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Farm size

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posted on 2023-06-08, 06:58 authored by Robert Eastwood, Michael Lipton, Andrew Newell
What patterns can be discerned in the distribution of farm sizes across countries and over time? How does the behavior of individual economic agents interact with the natural environment and general economic development to affect farm size? How has concerted human intervention, understood as national and supranational policy actions, altered these outcomes? We find that operated farm size rises with economic development, especially in the 20th century, with marked exceptions: large farms in Latin America and Southern Africa; small farms in parts of Northwest Europe; diminishing farm size in South Asia. Despite increased scale, in many advanced countries the family remains the main source of farm labor. Hired labor supervision costs tend to favor family farming as the equilibrium institution. Theory suggests that the family farm will typically become larger with economic development, but its efficiency advantage over the agroindustrial enterprise will decline. Sufficiently land-augmenting technical advances can upset the relationship between development and equilibrium scale, as in the Green Revolution. Concerted intervention can also cause departures from such equilibria. Colonial land grabs have led to inefficiently large farms, with market forces and land reform subsequently reducing average size after decolonization. Greater land rights have thereby raised the rural poor's income, status, and power, but farmland collectivizations, and much farm tenancy reform, have largely failed to achieve this goal. However, classic land reforms, and some decollectivizations, have proved more incentive-compatible and have distributed large land areas among many small family-managed units. Farm size is, in principle, also affected by net taxes on farm production (mostly negative in OECD, mostly positive in developing countries, though reduced), but such effects remain empirically elusive. Globalization and liberalization-effects via relative prices aside-have induced institutional changes that are not neutral with respect to farm size. These include supermarkets' increased role in the supply chain. JEL classifications: O130, Q130, Q150.

History

Publication status

  • Published

File Version

  • Other

Publisher

Elsevier North-Holland

Issue

18

Volume

4

Page range

3323-3397

Pages

1000.0

Book title

Handbook of Agricultural Economics: Agricultural Development: Farm Policies and Regional Development

Place of publication

Oxford; Amsterdam

ISBN

978-0-444-51874-3

Series

Handbooks in Economics

Department affiliated with

  • Economics Publications

Notes

Chapter 65

Full text available

  • No

Peer reviewed?

  • Yes

Editors

Prabhu L Pingali, Robert E Evenson

Legacy Posted Date

2012-02-06

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