P.R. China," China Economic Review, Elsevier, vol. 19(3), pages 347-358, September.
    4. Van Hung, Pham & MacAulay, T. Gordon & Marsh, Sally P., 2007. "The economics of land fragmentation in the north of Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), June.
    5. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September.
    6. Martin, William J., 1983. "A Note on Cost Functions and the Regression Fallacy," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 51(03), December.
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    Cited by:
    1. Yagi, Hironori, 2012. "Farm size and Distance-to-Field in Scattered Rice Field Areas:with Integration of Plot and Farm Data," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125390, International Association of Agricultural Economists.
    2. Jia, Lili, 2012. "Land fragmentation and off-farm labor supply in China," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 66, number 66.
    3. Latruffe, Laure & Piet, Laurent, 2013. "Does land fragmentation affect farm performance? A case study from Brittany," Factor Markets Working Papers 151, Centre for European Policy Studies.
    4. Arimoto, Yutaka, 2011. "The impact of farmland readjustment and consolidation on structural adjustment: The case of Niigata, Japan," CEI Working Paper Series 2011-3, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    5. Laure Latruffe & Laurent Piet, 2013. "Does land fragmentation affect farm performance?," Working Papers 188888, Institut National de la Recherche Agronomique, France.
    6. Laure Latruffe & Laurent Piet, 2012. "Does land fragmentation affect farm performance?A french Breton case study," Working Papers 205547, Institut National de la Recherche Agronomique, France.

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