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Farm size and productivity : a"direct-inverse-direct"relationship

Author

Listed:
  • Savastano,Sara
  • Scandizzo,Pasquale L.
  • Savastano,Sara
  • Scandizzo,Pasquale L.

Abstract

This paper proposes a new interpretation of the farm size-productivity relationship. Using two rounds of the Ethiopian Rural Household Survey, and drawing on earlier work on five countries in Sub-Saharan Africa, the paper shows that the relationship between farm size and productivity is neither monotonic nor univocal. Most previous studies that tested the inverse farm size-productivity relationship used ordinary least squares estimation, therefore reporting parameter estimates at the conditional mean of productivity. By expanding these important findings to consider the entire distribution of agricultural productivity, the analysis finds sign switches across the distribution, pointing to a ?direct-inverse-direct? relationship. Less productive farmers exhibit an inverted U-shape relationship between land productivity and farm size, while more productive farmers show a U-shape relationship that reverses the relationship. In both cases, the relationship points toward a threshold value of farm size; however, the threshold is a minimum for the less productive farmers and a maximum for the more productive ones. To the left of the threshold, for very small farmers, the relationship between productivity and farm size is positive; for the range of middle farm size, the relationship is negative; and to the right of the threshold, the relationship is direct (positive) again. From a policy perspective, these findings imply that efficiency-enhancing and redistributive land reform should consider farm size in the proper context of the present and potential levels of agricultural productivity. The results and their policy implications underline the relevance of the most recent efforts of the international development community to collect more reliable georeferenced data on farm size and agricultural productivity.

Suggested Citation

  • Savastano,Sara & Scandizzo,Pasquale L. & Savastano,Sara & Scandizzo,Pasquale L., 2017. "Farm size and productivity : a"direct-inverse-direct"relationship," Policy Research Working Paper Series 8127, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8127
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    Citations

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    Cited by:

    1. Gourlay, Sydney & Kilic, Talip & Lobell, David B., 2019. "A new spin on an old debate: Errors in farmer-reported production and their implications for inverse scale - Productivity relationship in Uganda," Journal of Development Economics, Elsevier, vol. 141(C).
    2. Osuji E. E. & Munonye J. O. & Olaolu M. O. & Onyemauwa C. S. & Tim-Ashama A. C. & Ibekwe C. C. & Obasi I. O. & Obike K. C. & Ebe F. E. & Onu S. E. & Obi J. N. & Izuogu C. U. & Orji J. E. & Inyang P., 2022. "Econometric Analysis of Fluted Pumpkin Production in Nigeria; Empirical In-Depth Analysis," Journal of Agriculture and Crops, Academic Research Publishing Group, vol. 8(2), pages 105-114, 04-2022.
    3. Robertson R.B. Khataza & Atakelty Hailu & Graeme J. Doole & Marit E. Kragt & Arega D. Alene, 2019. "Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 237-246, March.

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