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Productivity and Efficiency of Corporate and Individual Farms in Ukraine

Author

Listed:
  • Lerman, Zvi
  • Sedik, David J.

Abstract

The paper presents a comparative analysis of the productivity of corporate and individual farms in Ukraine based primarily on cross-section data from a farm survey conducted by FAO in 2005. We calculate partial land and labor productivity, total factor productivity, and technical efficiency scores (using Stochastic Frontier Analysis) for farms of different organizational forms. Our results demonstrate with considerable confidence that, contrary to established convictions among the Ukrainian decision makers, the large corporate farms are not more productive than the smaller family farms. This finding is not restricted to Ukraine, as a similar result has been obtained by in Moldova, Russia, and the U.S. Policies encouraging a shift from large corporate farms to smaller individual farms, rather than the reverse, can be expected to produce beneficial results for Ukrainian agriculture and the economy in general. The government of Ukraine should abandon its inherited preference for large-scale corporate farms and concentrate on policies to improve the operating conditions for small individual farms. At the very least, the government should ensure a level playing field for farms of all sizes and organizational forms, and desist from biasing its policies in favor of large farms.

Suggested Citation

  • Lerman, Zvi & Sedik, David J., 2007. "Productivity and Efficiency of Corporate and Individual Farms in Ukraine," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9985, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea07:9985
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    File URL: http://purl.umn.edu/9985
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    Cited by:

    1. Pavel Ciaian, 2007. "Land Reform and Productivity Gains with Multiple Market Imperfections," EERI Research Paper Series EERI_RP_2007_01, Economics and Econometrics Research Institute (EERI), Brussels.

    More about this item

    Keywords

    family farms; corporate farms; comparative performance; technical efficiency; total factor productivity; agrarian reforms; transition countries; Farm Management; Productivity Analysis; D24; J24; P27; P31; P32; Q12; Q15; R14;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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