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Farm size, productivity and returns to scale in agriculture revisited: a case study of wine producers in South Africa

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  • Townsend, R. F.
  • Kirsten, J.
  • Vink, N.

Abstract

The inverse relationship between farm size and productivity has almost become a 'stylised fact' in the economic development literature. Most of the studies contributing to this preception have been flawed by methodological shortcomings and the request is that these studies be treated with caution. Using recent farm survey data from the wine producing areas of the Western Cape of South Africa, this study attempts to overcome some of the methodological problems, distinguishing between partial and total productivity measures. Using data envelopment analysis, most of the wine grape producers were found to operate under constant returns to scale. Co-operative membership seemed to overcome the economies of scale associated with processing and marketing. The inverse relationship between farm size and both land productivity and total factor productivity is weak, not consistently negative and differs between regions. Thus, caution must be used when advocating rural development policies based on the inevitability of an inverse relationship existing in all sectors and production regions of agriculture. © 1998 Elsevier Science B.V. All rights reserved.

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Bibliographic Info

Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 19 (1998)
Issue (Month): 1-2 (September)
Pages: 175-180

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Handle: RePEc:eee:agecon:v:19:y:1998:i:1-2:p:175-180

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  1. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1993. "Power, distortions, revolt, and reform in agricultural land relations," Policy Research Working Paper Series 1164, The World Bank.
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Cited by:
  1. Aparicio, Juan & Borras, Fernando & Pastor, Jesus T. & Vidal, Fernando, 2013. "Accounting for slacks to measure and decompose revenue efficiency in the Spanish Designation of Origin wines with DEA," European Journal of Operational Research, Elsevier, vol. 231(2), pages 443-451.
  2. Manevska-Tasevska, Gordana & Hansson, Helena, 2010. "Influence of rural development policy targets on farm efficiency: An efficiency study of labour intensive grape growing family farms," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52696, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  3. Frantisek Brazdik, 2006. "Non-Parametric Analysis of Technical Efficiency: Factors Affecting Efficiency of West Java Rice Farms," CERGE-EI Working Papers wp286, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Hardwick Tchale & Johannes Sauer, 2007. "The efficiency of maize farming in Malawi. A bootstrapped translog frontier," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 82, pages 33-56.
  5. García-Díaz, César & Moreno-Monroy, Ana I., 2012. "Social influence, agent heterogeneity and the emergence of the urban informal sector," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(4), pages 1563-1574.
  6. Matchaya, Greenwell C., 2007. "Does size of operated area matter? Evidence from Malawi's agricultural production," MPRA Paper 11948, University Library of Munich, Germany.
  7. Gustavo Anríquez & Genny Bonomi, 2007. "Long-Term Farming Trends. An Inquiry Using Agricultural Censuses," Working Papers 07-20, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  8. Alvarez, Antonio & Arias, Carlos, 2004. "Technical efficiency and farm size: a conditional analysis," Agricultural Economics, Blackwell, vol. 30(3), pages 241-250, May.
  9. Lucie Ménager & Christine Valente, 2011. "Market power and voluntary land redistribution," Working Papers hal-00867615, HAL.
  10. Tao Zhang, 2007. "Part-time farming: off-farm and on-farm household efficiency measurement of Ireland farm households," Working Papers 0705, Rural Economy and Development Programme,Teagasc.
  11. Tchale, Hardwick & Sauer, Johannes, 2008. "Soil Fertility Management And Maize Productivity In Malawi: Curvature Correct Efficiency Modeling And Simulation," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52077, African Association of Agricultural Economists (AAAE).
  12. Igbekele Ajibefun & Adebiyi Daramola & Abiodun Falusi, 2006. "Technical efficiency of small scale farmers: An application of the stochastic frontier production function to rural and urban farmers in Ondo State, Nigeria," International Economic Journal, Taylor & Francis Journals, vol. 20(1), pages 87-107.

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