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Farm Size Distribution, Weather Shocks, and Agricultural Productivity

Author

Listed:
  • Julián Arteaga
  • Nicolás de Roux
  • Margarita Gáfaro
  • Ana María Ibáñez
  • Heitor S. Pellegrina

Abstract

This paper studies the dynamics of farm size distribution, how they are in uenced by weather shocks, and the implications for aggregate productivity. Using data from several developing countries, we first document new empirical facts about households' landholding choices and how weather shocks in uence these decisions. Building on a rich longitudinal dataset for Colombia on farm sizes, land transactions, and households' consumption and investment decisions, we then show that weather shocks increase the frequency of land sales and reduce farm sizes within municipalities, especially among smaller farms. To rationalize these facts, we develop a dynamic, heterogeneous household model in which uninsured farmers make landholding and occupational choices. Our calibrated model shows that uninsured risk substantially curbs aggregate agricultural productivity, and that the effdects of temporary weather shocks on farm size and agricultural output are highly persistent, taking more than a decade to fade out. **** RESUMEN: Este documento estudia la dinámica de la distribución del tamaño de las fincas, cómo los choques climáticos las afectan y las implicaciones para la productividad agregada. Utilizando datos de varios países en desarrollo, primero documentamos nuevos hechos empíricos sobre las decisiones de tenencia de tierras de los hogares y cómo los choques climáticos in uyen en estas decisiones. Basándonos en un rico conjunto de datos longitudinales de Colombia sobre tamaños de fincas, transacciones de tierras y decisiones de consumo e inversión de los hogares, mostramos que los choques climáticos aumentan la frecuencia de las ventas de tierras y reducen el tama~no de lasfincas dentro de los municipios, especialmente en el caso de las fincas más pequeñas. Para explicar estos hechos, desarrollamos un modelo dinámico de hogares heterogéneos en el que los agricultores no asegurados toman decisiones sobre tenencia de tierras y ocupación. Nuestro modelo calibrado muestra que el riesgo no asegurado reduce sustancialmente la productividad agrícola agregada y que los efectos de los choques climáticos temporales sobre el tamaño de las fincas y la producción agrícola son altamente persistentes, tardando más de una década en desaparecer.

Suggested Citation

  • Julián Arteaga & Nicolás de Roux & Margarita Gáfaro & Ana María Ibáñez & Heitor S. Pellegrina, 2025. "Farm Size Distribution, Weather Shocks, and Agricultural Productivity," Borradores de Economia 1305, Banco de la Republica de Colombia.
  • Handle: RePEc:bdr:borrec:1305
    DOI: 10.32468/be.1305
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    More about this item

    Keywords

    farm size distribution; weather shocks; agricultural productivity; hetero-geneous agent model; tamaño de las fincas; choques climáticos; productividad agrícola; modelo de agentes heterogeneos.;
    All these keywords.

    JEL classification:

    • 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
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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