IDEAS home Printed from https://ideas.repec.org/p/ags/umaesp/13411.html
   My bibliography  Save this paper

Are Large Farms More Efficient?

Author

Listed:
  • Peterson, Willis L.

Abstract

Accurate estimates of returns to scale require that inputs and output are measured without error and that environmental and managerial differences among firms of varying sizes are taken into account. Measurement problems affecting estimates of returns to scale in agriculture include: (1) combining the farm dwelling with capital inputs, (2) correlation of environmental and management characteristics with size and (3) the effect of off-farm employment on small farm output and production costs. Estimates of long run average total cost curves for farms in the corn belt reveal that after the above factors are taken into account, estimated scale economies in agriculture disappear, while there is evidence of diseconomies as farm size increases.

Suggested Citation

  • Peterson, Willis L., 1997. "Are Large Farms More Efficient?," Staff Papers 13411, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13411
    DOI: 10.22004/ag.econ.13411
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/13411/files/p97-02.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.13411?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kumbhakar, Subal C & Biswas, Basudeb & Bailey, DeeVon, 1989. "A Study of Economic Efficiency of Utah Dairy Farmers: A System Approach," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 595-604, November.
    2. Giancarlo Moschini, 1990. "Nonparametric and Semiparametric Estimation: An Analysis of Multiproduct Returns to Scale," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 589-596.
    3. Marvin T. Batte & Steven T. Sonka, 1985. "Before- and After-Tax Size Economies: An Example for Cash Grain Production in Illinois," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 600-608.
    4. Stephen C. Cooke & W. Burt Sundquist, 1989. "Cost Efficiency in U.S. Corn Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 1003-1010.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Glen Morris & Shawn Ehlers & John Shutske, 2023. "U.S. Small-Scale Livestock Operation Approach to Biosecurity," Agriculture, MDPI, vol. 13(11), pages 1-10, November.
    2. Erik Mathijs & Johan F. M. Swinnen, 2001. "Production Organization And Efficiency During Transition: An Empirical Analysis Of East German Agriculture," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 100-107, February.
    3. Fertő, Imre, 2002. "A mezőgazdasági termelés szerkezetének változásai a fejlett országokban, II. Az üzemnagyság és a mérethozadék problémája a mezőgazdaságban [Changes in the structure of agricultural production in th," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 760-773.
    4. Dries, Liesbeth & Swinnen, Johan F. M., 2002. "Institutional Reform and Labor Reallocation During Transition: Theory Evidence From Polish Agriculture," World Development, Elsevier, vol. 30(3), pages 457-474, March.
    5. Zegar, Józef S., 2012. "Gospodarstwa Rodzinne Wobec Wyzwań Wyżywienia I Ochrony Środowiska – Ujęcie Globalne," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 4(157).
    6. Mathijs, Erik & Swinnen, Johan F M, 1998. "The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 1-26, October.
    7. Saed Alizamir & Foad Iravani & Hamed Mamani, 2019. "An Analysis of Price vs. Revenue Protection: Government Subsidies in the Agriculture Industry," Management Science, INFORMS, vol. 65(1), pages 32-49, January.
    8. Morrison Paul, Catherine J. & Nehring, Richard F. & Banker, David E. & Breneman, Vincent E., 2001. "Productivity Growth, Technological Progress, and Technical Efficiency in the Heartland and Southern Cotton States:1996-1999," 2001 Annual meeting, August 5-8, Chicago, IL 20679, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Johan F. M. Swinnen & Liesbeth Dries & Karen Macours, 2005. "Transition and agricultural labor," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 15-34, January.
    10. Rogier van den Brink & Glen Thomas & Hans Binswanger & John Bruce & Frank Byamugisha, 2005. "Consensus, Confusion, and Controversy : Selected Land Reform Issues in Sub-Saharan Africa," World Bank Publications - Books, The World Bank Group, number 7387, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kislev, Yoav & Peterson, Willis L., 1991. "Economies Of Scale In Agriculture: A Reexamination Of The Evidence," Staff Papers 13652, University of Minnesota, Department of Applied Economics.
    2. Kivanda, Lena & Fox, Glenn, 1993. "Falsification and the Practice of Agricultural Production Economists: A Methodological Assessment," Department of Agricultural Economics and Business 258724, University of Guelph.
    3. Miller, James C. & Coble, Keith H. & Vergara, Oscar, 2003. "Farm Program Payments And Economies Of Scale," 2003 Annual meeting, July 27-30, Montreal, Canada 22231, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Evenson, Robert E. & Huffman, Wallace E., 1997. "Long-Run Structural and Productivity Change in U.S. Agriculture: Effects of Prices and Policies," Center Discussion Papers 28518, Yale University, Economic Growth Center.
    5. Robert E. Evenson & Wallace B. Huffman, 1997. "Long-Run Structural and Productivity Change in U.S. Agriculture: Effects of Prices and Policies," Working Papers 773, Economic Growth Center, Yale University.
    6. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 1-27, December.
    7. Huffman, Wallace E. & Evenson, Robert E., 2000. "Structural and productivity change in US agriculture, 1950-1982," Agricultural Economics, Blackwell, vol. 24(2), pages 127-147, January.
    8. Rosemarie Bégin & Lota D. Tamini & Maurice Doyon, 2014. "L'effet du travail hors-ferme sur l'efficacité technique des fermes laitières québécoises: un modèle intégrant les biais de sélection sur les observables et inobservables," Cahiers de recherche CREATE 2014-9, CREATE.
    9. Markus Lampe & Paul Sharp, 2015. "Just add milk: a productivity analysis of the revolutionary changes in nineteenth-century Danish dairying," Economic History Review, Economic History Society, vol. 68(4), pages 1132-1153, November.
    10. Muhammad Rizwan & Ping Qing & Abdul Saboor & Muhammad Amjed Iqbal & Adnan Nazir, 2020. "Production Risk and Competency among Categorized Rice Peasants: Cross-Sectional Evidence from an Emerging Country," Sustainability, MDPI, vol. 12(9), pages 1-15, May.
    11. Igbekele Ajibefun & Abdullahi Abdulkadri, 1999. "An investigation of technical inefficiency of production of farmers under the National Directorate of Employment in Ondo State, Nigeria," Applied Economics Letters, Taylor & Francis Journals, vol. 6(2), pages 111-114.
    12. Fernandez-Cornejo, Jorge & Mishra, Ashok K. & Nehring, Richard F. & Hendricks, Chad & Southern, Malaya & Gregory, Alexandra, 2007. "Off-Farm Income, Technology Adoption, And Farm Economic Performance," Economic Research Report 7234, United States Department of Agriculture, Economic Research Service.
    13. Holt, Matthew T. & Moschini, GianCarlo, 1992. "Alternative Measures Of Risk In Commodity Supply Models: An Analysis Of Sow Farrowing Decisions In The United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(1), pages 1-12, July.
    14. Rahman, Sanzidur, 2003. "Profit efficiency among Bangladeshi rice farmers," Food Policy, Elsevier, vol. 28(5-6), pages 487-503.
    15. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Economic Efficiency in Organic Farming: Evidence from Cotton Farms in Viotia, Greece," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(1), pages 35-48, April.
    16. Zaibet, L. & Dharmapala, P. S., 1999. "Efficiency of government-supported horticulture: the case of Oman," Agricultural Systems, Elsevier, vol. 62(3), pages 159-168, December.
    17. Nehring, Richard F. & Christensen, Lee A. & O'Donoghue, Erik J. & Sandretto, Carmen L., 2003. "Manure and Commercial Fertilizer Nutrients Relative to Cropland and Pasture Requirements: Is the Pollution Risk Growing on Corn/Livestock Farms?," 2003 Annual meeting, July 27-30, Montreal, Canada 21980, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Musemwa, L. & Mushunje, Abbyssinia & Muchenje, V. & Aghdasi, F. & Zhou, L., 2013. "Factors affecting efficiency of field crop production among resettled farmers in Zimbabwe," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161443, African Association of Agricultural Economists (AAAE).
    19. Tozer, Peter R & Siddique, Muhammad Imran, 2016. "Ownership, region, system or ? – What leads to efficiency?," 2016 Conference, August 25-26, Nelson, New Zealand 260808, New Zealand Agricultural and Resource Economics Society.
    20. Karin Larsén, 2010. "Effects of machinery‐sharing arrangements on farm efficiency: evidence from Sweden," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 497-506, September.

    More about this item

    Keywords

    Farm Management; Productivity Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:umaesp:13411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daumnus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.