IDEAS home Printed from https://ideas.repec.org/p/ags/umaesp/13652.html
   My bibliography  Save this paper

Economies Of Scale In Agriculture: A Reexamination Of The Evidence

Author

Listed:
  • Kislev, Yoav
  • Peterson, Willis L.

Abstract

It is generally accepted that agricultural production is characterized by increasing returns to scale. In this paper we examine the evidence allegedly supporting this assertation and come to the conclusion that the hypothesis of increasing returns is not warranted. The essence of our argument is that if increasing returns were important we would have seen huge "food factories" dominating the industry. Instead, the dominating form of organization is the family unit and farms come in a multitude of sizes--as can be expected in a constant cost industry.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:umaesp:13652
    DOI: 10.22004/ag.econ.13652
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/13652/files/p91-43.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.13652?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. 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.
    2. 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.
    3. Ruttan, Vernon W., 1988. "Scale, Size, Technology And Structure: A Personal Perspective," Staff Papers 13832, University of Minnesota, Department of Applied Economics.
    4. Yoav Kislev & Willis Peterson, 1981. "Induced Innovations and Farm Mechanization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 562-565.
    5. Robert H. Hornbaker & Bruce L. Dixon & Steven T. Sonka, 1989. "Estimating Production Activity Costs for Multioutput Firms with a Random Coefficient Regression Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 167-177.
    6. Jurg Bieri & Alain De Janvry & Schmitz Andrew, 1972. "Agricultural Technology and the Distribution of Welfare Gains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(5), pages 801-808.
    7. Peterson, Willis & Kislev, Yoav, 1986. "The Cotton Harvester in Retrospect: Labor Displacement or Replacement?," The Journal of Economic History, Cambridge University Press, vol. 46(1), pages 199-216, March.
    8. 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.
    9. T. R. Saving, 1961. "Estimation of Optimum Size of Plant by the Survivor Technique," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 569-607.
    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. 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.
    2. Van Zyl, Johan & Miller, Bill R. & Parker, Andrew, 1996. "Agrarian structure in Poland : the myth of large-farm superiority," Policy Research Working Paper Series 1596, The World Bank.
    3. Sara Savastano & Pasquale Lucio Scandizzo, 2009. "Optimal farm size in an uncertain land market: the case of Kyrgyz Republic," Agricultural Economics, International Association of Agricultural Economists, vol. 40(s1), pages 745-758, November.
    4. Johnson, Nancy L. & Ruttan, Vernon W., 1994. "Why are farms so small?," World Development, Elsevier, vol. 22(5), pages 691-706, May.
    5. Marcos Gallacher, 2010. "The changing structure of production: Argentine agriculture 1988-2002," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 3-28, January-D.
    6. 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.
    7. Soukkhamthat, Thanongsai & Wong, Grace Y., 2016. "Technical Efficiency Analysis of Small-Scale Cassava Farming in Lao PDR," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 13(1), June.
    8. 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.
    9. Kirsten, Johann F. & van Zyl, Johan, 1998. "Defining Small-Scale Farmers In The South African Context," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 37(4), pages 1-12, December.
    10. Peterson, Willis L., 1991. "Relation Between Crop Yields And Estimated Returns To Scale And Returns To Research," Staff Papers 13430, University of Minnesota, Department of Applied Economics.
    11. 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.
    12. van Zyl, Johan, 1995. "The Farm Size-Efficiency Relationship In South African Commercial Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 34(4), December.
    13. Chiarella, Cristina & Meyfroidt, Patrick & Abeygunawardane, Dilini & Conforti, Piero, 2023. "Balancing the trade-offs between land productivity, labor productivity and labor intensity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(10), pages 1618-1634.

    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. Peterson, Willis L., 1997. "Are Large Farms More Efficient?," Staff Papers 13411, University of Minnesota, Department of Applied Economics.
    2. Unknown, 1998. "Commodity Costs and Returns Estimation Handbook (entire book-condensed file)," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    3. Unknown, 1998. "References/Literature Cited," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    4. Thirtle, Colin, 1988. "Induced Innovation Theory and Agricultural Development in LDCs: An Appraisal," Manchester Working Papers in Agricultural Economics 232807, University of Manchester, School of Economics, Agricultural Economics Department.
    5. MacDonald, James M., 2011. "Why Are Farms Getting Larger? The Case Of The U.S," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115361, German Association of Agricultural Economists (GEWISOLA).
    6. 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).
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Letort, Elodie & Carpentier, Alain, 2009. "Endogeneity of acreage choices in input allocation equations: implied problems and a solution," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49217, Agricultural and Applied Economics Association.
    14. 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.
    15. Alain Carpentier & Elodie Letort, 2009. "Modeling acreage decisions within the multinomial Logit framework," Working Papers SMART 09-17, INRAE UMR SMART.
    16. Araji, A.A. & White, Fred C., 1991. "The Economic Impact Of Technological Change On U.S. Agriculture," A.E. Research Series 140530, University of Idaho, Department of Agricultural Economics and Rural Sociology.
    17. 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.
    18. 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.
    19. Pardey, Philip G. & Alston, Julian M. & Ruttan, Vernon W., 2010. "The Economics of Innovation and Technical Change in Agriculture," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 939-984, Elsevier.
    20. 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.

    More about this item

    Keywords

    Industrial Organization;

    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:13652. 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.