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Too small to be beautiful? : the farm size and productivity relationship in Bangladesh

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  • Gautam,Madhur
  • Ahmed,Mansur

Abstract

This paper examines the agricultural productivity?farm size relationship in the context of Bangladesh. Features of Bangladesh's agriculture help overcome several limitations in testing the inverse farm size?productivity relationship in other developing country settings. A stochastic production frontier model is applied using data from three rounds of a household panel survey to estimate simultaneously the production frontier and the technical inefficiency functions. The ?correlated random effects? approach is used to control for unobserved heterogeneous household effects. Methodologically, the results suggest that the stochastic production frontier models that ignore the inefficiency function are likely mis-specified, and may result in misleading conclusions on the farm size?productivity relationship. Empirically, the findings confirm that the farm size and productivity relationship is negative, but with the inverse relationship diminishing over time. Total factor productivity growth, driven by technical change, is found to have been robust across the sample. Across farm size groups, the relatively larger farmers experienced faster technical change, which helped them to catch up and narrow the productivity gap with the smaller farmers.

Suggested Citation

  • Gautam,Madhur & Ahmed,Mansur, 2018. "Too small to be beautiful? : the farm size and productivity relationship in Bangladesh," Policy Research Working Paper Series 8387, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8387
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    Cited by:

    1. Uwacu Alban Singirankabo & Maurits Willem Ertsen, 2020. "Relations between Land Tenure Security and Agricultural Productivity: Exploring the Effect of Land Registration," Land, MDPI, vol. 9(5), pages 1-18, May.
    2. Zahoor Ahmad Shah & Mushtaq Ahmad Dar & Eajaz Ahmad Dar & Chukwujekwu A. Obianefo & Arif Hussain Bhat & Mohammed Tauseef Ali & Mohamed El-Sharnouby & Mustafa Shukry & Hosny Kesba & Samy Sayed, 2022. "Sustainable Fruit Growing: An Analysis of Differences in Apple Productivity in the Indian State of Jammu and Kashmir," Sustainability, MDPI, vol. 14(21), pages 1-24, November.
    3. Yao, Ling & Chen, Qihui & Wu, Laping, 2018. "Heterogeneous supply response: Does high price expectation attenuate the inverse farm size-productivity relationship in China?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274363, Agricultural and Applied Economics Association.
    4. Thanh‐Tung Nguyen & Trung Thanh Nguyen & Ulrike Grote, 2023. "Internet use and agricultural productivity in rural Vietnam," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1309-1326, August.
    5. Narayan, Seema & Bhattacharya, Poulomi, 2019. "Relative export competitiveness of agricultural commodities and its determinants: Some evidence from India," World Development, Elsevier, vol. 117(C), pages 29-47.
    6. Ifft, Jennifer E. & Yang, Youwei, 2020. "Horses vs. Tractors? Old Order Amish Population Growth and New York Farmland Markets," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304565, Agricultural and Applied Economics Association.
    7. Nguyen, Thanh-Tung & Nguyen, Trung Thanh & Grote, Ulrike, 2023. "Credit, shocks and production efficiency of rice farmers in Vietnam," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 780-791.
    8. Rada, Nicholas E. & Fuglie, Keith O., 2019. "New perspectives on farm size and productivity," Food Policy, Elsevier, vol. 84(C), pages 147-152.
    9. Spencer Stubbs & Jonathan Colton, 2022. "The Design of a Mechanized Onion Transplanter for Bangladesh with Functional Testing," Agriculture, MDPI, vol. 12(11), pages 1-16, October.
    10. Shukun Wang & Dengwang Li & Tingting Li & Changquan Liu, 2021. "Land Use Transitions and Farm Performance in China: A Perspective of Land Fragmentation," Land, MDPI, vol. 10(8), pages 1-22, July.
    11. Thanh-Tung Nguyen & Trung Thanh Nguyen & Ulrike Grote, 2020. "Weather shocks, credit and production efficiency of rice farmers in Vietnam," TVSEP Working Papers wp-017, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    12. Qiangqiang Zhang & Beibei Yan & Xuexi Huo, 2018. "What Are the Effects of Participation in Production Outsourcing? Evidence from Chinese Apple Farmers," Sustainability, MDPI, vol. 10(12), pages 1-15, November.

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