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The inverse relationship between farm size and productivity: Refocusing the debate

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  • Helfand, Steven M.
  • Taylor, Matthew P.H.

Abstract

The relationship between farm size and productivity is a recurrent topic in development economics, almost as old as the discipline itself. This paper emphasizes the importance of choice of productivity measures in the inverse relationship literature. First, we seek to clarify the common measures, their relationships, and advantages and limitations in empirical work. Second, we argue that total factor productivity (TFP), not land productivity, is the appropriate indicator for most policy questions. Lastly, using a pseudo-panel of Brazilian farms that are aggregated at the farm size and municipality levels over the period 1985–2006, we provide new evidence on the inverse relationship between farm size and both land productivity and TFP. The inverse relationship between size and land productivity is alive and well. The relationship between TFP and size, in contrast, has evolved with modernization during this period, becoming increasingly U-shaped or even positive. Policy implications are discussed.

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  • Helfand, Steven M. & Taylor, Matthew P.H., 2021. "The inverse relationship between farm size and productivity: Refocusing the debate," Food Policy, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:jfpoli:v:99:y:2021:i:c:s0306919220301810
    DOI: 10.1016/j.foodpol.2020.101977
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    More about this item

    Keywords

    Inverse relationship; Agriculture; Farm size; Total factor productivity (TFP); Brazil;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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