The relationship between farm size and productivity: empirical evidence from the Nepalese mid-hills
AbstractThis paper examines the farm size and productivity relationship using data from Nepalese mid hills. The household data used has been drawn from a survey conducted by the author and financed by the Norwegian University of Life Science. The analysis uses models both allowing for and not allowing for village dummies(as cluster controls), the ratio of irrigated land (as proxy for land quality), and other socio-economic variables such as households, belonging to caste groups, and family size (as proxy for access to resources). The result supported the almost âstylized factâ of inverse relationship (IR) between farm size and output per hectare. Total cash input use and labour hours per hectare were found to be higher on small farms. The findings of regression equations allowing for village dummies and other socio-economic variables do not support the explanation that the IR between farm size and productivity is due to variation in regions as well as access to resources. Nevertheless, family size and caste dummies show some effects on farm value added. The paper further investigates returns to scale in Nepalese agriculture, applying the Cobb-Douglas (CD) production function. The result shows constant returns to scale. Labour input seems more influential in farm production, followed by manure, in the sample farms. The overall result shows that the IR between farm size and output per hectare is perhaps due to the result more of other inputs used by small farms rather than diseconomies of scale.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 106th Seminar, October 25-27, 2007, Montpellier, France with number 7940.
Date of creation: 2007
Date of revision:
inverse relationship; farm size; productivity; returns to scale; Nepal; Q15; O13; Farm Management;
Other versions of this item:
- Thapa, Sridhar, 2007. "The relationship between farm size and productivity: empirical evidence from the Nepalese mid-hills," MPRA Paper 7638, University Library of Munich, Germany, revised Apr 2007.
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
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